Addis Fortune gossip: Prime Minister Hailemariam Desalegn is known by…

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Prime Minister Hailemariam Desalegn is known by those frequenting the power corridor on Lorenzo Te’azaz Road for his favourite adage – a developmental state will always remain cash strapped – gossip disclosed. Indeed, he runs an administration besieged by a massive funding gap between what it needs to pay to accomplish its objectives by the end of 2015 and the amount of money the national treasury can access, gossip observed.

Nothing of this apparent deficit is more visible than in a dispute that erupted between heads of three federal agencies, gossip reveals.

Sufian Ahmed’s Ministry of Finance & Economic Development (MoFED) is responsible for managing the fiscal expenditure of the state. But it needs to do this in tandem with Teklewold Atnafu’s National Bank of Ethiopia (NBE), which is the custodian of federal government’s wealth. Among several sources of revenue that end up with their funds at the NBE, there are proceedings that come from the sale of state-owned properties to private investors, as well as money collected from lease fees from those who manage state-owned industries.

However, the man in charge of these funds, Beyene Gebremesqel, director general of the Privatisation & Public Enterprises Supervisory Agency (PPESA), was clever in persuading the administration to redirect these funds to the recapitalisation of companies under his watch, gossip says. The intent is to beef-up the asset base and books of these enterprises, hoping that they can then generate a lot more money for the public coffer.

This is a tried and tested approach in the case of the brewing and textile industries, gossip observed.

To Beyene’s disappointment, someone at the Central Bank was undercutting him, transferring funds from his agency’s account to the MoFED, without first getting his consent, gossip disclosed. Over the past few months, funds amounting to no less than 1.1 billion Br were taken out of the PPESA’s account with the NBE and handed out to Sufian’s Ministry, which is under enormous pressure from every direction to release funds to finance public infrastructure projects, gossip disclosed.

One of these major projects that will forever remain a signature for the rules of the Revolutionary Democrats is the national railway. When they are completed, hopefully in two to three years, close to 5,000km of rail network is planned to crisscross the entire country. If there is any hurdle to this national ambition by the Revolutionary Democrats, it can only be limitations in funding, claims gossip.

Even the generous Chinese government’s appetite to find viable projects overseas to sterilise its abundant foreign exchange reserve has become wary of the stock of Ethiopian foreign debt, according to gossip. Unsurprisingly, the official version seems to want to maintain that the stock of foreign debt is 13 billion dollars. However, those at the gossip corridors inflate this figure by as much as seven billion dollars and call for caution.

Despite the dispute over the size of the national debt stock, the administration has the drive to get financing from wherever it is available. Although financiers in the western hemisphere tend to scrutinise the standing of their borrowers – appearing to be the most stringent in their requirements and expensive in their interest rates – Sufian is now actively pursuing an option of accessing a little over 800 million dollars from a bank in Switzerland, Swiss Bank, gossip disclosed.

But first, he has to take the country through the arduous process of listing it with one of the international rating agencies, which will put their mark on whether or not Ethiopia has an economy that is worth the risk to lend, gossip claims.

For now though, his Ministry is busy exchanging letters with those at the Central Bank and the PPESA in a bid to redress the withdrawal of billions of Birr from the latter’s account, gossip disclosed.

Addis Fortune