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CEPO of South Sudan: “Working Points for IGAD-LED Revitalization Porcess” (15.10.2017)

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Ethiopia: The Economy is struggling, not a rising lion as previously forecasted!

For as long as I can remember there gone stories of the amazing rise of the Ethiopian economy, the financial markets and the outputs out of this world. Where the money would grow ten-folds within minutes of its arrival. Like a mirage the number’s must have appeared in front of our eyes and stories that, we are told over the recent years. The Ethiopian powerhouse and the serious contender with Nigeria and South Africa. With their railways, banks and development projects, the powerful dam and all the others. It must have been a ride for the Ethiopian People’s Revolutionary Democratic Front (EPRDF), Prime Minister Hailemariam Desalgn, must be so proud of his achievement.

Why I say that, because a booming economy does not do this:

“Ethiopia and World Bank have signed a 1.3 billion dollar grant and loan agreement to enhance equitable services and reduce food insecurity. The agreement was signed by Abraham Tekeste (PhD), minister of Finance & Economic Cooperation (MoFEC) and Carolyn Turk, World Bank’s country director for Ethiopia, Sudan, and South Sudan” (All Africa, 2017).

So when a booming economy, that has such magnificent rates and growth prospects should not and no need for extensive borrowings from the World and subsidiaries, to say they need so is a lie. The debt and the international support for projects and food security is not a sign of a sound and strong economy. More of the latter if I beg to differ. On that, alas the recent weeks has proven this. World Bank was ushered in the end of September, but it is now cash-crunch time.

Not the jolly Captain Crunch, but the credit is due.

“Ethiopia will devalue its currency to attract foreign investment and close the gap in foreign trade, President Mulatu Teshome said at the opening of the bicameral parliament on Monday. He said his government is faced with a serious shortage of hard currency and export trade has dwindled in last three years. Mulatu said major projects like the construction of railway and universities will not be carried out this budget year due to a serious shortage of finances” (ESAT, 2017).

The seriousness is there and it is bleak, when the President Teshome shows up and spread enlightenment to the world. That the economy is fragile and not at its peak, is clear when all the prestige and the giant projects are now put on hold until further notice. Clearly, the financial strains have hit the economy, as well as their exports has given them less hard currency.

It does not go well, when just days ago, when this hit the fan as well:

Double-digit inflation keeps threatening the macroeconomic conditions of the country as the headline inflation rate hit 10.8pc last month, according to the Central Statistical Agency (CSA)- the highest since October 2015. It is in contrary with the target of the government in the second edition of Growth & Transformation Plan (GTP II) to keep inflation in a single digit. The hike in the price of cereals such as teff, maize, wheat, barley, beans and sorghum coupled with holiday-driven price upsurge is the primary reason for the inflationary pressure last month, keeping the food inflation stagnant around 13pc.“As September is a time of multiple holidays, it is believed to influence the increase in the inflation rate,” the report of CSA reads” (Berhane, 2017).

That the cash crunch and the double-digit inflation hits the Republic is not a good look. The proof of the currency value falling, lack of hard currency and new Multi-National loans proves that the Financial Sector and Financial Institutions are strained. There is nothing more to give, it is just bones and not meat. It is just a matter of time before the boiling bones gives no taste to stew as well!

In addition, you the economy is bonkers when their agency spread out this sort of tales, at the time the devalued currency is told to the public on other platforms.

This is from the Ethiopian News Agency:

“The diplomats, who observed the government’s direction at the joint session of the parliaments, whom ENA has talked to also forecasted the country`s economic growth to be amplified in better manner referring the current stability of the nation. Ambassador of Bangladesh to Ethiopia Monirul Islam said the growth that Ethiopia’s economy has witnessed was ‘wonderful’ despite the drought and other problems. “It was 10.9 percent and this year I hope it will be more than that because there is a good rain, everything is good, the state of emergency has been lifted and everything is normal”. “So I think the economy should perform better especially in the agriculture sector as well as in the industry sector”, he pointed out” (ENA, 2017).

I do not know if Ambassador Islam lives in alternative reality or trying to sugarcoat the situation of the dire economic state that the Republic is facing, but it makes good propaganda for the ones who still want the fantastic picture spread around the globe. That the Ethiopian economy is sound and still growing. However, it is hard to grow when you lack currency, you have growing inflation and you are borrowing more funds. I do not know, which economy or financial system that it works splendid in. Certainly not this one.

