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LETTERS TO THE EDITOR
 

 

Emperor’s Christmas Gifts

Dear Editors,

Girma Feyisa’s articles from Brussells, Belgium, about Chrismas reminded me of the bygone days when the late Emperor Haileselassie used to distribute among us the “Ghenna Present,” These gift consisted of a woolen sweater, buscuit with a boiled egg inside, and an orange.

The number of students were limited in those days and the palace grounds (now housing Addis Abeba Univeressity) could easily absorb the entire number of students in the City of Addis Abeba. Far from appearing a despot, the Emperor behaved in a fatherly manner (at least for the occasion), invariably displaying his profound smiles. He used to wear snowwhite attire for the occasion.

 

Saeed Ahmed Siraj
Al Kharj
Saudi Arabia

 

 

Failing to Defend Ethiopian

Dear Editors,

I would like to bring to your attention the disturbing news coming out of Lebanon regarding the crash of ET409. I am sure you are well aware of the seemingly deliberate misinformation that is being spread by the Lebanese media and officials, trying to tarnish the good name of our national carrier.

The Ethiopian Airlines, to its credit, has been trying to fight back against this gobbledygook. But as an established Ethiopian news outlet, which has access to the international community, do you not think your newspaper has a national responsibility to defend Ethiopian and fire back?

I tried to search your website, but I could not find anything close to this. Please do consider getting involved by clearing up the misleading information that is out there. The brand of our national carrier is at stake!

Sincerely,
Alemayehu

 

 

New VAT Directive Bad for Business

 

Dear Editors,

I would like to comment on the recent directive on value-added tax (VAT) where government organisations are authorised to deduct the VAT from their payments to their suppliers and pay to the tax authorities.

Clearly, this new directive will not affect the calculations of VAT to be paid back to the government. But it has seriously damaging consequences on businesses. The businessman supplying the public sector will always be left with huge VAT receivables on their balance sheets (or carry forward on the VAT form), and dwindling cash.

Assume a hypothetical businessman who supplies only to the government. Let us say his VAT payable for March is 200,000 Br, and his VAT receivable is 100,000 Br. Previously, he would have reported a balance of 100,000 Br, paid that balance, and everything would zero out. But with the new directive, the whole 200,000 Br would be paid in advance through his customer; the businessman would be left with a carry forward of 100,000 Br and that much less cash in his account.

This will continue for future transactions.

This also has adverse consequences for the government. Since the Revenue and Customs Authority almost never pays back the balance, the businessman will begin to consider the 15pc VAT as a cost and add it to his selling price. It will be more stress on the government’s budget, and may be inflationary, too.

A reporting mechanism through a computer network (an Intranet dedicated for this task would do the job) between the Revenue Authority and the buyers would be better. When the directive goes through, unless a mechanism is set to refund the “carry forward” quickly, businesses will definitely increase their selling prices. And, unfortunately, most of the businessmen who supply the government are honest VAT payers.

MDM

 

 

I Can’t Believe I’m Writing This

Dear Editors,
 

I once heard about an incident that had driven Oprah Winfrey mad when she came to visit Addis Abeba. The alleged story had it that she was infuriated by customs officers at the airport, who apparently did not recognize who she was, for they ignored her while giving priority to other arrivals who happened to be whites; little did they know that they were her security personnel.

 

Read More

 

 

Bole Customs Frustrates Customers

Dear Editors,

I arrived at Bole International Airport on an international flight early on the morning of September 4, 2009. I had to seek Customs clearance for an exercise equipment which I had brought with me.

The clerk on duty in the ‘assessment’ booth did not seem to know how to locate the described items on the computer. This process took a long time. Altogether the process took almost 90 minutes due to the inefficiency of the Customs officers there.

Read More

 

 

Unshakeable Habit of PM's under Unoriginal Assault


 

Dear Editors,
 

I am writing after reading Lulit Amdemariam's column headlined, "Professor, PM" [Fortune, Volume 10, Number 503, December 20, 2009].
 

