OPINIONBy Hawi Abdisa & Samson Berhanes

Purchasing teff in the summer season has never been easy for Meskerem Beyene, a housewife and mother of four living around Lideta Church. Nevertheless, this summer was especially trying, as the price of white teff reached close to 3,000 Br a quintal.

“Within three decades of raising four children, I have never experienced such increase in the price of teff,” she said.

Meskerem used to buy a kilogram of white teff, a staple food in Ethiopia, also known as Eragrostis tef, for less than 20 Br half a year ago. Now the price has swelled close to 30 Br.

“Once it goes up, it never comes down like any other commodity,” she said, explaining her shopping experiences. “Although the current rise is unprecedented, the price of teff usually hits the roof in the summer season.”

The price has forced her and her husband to adjust their household budget although their income remains the same. And expecting more price increments in the months ahead, Meskerem bought more amounts of teff than usual, speculating the price will further swell in the coming months.

“I don’t know what will happen next,” said Meskerem, who bought two quintals of teff from a retail shop in Lideta for four months. “I, at least, have to be ready for further hikes.”

One of the odd features of the past two or three weekends was that teff was in short supply than usual. The past week has seen a hike in prices of many kinds of cereal, especially teff , owing to diminished supply, sending the cost of living upwards.

The price of teff is skyrocketing across the capital – by some estimates, as much as 1,000 Br since January – putting the city’s consumers under more challenges as the holiday season approaches.

Small-scale businesses are also feeling the pain.

Tadesse Kefyalew, early 30’s, is a wholesaler of teff in Merkato’ marketplace area. He supplied three types of teff including white, brown and mixed to various retailers and wholesalers, with a price ranging from 1,950 Br to 2,400 Br.

“It is not easy to get the teff as it was half a year ago,” he said.” Most of the farmers would have run out of teff by now.”

He used to get the teff from the Ada’a area, located around 55km from Addis Abeba, before shifting his attention to other suppliers from Arba Minch and Dejen.

“As I have been spending more on transportation, I have been making price adjustments since the beginning of this month,” he said. “The fact that the producers are highly unpredictable in setting prices during such a season makes the crop costly.”

The price increase of teff is the second time in a year since October 2016, when the unrest in Oromia and Amhara regional states was at its peak. Then, in no less than two weeks, the retail price shot to 2,500 Br from 1,750 Br although it stabilised later to around 2,200 Br after the declaration of the state of emergency.

Teff accounted for more than half of the cereals cultivated in Ethiopia, reaching 50.2 million quintals during last year’s Meher (Summer) season. The share of teff in crop production and coverage stood at 17pc and 24pc, respectively.

Aside from Merkato, the trend of a surge in the price of teff is also visible in other parts of the city.

Hayatu Bereka has been working at his uncle’s teff retail shop located around Kazanchis for the past two years. In his stay at the shop, he never saw such a hike in the price of teff.

“We are getting the teff from our suppliers for an amount as high as 2,700 Br, which is the highest I have seen it go so far,” explained Hayatu, who buys teff from Embur Town in Amhara Regional State, and also areas close to the capital, Dukem and Aleltu Wereda.

“The price has been steadily growing but it jumped by a thousand Birr last month.”

Hayatu’s neighbours also share his sentiment.

“For the longest time, it remained fixed,” says Ketema Tadesse, another retailer of teff and other crops for about 10 years.

“It is usual in summer as many vehicle owners refuse to go frequently to the muddy rural areas to bring teff, which leads to a shortage of supply,” said Ketema.

Besides retailers, the Addis Abeba City Government Cooperative Agency, whose objective among other things is to stabilise the market, has also been feeling the pressure of demand for teff increase in the past month.

The agency administers 10 Consumer Unions that are operating in each district of the city. The Agency helps the Unions supply crops, including corn, sorghum, wheat, teff and barley, from farmers and regional cooperative unions.

Owing to a surge in demand in the city, the amount of teff requested by the Unions has increased to 4,895ql in August from less than 3,000ql in July. The amount is 64 times higher than the requests made for wheat and barley.

“We are working to prevent at least further increases of prices even though there is shortage from the side of farmers,” said Tesfaye Bana, a marketing expert at the Union. “If the shortage is fixed, we can easily reverse the price hike.”