In addition, the news of the financial rising tiger or lion of Ethiopia has been a mirage, a fraud and play for the world to see. At this stage and in time, it is far from it. The Ethiopian economy is plummeting and at amp speed. If you eat up the crap the ENA serves you, it must certainly serve your kind, but it is not reality. The President even said so, the reports are striking and the added loans proves the dire state.

The ones who is the most hurt. It is the citizens who needs the hard currency to buy food and live, they are punished for the reckless care of the financial system. They are the ones who suffers, because of how the state decided to conduct their affairs. They are the ones who feels the inflation, the rising prices and still has to get by. It is not right, but that is how it is. The Ethiopian government should subsidize and make sure the people get enough. However, do not expect that. This is from the same government that sent Agazi squad to Amhara and Oromia to kill and destroy. They do not care, unless they have too or if it keep them in power. Peace.

Reference:

All Africa – ‘Ethiopia: World Bank Assents U.S.$1.3 Billion Finance to Ethiopia’ (30.09.2017) link: http://allafrica.com/stories/201710090243.html?utm_campaign=allafrica%3Aeditor&utm_medium=social&utm_source=twitter&utm_content=promote%3Aaans%3Aabljpw

Berhane, Samson – ‘Gov’t Sees Double Digit Inflation, Again’ (08.10.2017) link: https://addisfortune.net/articles/govt-sees-double-digit-inflation-again/

ESAT – ‘Ethiopia President Says Country is Broke’ (09.10.2017) link: https://www.tesfanews.net/ethiopias-president-says-country-financial-crisis/

ENA – ‘Diplomats Laud Economic Performance of Ethiopia’ (10.10.2017) link: http://www.ena.gov.et/en/index.php/economy/item/3814-diplomats-laud-economic-performance-of-ethiopia

 

South Sudan: “Subject: Appointment of Party’s General Secretary and Executive Secretaries of South Sudan United Movement” (07.10.2017)

SPLM Leaders Former Political Detainees (FDs) letter to IGAD: “Visit of IGAD Foreign Ministers Delegation on the ARCSS Pre-Revitialization Consultation Forum” (07.10.2017)

President receives special message from South Sudan’s Salva Kiir (03.10.2017)

President Museveni and General Ajong discussed UPDF – SPLA security cooperation and training.

KAMPALA, Uganda, October 3, 2017 – President Yoweri Museveni has today met a delegation of the Sudan People’s Liberation Army (SPLA), led by General James Ajong Mawut who is the Chief of Defense Forces of Republic of South Sudan.

During the meeting which took place this afternoon at the State Lodge in Mbale Municipality, Eastern Uganda, General Ajong conveyed a special message and a letter of appreciation from President Salva Kiir of South Sudan to President Museveni, commending him for the continued support and solidarity with the government of South Sudan.

President Museveni and General Ajong discussed UPDF – SPLA security cooperation and training.

Uganda and South Sudan have long standing economic and security interests. Uganda is also host to over one million refugees fleeing from the instability in South Sudan.

Opinion: CSO’s Paper to IGAD HLRF is revealing!

There were many insights and deep stuff in the CSO Report to IGAD, which has been written and submitted to Intergovernmental Authority on Development (IGAD), has put their stakeholders, and their pride into trying to forge a peace, even after the peace agreement of 2015 has been shot into tatters recently. The IGAD are clearly on a mission to sustain their place and their negotiations with the parties in South Sudan. As the conflict and battles within becomes more dire, when the consequences of not doing it, is more life in danger and a more uncertain future for the republic. Clearly, all parties knows what at stake, as the IGAD have proven not to be to impartial, as well as the foreign intervention from Uganda, has been in favor of the SPLM-IG, clearly, there are many more obstacles to fix before the due date of the newly proposed peace mediation. That is why the paper from the CSO is revealing, especially, the part if IGAD fail, which I think it will do, as long as people are sidestepping the SPLM-IO and the newly created militias and opposition forces. Look at their take if the IGAD fails, which is such a dossier.

“IGAD faces a daunting task in securing a political settlement through the HLRF process. Not only must it contend with the fracturing of armed groups and the proliferation of new political formations, but divisions among IGAD member states themselves undermine the diplomatic leverage that mediators have at their disposal. From the very start of the conflict, it has been clear that the four frontline states of Ethiopia, Kenya, Sudan and Uganda are essential to the solution of the conflict in South Sudan. Only they can offer the incentives and disincentives that are needed to bring the various factions together behind the terms of a political settlement. To date, the vested interests of some political elites in the region have prevented IGAD from mounting a united response. The next few months will show whether the situation in South Sudan has reached a point at which it poses such a serious threat to regional peace and stability that the region is forced to respond accordingly, or whether IGAD’s ability to respond will once again be undermined by narrowly defined state or personal interests” (CSO Paper, September 2017).