I respect and encourage the right of every Ethiopian to freedom of expression and thought. And it is heartening to see her and other members of the private press speaking out under often difficult circumstances. However, when it comes to the mainstream media, I believe there needs to be a minimum level of professionalism and ethics demanded - out of respect for the public and the subject involved.
 

 

Read More

 

 

Indians are Not Stranger to Ethiopia


Dear Editors,
 

We would like to draw your kind attention towards the news story published in your newspaper headlined, “Stranger Comes to Town” [Volume 10 Number 486, August 23, 2009], and further a letter from a reader headlined, “India, International Standards Differ” [Volume 10, Number 487, August 30, 2009].

The Embassy of India would like to express its disagreement regarding both the printed items, as they have incorporated wrong facts, baseless allegations, and a biased story. 

 

Read More

 
 

 

Is Fortune's Case Really Historic?

Dear Editors,
 

Your news story headlined, "Fortune Wins Landmark Case against Ayat" [Volume 10, No. 476, June 14, 2009] gives extensive coverage to the court battle your publisher has fought against Ayat Share Company.

Read More

 

 

Pankhurst Family Distances Itself from Memorial Institute

 

Dear Editors,

 

My attention has been drawn to an advertisement by the Sylvia Pankhurst Education and Training Institute entitled Sylvia Pankhurst Memorial Institute, on page 11 of your issue of June 7, 2009 [Volume 10 Number 475].
 

Though I have given my approval to naming a school after my mother, I have not been asked, and have not agreed to the use of my mother's name for the said Sylvia Pankhurst Education and Training Institute. Neither I, nor members of my family, hold any position or have any affiliation with the Institute share company.

 

Thank you

Richard Pankhurst (Professor)

 

 

A Case for Telecom Privatization

Dear Editors,
 

I read the news headlined, “Amharic Office Word Application Software Almost Complete” [Volume 10, Number 473, May 24, 2009]. It was great to know that the age old language of Ethiopia is entering the information age. My appreciation to the three organizations: Microsoft Inc., the Ethiopian Information Communications Technology Development Agency (EICTDA) and the Addis Abeba University (AAU).
 

However, all this effort is of no use as long as a single monopoly operator owns the generation and transmission of information and networks without the involvement of the private sector. As a result of such a policy, Ethiopia, with telecommunications services for over a century, is now known as a prime example of least developed countries (LDCs) in the information communications technology sector.
 

The private sector is excluded from owning a network, and small and medium enterprises, which could provide local language based content services, are absent from the scene. Perhaps Microsoft Inc. and the other influential organizations should clearly take a stand against the disabling policy on telecom and ICT monopoly in Ethiopia.

 

Only then can we talk and expect innovative and sustainable development through ICT.   

 

Asteway  Abebe
Nairobia

 

 

Is AU's Priority Cash or Development?

Dear Editors,

When I was covering the 4th African Health Ministers Conference for my government earlier this month, I was delighted to meet African officials in large numbers for the first time. I felt blessed for being assigned to Addis Abeba, as my first African posting. In naivety, I used to think Africa was as homogenous as are most European countries. I was fortunate to learn that the diversity is immense, and incredible.

Read More

 

 

Ethiopian Journalists Must Support Each Other

Dear Editor
 

I read the commentary by Lulit Amdemariam headlined, “Ethiopian Journalism” [Volume10, Number 473, May 24, 2009]. It was a timely and fascinating piece.

Most media houses usually ignore such indispensable issues. Journalists in our country are seen complaining about their profession only when they are imprisoned, charges are pressed or when a new media law is imposed on them.

 

Read More

 
 

 

Textile Labour Union Needs Reality Check

Dear Editor
 

I was amazed to read a story headlined, "Local Textile Labour Case May Go International" [Volume 10, Number 470, May 3, 2009]. This story says a local employer and union's case may go international because the case was not getting resolved here in Ethiopia.
 