Founded seven years ago, Lideta Fana Cooperative Union, located in Lideta District, comprising eight different basic consumer associations, is among the unions that have requested more amount of teff in this summer season.

“We have warned our members that this would happen,” said the General Manager of the Lideta Fana, Getachew Tefera. “Five months ago, we asked all eight associations for cash contribution so that we could stock enough teff with a price of 1900 Br, but no one responded.

As he anticipated, the demand from these associations has also increased, and the farmers started selling as high as 2,400 Br.

“This could have been handled if we had stocked more amount of teff earlier,” he added.

Assefa Admassie (PhD), an agricultural economist with close to four decades of experience, believes that the government should rethink its policy towards the teff production.

“Even though controlling a cash crop like teff is a daunting task for the government, implementing a policy that advocates more incentives to teff producers will help solve the price hike,” he said. “Modifying the agronomic characteristics of the crop will also be helpful in raising productivity.”

The price hike is observed as the country is struggling to respond to the third-worst drought in half a century, which has left 8.5 million people in need of an urgent assistance.

This has contributed a lot to the increase in price of cereals in most parts of the country. In addition to the drastic surge in price of Maize, the price of teff has increased by an average of 18pc compared to the past month, according to the Central Statistical Agency (CSA).

Furthermore, an uptick of the cereal prices including teff pushed the headline inflation rate to 9.4pc last month, near the double-digit mark and against the target set by the second edition of Growth & Transformation Plan (GTP II).

Despite all these, Daniel Dintamo Head of Communications at Ministry of Agriculture & Natural Resources (MoANR) argues that such a hike is baseless rumour.

“There is no reason why the price would increase in a time where the effect of El Nino is very small,” he said.

Nevertheless, Abush Mola, the head of Melka Awash Farmers Union, in Sebeta, Oromia Regional State, who has witnessed the price of teff bumping up from 1,900 Br to 2,176 Br, begs to differ.

“The price hike is visible everywhere,” he said.

By Berhane Hailemariam

The State owned giant, Commercial Bank of Ethiopia (CBE), is set to launch agent banking, CBE Birr, next month. It has already gotten approval from the National Bank of Ethiopia (NBE) to pilot the system.

The move comes four years after the Bank started a feasibility study to provide the service. It enables users to process the transaction using mobile phones and reduces transportation costs and time for users.

“We will fully launch the service after securing a license from NBE,” said Belihu Takele, acting communications manager of CBE.

The main actors of the CBE Birr system are CBE as a service provider, individual customers, agents and Ethio Telecom, the only mobile network provider in the country.

The CBE Birr system, according to Belihu, will help customers get a 24-hour service.

Also, CBE Birr will reduce the conventional way of processing money. To begin the service, going to the bank is unnecessary; instead, customers can withdraw or deposit money in the nearby agent without getting a bank account.

Regulation of Mobile & Agent Banking Services directive was issued in 2012. Eight banks have launched the agent banking system so far.

Dashen Bank S.C pioneered the service in December 2014. Abay Bank, Cooperative Bank of Oromia (CBO), Lion International Bank, United Bank, Nib Int’l Bank, Wegagen Bank and Oromia International Bank (OIB) then followed.

“The market is not yet tapped. Still, there is a significant unbanked demography,” said Belihu.

The move by CBE, whose market share is around 40pc, to start agent banking is wise for Abdulmenan Mohammed, a financial and audit expert with 15 years of experience.

“CBE has the reputation and resources to penetrate the market,” he said. “It can leverage its reputation to get a considerable market share.”

Agents, according to NBE’s directive, could be businesses such as supermarkets, shops and fuel stations.

In screening the agents, CBE set criteria such as having an Ethiopian nationality, a valid and lawful business or commercial activity, at least one-year of business experience, possess renewed trade license and a Taxpayer Identification Number (TIN) as well as a valid and renewed identification card.

The bank has acquired the field tested technology and deploys all security requirement as per the requirement of the directive, according to Belihu.

CBE set the minimum limits to 10,000 Br, but the agent can manage the liquidity to the extent of the transaction performance and requirement of working capital at its premises.