“If the HLRF process fails, the IGAD region must accept that it is unable to resolve the crisis in South Sudan and hand over responsibility for the mediation effort to the AU. The four frontline states can still engage in the context of an AU-led mediation, but they should not be able to dominate the process and use it as a forum to promote their own narrowly defined interests. The AU should start preparing itself now by developing a political strategy for a possible AU-led mediation effort. This strategy should go beyond any eminent personalities that may be appointed to lead the process to consider how the AU approach would differ from that of IGAD. In addition, IGAD and the AU should make clear to the warring parties that if they fail to agree on a political settlement in the context of the HLRF, IGAD and the AU will request that punitive measures be imposed on parties who undermine the process. Such punitive measures are long past due and are the only means to communicate to the leadership on all sides of the political divide that the African region will no longer allow the people of South Sudan and the region to be held hostage to their leaders’ pursuit of power” (CSO Paper, September 2017).

It is really telling how they are explaining in these passages, the reality of the daunting task ahead, as the SPLM/A and SPLM-IO are the key component to the crisis and stalemate, but this in effect has created many more enemies of both. The former SPLM/A and SPLM-IO who has become their own parties and their militias, are within all reason making the road-map for peace more hectic. As there isn’t just two leaders who wants to be supreme. But a dozens who wants to topple them both, by all means and with full force. This should not overshadow the need for diplomatic and negotiations between SPLM/A and SPLM-IO, neither stop the SPLM/A reunification project, even how flawed both has been.

The marginalized and silenced parts of the discussions, the rebellions against both parties, should be looked at if the IGAD HLRF Process is a honest one. If the IGAD approach should bear fruits, the SPLM-IO ghost is haunting the process and the dialogue. As well as all the former generals who has created their own outfits, who needs to included, unless they want to create a new fragile peace. That could blow up any second after the ink has run dry. Peace.

Reference:

CIVIL SOCIETY OPTIONS PAPER ON THE IGAD HIGH-LEVEL REVITALIZATION FORUM (September 2017)

 

Communiqué of the 720th meeting of the PSC, at the ministerial level, on the situation in South Sudan (20.09.2017)

WHO and partners respond to flood crises in the former Northern Bahr el Ghazal and Upper Nile States of South Sudan (19.09.2017)

As part of the health cluster response, WHO delivered lifesaving medical supplies to the communities affected by the heavy rainfall and subsequent flooding.

ADDIS ABABA, Ethiopia, September 19, 2017 – The World Health Organization (WHO) in partnership with the Ministry of Health and partners are scaling up the emergency response in the flood affected areas of Aweil West and Aweil North Counties of former Norther Bahr el Ghazal State, and Maban County of former Upper Nile State.

As part of the health cluster response, WHO delivered lifesaving medical supplies to the communities affected by the heavy rainfall and subsequent flooding. The lifesaving health supplies will benefit 10 000 people living in areas deeply affected by the heavy rainfall in parts Northern Bahr el Ghazal and Upper Nile States of South Sudan for the next three months.

The supplies include 10 basic unit kits and 10 pneumonia kits for management of common illness. The supplies were deployed along with Medical Mobile Team (MMT) to support other health partners in management of common illnesses to reduce excess mortality and morbidity and build the capacity of partners in early case detection of outbreak prone diseases.“Building the capacity of partners, increasing human resource and medical supplies are vital in such acute emergencies since it increases access to quality health care services to the affected population” said Mr Evans Liyosi, WHO Representative a.i to South Sudan.

According to the State Ministry of Health, it is estimated that over 119 000 people have been affected due to flooding triggered by the heavy rainfall in 11 payams of Aweil North and Aweil West of former Northern Bahr el Ghazal State. More flooding also caused some deaths and injuries and has deeply affected the daily lives of over 650 households in eight villages of Bunj payam, Maban County, Upper Nile State.

The risk of water-borne disease in the wake of the floods is real; a cholera epidemic has already affected thousands of people, causing over 355 reported deaths said Dr Allan Mpairwe, WHO Health Security and Emergency Officer. We have to act very fast to avoid the spread of water-borne diseases and the transmission of vector-borne diseases such as malaria, Dr Mpairwe underscored.
The floods have also destroyed roads, schools, homes, crops and vegetables all over the affected areas. This means the situation will get worse, with more people needing temporary housing and urgent humanitarian help.