I cannot believe the union chose this particular time to take it that far. Its leaders are thinking about getting in touch with the employer's clients through the International Conference of Free Trade Unions (ICFTU) in order to urge them not to buy the product from the local factory.
 

What are they thinking? Where have they come from? Do they live in the same world we live in? Do they follow the news on what is going on around the world, that countries are doing all they could to make it through this turbulent times? Have they heard stories of employees losing their jobs, in millions, and companies getting bankrupt? Do they know that employers and employees are working together to avoid bankruptcy of their companies so employees have job security (even on a concession basis) during these trying times?
 

Besides, when they say they will contact the exporter's clients and ask them not to buy the product, have they not heard about the foreign exchange crunch this country is facing?
 

Maybe they were not aware that the products exported by individual companies do bring back the hard currency we all (as a country) depend on. I suggest they should get a reality check; they should also be thankful that their members do have jobs during these tough times while millions are desperately looking for one.
 

Their timing is so bad that instead of taking their case to international level, they should rather focus on increasing productivity. Our work attitude should change too. Working together with management, we should find a way we could be more a productive workforce.
 

Our industrial production output is too low, even when compared to other Third World countries.

We should keep in mind that our industries, all imported machineries purchased with foreign exchange, are established after consuming huge investment capital. If the exported products were not competitive enough, those industries could get bankrupt and close their doors with loss of jobs as avoidable consequences. It is in all our interest to see the success of these companies.

We should also be careful not to send the wrong signal to prospective investors, both domestic and foreign.

Ayenew Awole

 

Strengthening Credit Information Exchange among Banks

Dear Editor
 

Banks in most circumstances require sufficient collateral to ensure repayment in case of failure on part of the borrowers to repay a loan. This is despite the views of some who regard collateral as a minor matter; they take the view that having a good borrower with a good business is a far more important basis for lending than collateral.
 

For banks in a country like Ethiopia, the importance of collateral is beyond doubt as it ensures the repayment of the loan in case of default by the client. If an information asymmetry problem exists, where banks do not have information about their borrowers as much as the borrowers know about the banks, it is natural that banks will continue to take the collateral issue though the magnitude may differ from one bank to another. 
 

One of the main problems with collateral is establishing clear title. Banks might go to seize collateral only to find that the borrower had already pledged it to other banks, or in our case, as your newspaper reported last week headlined "Amendment Proposes Leeway in Mortgages Collateral" [Volume 10, Number 471, May 10, 2009], without fulfilling the article on the 1960 Civil Code that the mortgage collateral should be signed before courts or notary.
 

The government's move to amend the article related to mortgage collateral is a great relief to the banks, which otherwise may fall in serious jeopardy and which will ultimately have consequences on the financial sector. However, there are other issues beyond mortgage collateral: The issue of strengthening credit information exchange among banks in Ethiopia, as this ultimately narrows the huge information gap banks have on their borrowers or that narrows the information asymmetry problem in the country.
 

Information is basic to banks for making decisions they would not come to regret. In fact, it is one of the competitive tools where a bank that manages to collect adequate and timely information about its clients can make better credit decisions - hence reducing the risk of default - than others that fail to do the same or that focuses very much on collateral. Proper evaluation of credit requests, hence, requires pre and post information about the borrower in addition to other requirements, including the pledging of collateral, assessment of the applicant's business and financial reports.
 

Hence, credit information exchange among banks prior to the provision of the loan is a task that the banks should give utmost attention. 
 

Though collateral and mortgage of collateral continue to be taken seriously by banks in Ethiopia and the recent move by the government to amend the article in the 1960 Civil Code is appreciated, the focus should go beyond the issue of collateral to strengthening the information base banks have on their clients.

 

Abraham Tesfaye
Commercial Bank of Ethiopia (CBE)

 
 
 
 
   
   
   
 
 
 

 

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