Established, seven decades ago, CBE has mobilised deposits of 76.4 billion Br during the recently ended fiscal year, raising the aggregate deposits to 365 million Br from the 288.4 billion Br of the previous fiscal year. During the same period, CBE disbursed fresh loans of 94.5 billion Br and collected 64.6 billion Br of disbursed loans. It also grossed a profit of CBE 14.6 billion Br in profit in the past fiscal year.

As of now, CBE has more than 16 million account holders.

Zanu PF Youth secretary Kudzanai Chipanga has said youths in the ruling party are tired of being used by senior politicians and that it was time they (youths) demanded their space in all sectors of the economy.

He was speaking in Gweru on Tuesday at a meeting to prepare for Zanu PF Midlands presidential interface rally scheduled for September 2.

Chipanga said senior party officials had a tendency to give hand-outs such as beer to incite youths to engage in political violence particularly during election time.

“As youths we work over time in party activities yet there are some who still use us to do things that do not benefit us economically,” Chipanga said.

“Enough is enough we are saying this year no to being given beer as it does not empower us as youths.”

Chipanga said instead of buying beer for youths senior politicians should ensure that youths get farming inputs and mining claims among other empowerment initiatives.

Opposition parties have often accused Zanu PF of engaging in political violence against its supporters particularly during election time.

“If you use youths toy toying will their family benefit from that?” quizzed Chipanga.

Chipanga said politicians in the party who do not represent the interests of youths in their constituency should lose their seats to young members come 2018.

He said time was up when positions of certain politicians in the party were considered sacred and uncontested.

“If a representative does represent our interests let us stand up and represent ourselves as youths. We want to see youths even in parastatals boards,” he said.

Chipanga said all positions in the party except that of President Robert Mugabe could be contested if their holders did not perform to expectations.

Zimbabwean white commercial farmers, who were kicked out of their properties at the height of the southern African country’s chaotic land reforms, have launched a fresh bid for “justice and compensation” amid violent invasions of the few remaining white-owned farms.

The displaced farmers had since notified President Robert Mugabe’s government, through a South Africa based civil rights group, Afriforum, of their intention to approach the Southern African Development Community (SADC) with a view to be compensated by the Harare administration.

“On August 16 and 17, 2017 formal notice to initiate proceedings was served by the farmers’ legal team on President Robert Mugabe, three of his ministers and the Zimbabwean government collectively under the Southern African Community Development Community (SADC) Finance and Investment Protocol,” read a statement.

The three ministers were the Minister of State in the Office of the President, the Minister of Lands and Rural Resettlement, Douglas Mombeshora, and the Minister of Finance, Patrick Chinamasa.

“Our dispossessed Zimbabwean white farmers have been wronged,” said SADC Tribunal Rights Watch spokesperson Ben Freeth.

‘Culture of impunity’

“We have a final and binding judgment from the SADC Tribunal in 2008 which held that fair compensation should be paid by the Zimbabwe government for land it had taken and the government is in contempt of it,” added Freeth.

The farmers could not seek the enforcement of tribunal’s ruling after the regional bloc disbanded the tribunal following protests from the Zimbabwean government.

“Unless the culture of impunity stops, no investment will take place in our country and the economic crisis will deepen. Without property rights and the rule of law, our negative trajectory as a failed state will accelerate,” warned Freeth.

According to the Commercial Farmers Union of Zimbabwe, more than 4 000 white commercial farmers and their employees were displaced at the height of the land seizures embarked on by Mugabe’s Zanu-PF government in 2000. Some of the farmers lost their lives during the chaotic land seizures.

The latest bid came at a time when Mugabe had threatened all white farmers still remaining on their land that they would lose their properties to pave way for his supporters and ordinary Zimbabweans who had no access to land.

Maputo — A court in the northern Mozambican province of Niassa has ordered the deportation to Tanzania of 10 Tanzanian citizens found guilty of looting mineral resources inside the Niassa National Reserve.

The court sentenced the ten men, who had entered the country illegally, to prison terms of between a year and two months and six years under Mozambique’s conservation legislation. But, because of the overcrowding in Mozambican jails, the court decided to send them to serve their sentences in Tanzanian jails. In addition to the jail time, the ten were ordered to pay over a million meticais (about 16,400 US dollars, at current exchange rates) for the damage they caused to the environment.

