Addis Fortune gossip: The Revolutionary Democrats are a political force capable of generating policies

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More often than not, the Revolutionary Democrats are a political force capable of generating policies designed with good intent, but variable results, gossip noticed. Take for instance the kind of lending policy they have, which in effect discriminates the indigenous businessperson, not only against a foreign investor, but also an Ethiopian with a different passport in their pocket, claims gossip.

Largely designed as a positive means of attracting foreign direct investments from countries such as Turkey and India, an investor with foreign capital would spend their own resources in putting up a plant and installing machineries, gossip claims. This may consume under half of the value of the total investment, if not less, gossip says. The investor then would visit Issayas Bahre, president of the state owned Development Bank of Ethiopia (DBE), on Marshal Tito Road, to obtain a loan in order to complete the project, or to be used as a working capital, according to gossip. That is only against the collateral of the plant built and the machineries installed, gossip observed.

This is a forbidden fruit to domestic investors, which makes their blood boil, gossip observed. Those in the macroeconomic team have made up their minds long ago that such a policy open to local investors would be exposed to abuse, gossip claims.

Yet another good intention often derailed is in the form of the Metal & Engineering Corporation (MeTEC) – a mammoth military industrial complex trusted by the Revolutionary Democrats to serve as a catalyst in the nation’s drive to transform the subsistent agrarian economy to one based on industrial manufacturing, gossip observed. Not only is the administration generous in making the nation’s resources available to the high military brass that runs the show at the MeTEC, but too they are granted cart blanche in their dealings with the state bureaucracy. This creates uneasiness among some in the administration, gossip disclosed.

Such uneasiness, however, has made its way all the way up to the corridors of power up on Lorenzo Te’azaz Road over the past few weeks, gossip reveals. The decision made to the unorthodox request from the MeTEC has no doubt frustrated the officers down on Roosevelt St, claims gossip.

With a questionable oversight from the legislators, the top brass of the MeTEC appears before Parliament once a year to report on its performance, gossip observed. During one such appearance, its CEO, Kinfe Dagnew (Brig. Gen.), told MPs that the company sleeps on an inventory valued at 13.6 billion Br, largely due to the lack of a market.

Cash strapped to finance much of its production, including the many projects the MeTEC subcontracts to private operators, senior managers were brainstorming options which could allow them to move forward, claims gossip. One such preferred option was to introduce what they termed as “bonded industries” – a concept that appears to be drawn from a buzzword in the logistic industry – “bonded warehouse” – according to gossip.

Such a system is devised to allow the MeTEC to import parts and machineries it needs from suppliers overseas without paying duties, thereby saving cash in the process, gossip disclosed. What was imported would be allowed to make its way to the factory site, with close supervision from customs officers; the assembly takes place, again under the watchful eye of these officers, and when buyers come at the end, money is paid where the Ethiopian Revenues & Customs Authority (ERCA) could collect what is due to it before the goods are released to buyers, gossip disclosed.

It would take the authorities at the Ministry of Finance & Economic Development (MoFED) to grant permission to this unusual request before the ERCA can proceed, gossip disclosed. Those at the MoFED directed it to the Prime Minister’s Office for executive approval, claims gossip.

Nonetheless, a devise the MeTEC managers saw as an innovative approach to solving a practical problem was seen in a different light up at Arat Kilo, gossip disclosed. As it is perceived as a proposal that has its doors open to abuse and corruption, the Prime Minister’s answer to it was a short “no”, gossip disclosed.