WHO will continue to strengthen its humanitarian support in coordination with the Ministry of Health and partners to save the lives of the vulnerable community, Mr Liyosi added.

Opinion: The Ethiopian Financial Market is plummeting…

The Ethiopian People’s Republic Defense Force (EPRDF) Prime Minister Hailemariam Desalegn have ordered to fix economic problem the government has. EPRDF has been hailed for their financial growth, but with this sort of news. You know the growth and the reality is far from the truth. Ethiopia News Agency: “International Consultant of Trade, Investment and Economic Development, Dr. Taffere Tesfachew said on the occasion the fact that African countries are performing better than the global average is testimony to how far Africa is coming over the decade. He noted that the economic growth of countries like Ethiopia and Ivory Coast is highly impressive at this time when other African countries are struggling with one or two percent growth” (ENA, 2017).

So I have to question the economic growth, as the Forex Woes and the remittance from the diaspora are proving otherwise. Together with the need of more foreign aid to solve the famine of the drought. So the World Bank clearly knows the troubles of the Ethiopian government since they did this:

The World Bank today approved a $600 million International Development Association (IDA)* grant to support the Government of Ethiopia’s vision of building a national safety net system to provide effective support in chronically food insecure rural areas, including providing cover during droughts. The Rural Productive Safety Net Project (RPSNP) supports the evolution of the Government’s umbrella Productive Safety Net Program (PSNP) that has been in operation for the last 12 years and is one of the world’s largest safety net programs in the world. Run by the Government, the PSNP pools money from 11 donors, including $600 million of World Bank Group IDA funds. The PSNP provides regular cash or food transfers to 8 million people; currently 4 million of them are in areas affected by the ongoing drought. Its food-for-work component supports public works programs related to landscape restoration, irrigation, and agro-forestry” (World Bank, 2017).

So, when the World Bank gives this as a support of the government. You should take it serious and know the problems of the state. The need of financial support and to make sure drought doesn’t affect the starving citizens. EPRDF are doing badly and now the Forex Companies has to pay of the National Bank of Ethiopia (NBE) for the debt to Enterprise in Djibouti. Look!

Foreign Forex Woes:

The directive of foreign currency allocation entails all banks must sell foreign currency to a sector whose importance is very high. The banks are required to give priority to payments authorized by the central bank such as foreign loan, supplier’s credits, interest, profit, dividend and excess sales of foreign airlines. Hence, all banks are required to sell the currency collected from importers, although the current direction is high, according to a banker with almost two decades of experience. “Even though I agree with the fact that we shared the responsibilities with CBE,” said one of the vice president of a mid-sized bank. “But requesting such amount of Forex in a short time might lead to crisis.” Yohannes Ayalew (PhD), vice governor and chief economist of the central bank, disagrees. “It is a collective responsibility of all banks whether the call was quick or not,” said Yohannes. “There is no reason to ask CBE to cover all the payments.” The Forex shortage in the country has been haunting the country for years. Prime Minister Hailemariam Desalegn, in his press conference with local media nine months ago, admitted that the Forex crunch would last for the coming two decades” (Addis Fortune, 2017).

NBE Directive to pay of debt to Djibouti:

National Bank of Ethiopia (NBE) gave order to private banks in Ethiopia to pay the 15 million USD bill the Ethiopian Shipping Logistics Services Enterprise (ESLSE) to Djibouti’s company. The banks are, according to Fortune, given 3 days to sell the foreign currency to the Enterprise. The order is said to have come when the entire country is in short of foreign exchange. The shortage came following the drop in the country’s export performance and remittance earnings. ESLSE owes the money to the port of Djibouti and the central bank gave the order for every bank including the government owned Commercial Bank of Ethiopia (CBE)” (Addis Fortune, 2017).

Beset by the ever expanding informal channels of remittance, Ethiopia may continue to grapple with shortage of hard currency unless swift and collective measures are put in place, ‘Scaling up Formal Remittance to Ethiopia’ report discloses. A billion dollar transaction takes place via informal channels with 78 percent of the total remittance passing through informal networks in Ethiopia. Some experts believe that the transfer of money through unregulated channels will also likely result in illicit financial flow and dealings. The seizure of 541,659 USD around Harar is a recent indication of informal corridors of hard currency. Informal channels happen to be lophooles for global terrorism and corruption. It will open doors for illegal activities, people may use it to collect huge sums of money for their own dangerous causes, says Ethiopian Financial Security Director General Gemecu Weyema” (Gebrehiwot, 2017).