The men were lucky that they were charged under the old conservation legislation, and not the amended law, passed by the Mozambican parliament in May, which increases the penalty for this type of environmental offence to prison terms of between 12 and 16 years.

According to a press release issued by the National Administration of Conservation Areas, the Niassa National Reserve is now working with the Frontier Guard and with the immigration services to ensure the deportation of the ten to Tanzania within the 20 day period stipulated by the court.

A Mozambican citizen named Abel Gabriel was tried alongside the Tanzanians for illegal mining and was also found guilty. Instead of a prison term, he was sentenced to “socially useful labour”, one of the alternatives to prison envisaged in Mozambique’s new Penal Code.

Africa’s richest man, Aliko Dangote, plans to invest $20 billion to $50 billion in the United States and Europe by 2025, in industries including renewable energy and petrochemicals.

The 60-year-old Nigerian cement tycoon aims to move into these territories for the first time in 2020 after completing almost $5 billion of agricultural projects and an $11 billion oil refinery in his home country, Nigeria, he said in an interview with Bloomberg Markets Magazine this month.

“Beginning in 2020, 60 per cent of our future investments will be outside Africa, so we can have a balance,” Dangote, who is worth $11.6 billion, according to Bloomberg’s Billionaires Index, said.

Dangote Group’s major investment will be in the US and Europe, he said. “I think renewables is the way to go forward, and the future. We are looking at petrochemicals but can also invest in other companies.”

Dangote has diversified rapidly in the last five years, both geographically and into new industries.

He has expanded Dangote Cement Plc, which accounts for almost 80 percent of his wealth, into nine African countries aside from Nigeria.

In 2015, he began building a 650,000 barrel-a-day refinery near Lagos, Nigeria’s main commercial hub, and he’s constructing gas pipelines to the city from Nigeria’s oil region with US private equity firms Carlyle Group LP and Blackstone Group LP.

He said in July he would invest $4.6 billion in the next three years in sugar, rice and dairy production.

Shares in Dangote Cement fell 4.9 per cent to N214 in Lagos last Wednesday, paring the advance this year to 23 per cent.

“When you look at it — not just in Nigeria but in the rest of Africa — the majority of countries here depend on imported food,” he said. “There is no way you can have a population of 320 million in West Africa and no self-sufficiency. So the first thing to do is food security. I believe Dangote Group is in the right position to drive this trajectory.”

Dangote, who mostly lives in Lagos and counts Bill Gates among his friends, said he was a passionate industrialist, and ruled out moving into newer sectors such as telecommunications or technology.

“When I look at telecoms for instance, I think that would be very tough for us.”

“Some players have been in this market for 17 years already. There’s no way you can go and jump over somebody after 17 years of their hard work. So I think we would pass when it comes to telecoms today. There are other businesses that we understand better,” he said.

Dangote also said he wasn’t planning to join Nigerian politics.

“I’m not interested,” he said, adding that “I enjoy a lot of what I am doing, and I also love my freedom — and I don’t have too much. The little I have, politics would take away. There are businessmen who are interested in politics. I’m not one of them.”

Cape Town’s Granger Bay, Hout Bay and Dido Bay may soon be home to three proposed new desalination plants that the city intends commissioning to make extra drinking water for its residents and visitors, according to tender documents issued this week.

Earlier on Thursday Cape Town Mayor Patricia De Lille announced that the city planned to produce an extra 500Ml of water through a mix of desalination plants, ground water extraction, and water reuse.

This is part of its acceptance that the city’s “new normal” is to be short of water because of droughts and climate change.

Already at Level 4b water restrictions that have reduced water usage from 1000Ml a day to 610Ml a day over the past year, even more needs to be done to make sure that taps don’t run dry, said De Lille. Further restrictions to Level 5 might have to be introduced in the future, but in the meantime, it has also issued its first tender for new desalination plants.

The proposed Granger Bay sea water extraction site is intended to be located in the Oceana Yacht Club’s harbour near the Green Point stadium, and should help produce 8Ml of potable water over the next two years.

It will be linked to intake pumps, a generator and a pipeline that will run along Beach Road past the golf course to the desalination plant. The proposed desalination plant, pump station and generators will be located within the public parking area in Beach Road west of the V&A Waterfront.The contract specificatons are vast, and include the procurement of sandbags to stabilise the intake pipes running overland.The proposed extraction plant for picturesque Hout Bay will be situated near the crayfish factory in the harbour. That desalination plant will produce 4Ml and it is proposed that it will be located within the harbour complex on the open gravel parking area south of the main entrance. A third proposed sea water extraction point will be from a beach in Dido Valley, False Bay, between Gleincairn and Simonstown. That pump station is intended to be installed on an off-shore float ±250m from the coast line, behind the wave line. The proposed 2 Ml/d containerized desalination plant, pump station and generators will be located within the naval grounds off Main Road, 2km north of Simon’s Town. A meeting for further information and clarity on the proposals will be held at the Milnerton Library in Pienaar road at 10:00 on Friday, and next week the city will take prospective contractors on site tours.

By Nuzulack Dausen

Dar es Salaam — It is official: mobile phones are now leading generators of excise tax, overtaking beer.

A National Bureau of Statistics (NBS) report shows that since 2004/05 beer was the largest contributor of revenue from excise but things changed in 2013/14 when mobile phones took the lead.

This came after the tremendous growth of mobile phone usage in the country that has been prompted by ever increasing demand in communication especially in voice, internet and mobile money services.

Tax Statistics Report 2015/16 shows that since in 2013/14 mobile phones have been accounting for more than 28 per cent of total domestic excise tax, leaving beer at an average of 25 per cent.

The report reveals that the revenue from the electronic gadgets has grown tremendously by more than 25 times from Sh9.7 billion in 2004/05 to Sh246.6 billion in 2015/16. Beer domestic excise duty has risen from Sh52.1 billion to Sh216.6 billion in 2015/16.

Analysts say this shows the contribution of mobile phones to the national economic growth can be higher if excise duty is reduced to increase communication.

“Tanzania has the highest excise rate in the East African Community. It’s 17 per cent while Rwanda’s is eight per cent and Kenya’s is 10-12 per cent,” said Auditax International expert Shabu Maurus.

He said telecom companies had been urging the government to reduce the rate to make communication inexpensive, to no avail. Mr Maurus suggests that it is important for the government and mobile phone companies to agree on win-win model for rural areas to enjoy reliable communication.

“Most studies done in the past including that of 2015 by GSMA — a trade body that represents the interests of mobile operators worldwide — shows that a reduction in excise tax rates will increase communication, which will in turn, boost the government revenues.”

However, the taxman says it is the growth in the use of communication services that made mobile phones raise their share of revenue from domestic excise taxes.

“People nowadays use mobile phones not only for voice call alone but for more uses such as mobile money services and social networks like WhatsApp,” said the Tanzania Revenue Authority (TRA) director of information and tax education, Mr Richard Kayombo. “That’s why mobile phones have contributed more than other products in the tax category.” He said excise tax rates in telecommunication sector “are the same across the region”.

In 2013/14 financial year the government introduced a 14.5 percent excise duty in all mobile phones instead of taxing airtime alone. Excise duty of Sh1,000 was slapped on each Sim card, but the public protested. The 2.5 per cent of the revenue from mobile phones excise duty was to fund the education sector.

The government then increased excise tax to wired and wireless telephones. Unlike in mobile phones, beer excise tax has been increasing almost every financial year, sometimes adjusted to fit with inflation.

For example, the excise duty for all beer, except that from locally unmalted cereals jumped from Sh382 per litre in 2010/11 to Sh765 per litre this financial year.

According to the report, total revenue from total domestic excise revenue in 2015/16 was Sh868.6 billion almost two times of what was collected in 2011/12.

The International Development Association (IDA), a wing of the World Bank, has allocated a 4.6 billion dollar loan to Ethiopia for 2018. The Association’s priority areas will be water supply, sanitation, education, trade, logistics and development of woman entrepreneurship.

Ethiopia has active IDA commitments of 7.8 billion dollars as of August 2017, with a record lending of 1.78 billion dollars two years ago and 900 million dollars last year. IDA’s envelope for Ethiopia is 3.8 billion dollars for the year 2017.

Established in 1960, IDA aims to support the world’s poorest countries by providing grants and zero-interest loans for projects and programmes that boost economic growth, reduce poverty, and improve people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, of which 39, including Ethiopia, are in Africa.