All of these articles proves the problems of the National Bank of Ethiopia (NBE) and their lacking foreign exchange. This has become a problem as the remittance hasn’t come through the formal channels, as the informal economy are big in Ethiopia. Together with drop of foreign exports that has also hurt the amount of exchange.

Clearly, the government of Ethiopia has a bigger problem that they want to reveal, as the NBE and the Foreign Exchange is plummeting. Therefore, the need at the same time for World Banks loans. Shows the dire situation of the economy. It is not like the Ethiopian News Agency would speak ill of own government and their policies. Since, the propaganda of own growth are more important, than actually telling about the weakness of the economy. This is a reality since the financial policy of Forex Exchange is in favor of the NBE.

This can also make it more profitable to for an informal market, instead of in the open market. The Ethiopian government really needs foreign exchange to pay of debt and use all their means. Instead, they are trying to cover-up their troubles, as they have debt to Enterprise in Djibouti and have troubles with the famine caused by drought. Peace.

Reference:

Addis Fortune – ‘Ethiopian Government Orders Private Banks to Cover ESLSE Forex Needs’ (12.09.2017) link: https://www.ezega.com/News/NewsDetails/4679/Ethiopian-Government-Orders-Private-Banks-to-Cover-ESLSE-Forex-Needs

Addis Fortune – ‘Ethiopia: NBE Ordered Banks to Cover ESLSE’s 15 Million USD Bill’ (13.09.2017) link: http://www.2merkato.com/news/alerts/5220-ethiopia-nbe-ordered-banks-to-cover-eslses-15-million-usd-bill

Ethiopia News Agency – ‘Gov’ts Need to Act Together to Achieve Economic Success: UNCTAD 2017 Report’ (14.09.2017) link: http://www.ena.gov.et/en/index.php/economy/item/3705-gov-ts-need-to-act-together-to-achieve-economic-success-unctad-2017-report

Gebrehiwot, Desta – ‘Ethiopia: Informal Channels Raise Red Flag On Forex Earning’ (14.09.2017) link: http://allafrica.com/stories/201709140729.html

World Bank – ‘World Bank to Help Ethiopia Build a National Safety Net System as a More Effective Response to Droughts’ (14.09.2017) link: http://www.worldbank.org/en/news/press-release/2017/09/14/world-bank-to-help-ethiopia-build-a-national-safety-net-system-as-a-more-effective-response-to-droughts

Wau could provide “model” for return home of South Sudan’s displaced people (13.09.2017)

The number of displaced people living in the UNMISS Protection of Civilians (POC) site has fallen from 38,000 to 32,500 over the last two months.

JUBA, South Sudan, September 13, 2017 – The return of displaced people to their homes in Wau in north-western South Sudan could provide a “model” for other parts of the country, the Head of the UN Peacekeeping Mission in South Sudan (UNMISS) has said.

David Shearer, who is also the Special Representative of the UN Secretary-General, was speaking on a visit to Wau town.

The number of displaced people living in the UNMISS Protection of Civilians (POC) site has fallen from 38,000 to 32,500 over the last two months. Many of those people have returned home to cultivate their land.

“The security situation has improved in recent weeks,” Mr Shearer said. “I am pleased to see that the local authorities, the police and National Security have worked to improve the security environment.”

David Shearer met with the Wau Governor and security officials about cooperation with the UN, humanitarian agencies and importantly the displaced people themselves, to create the enabling conditions to assist people to leave the camps and go home.

“This collaboration could represent a new model for the return of displaced people,” he said.

“It is important that people return to their homes voluntarily,” Mr Shearer added, “and for that to happen they need to feel safe and confident about their future.”

UNMISS has recommended launching night peacekeeping patrols to residential neighbourhoods to provide additional security and boost confidence, a proposal that the State authorities are considering.

“UNMISS and our humanitarian partners both have a role to play in the eventual return of displaced people,” added Mr Shearer. “UNMISS can help by providing a greater sense of security and humanitarian agencies can offer more services outside the protection camps so those people will have more incentives to leave and restart their lives at home.”

In April this year the alleged ambush and killing of a government SPLA General in Wau led to clashes in the town resulting in the deaths of around 30 civilians.

The Special Representative visited the neighbourhood of Lokoloko on the outskirts of Wau where some residents have returned to their houses and started growing food on a small scale.

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