Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 17th of July twenty twenty-five. A quick summary of what's going down in Ethiopia.

Let’s begin with news about the Grand Ethiopian Renaissance Dam or GERD, which the government is building on the Nile River. On Monday the 14th, US President Donald Trump referred to the Egypt-Ethiopia dispute over the GERD, sort of repeating a statement from June, when he said that the US stupidly provided financial support for the project and criticized the GERD. He has also criticized that the dam would decrease the flow of water to Egypt. Ethiopia staunchly denies Trump’s allegations, which have angered Ethiopians because contributions from the public funded the project.

After Trump’s statement, the Ministry of Foreign Affairs met with Irvin Massinga, the US Ambassador to Ethiopia, on Tuesday the 15th. Both the Ministry’s officials and the Ambassador refrained from commenting on the meeting.

About five years ago, Trump expressed dissatisfaction with the previous US administration for funding the GERD, arguing that “Egypt’s going to blow up that dam”. However, PM Abiy Ahmed said the Dam is complete and is scheduled to be inaugurated this September.

Next up, the draft income tax bill is facing criticism from several sources. It was recently made public because the government wanted the input of stakeholders before approving the bill. So on Monday the 14th, they attended a discussion session at Parliament.

One of the attendees was a representative from Safaricom, a foreign private telecom company. He opposed a clause in the draft bill that limits tax carryover, which means the company can’t offset the tax it has to pay in a profitable year to compensate for a year it posted a loss. The representative said Safaricom is engaged in capital-intensive investment, which could result in a net loss for years until it starts making profits, and if this bill passes, its net profits will take a dive.

He called on the Ministry of Finance to either exempt this bill from applying to companies that are posting a net loss or exempt capital-intensive businesses from this framework. He warned that this clause might discourage foreign investment.

However, all these concerns were to no avail because on Thursday the 17th, the legislature approved the bill with little to no modifications.

Let’s move on to another topic, as in a recent report, the African Development Bank said anywhere between fifty-five and eighty percent of the money that is transferred out of Ethiopia passes through illegal import-export channels, which costs the country two point two percent of its GDP.

In business updates, the Dangote Group, owned by Aliko Dangote, the Nigerian billionaire and Africa’s richest man, has reportedly received a permit from the Sheger City Administration, in the Oromia region, near Addis Ababa, in central Ethiopia. The permit will enable the Company to build its second cement plant in the country. The City’s investment Bureau official said Dangote will also receive the land where the plant will be built after signing a lease contract with the Sheger City Administration, and paying the administration.

Neither the Dangote executives nor the Administration’s officials have said how much money will be invested in this new plant.

Recall that Dangote entered the Ethiopian market ten years ago by building a cement plant that cost five hundred million US dollars. The plant currently churns out two and a half million tons of cement annually.

Speaking of cement factories, let’s follow up with Mesobo, as in a previous episode we reported that it had ceased operations due to disputes within the board and with the Southern Zone administration of the Tigray region. The news outlet that broke the story said it received a letter from the company confirming that it has been two months since work stopped. However, the company clarified that this was not due to disagreements within the board or the region’s administration.

The company said that operations had halted because the limestone quarry site, where raw materials are produced, had stopped delivering the input due to disagreements over the way the community that resides in Southeastern Tigray’s Enderta district should be relocated. Also refuting last week’s reports, the company said it hasn’t stopped paying its staff their wages.

The South Radio and Television Enterprise might stop operating as well. Its employees are concerned that the enterprise is on the verge of dissolving, saying that it is struggling to pay them their wages. Recall that the former Southern Peoples’ region was the owner of the enterprise. They explained that ever since the region has been dismantled into three regions, its operations have suffered because no one has taken proactive ownership.

Meanwhile, the Commercial Bank of Ethiopia revealed in its annual report that it has raked in almost thirty-three billion birr, which is around two hundred million US dollars, this past fiscal year alone, a fourteen percent increase compared to the previous year. The Bank’s profits will need a steep climb if it’s going to fulfill its goal of eighty-five billion birr, which is over half a billion US dollars, for the fiscal year that just began. This represents an over a hundred percent increase from the current profits.

The Bank also considered its deposit tally as a positive indicator of its growth, as it collected half a trillion birr, which is over three billion US dollars, in the past year alone. Because of this, it’s surprising to hear that the total number of people who deposited has decreased compared to the previous year by almost two million.

We’ve got some interesting news for investors as the government announced plans to sell treasury bills in the country’s stock exchange to cover its budget deficit from the current fiscal year, which exceeds a hundred and seventy billion birr, which is over a billion USD. The Minister of Finance announced last week Friday the 11th that any Ethiopian can begin purchasing treasury bills through the Ethiopian Securities Exchange.

Government entities also broke down their performance for this past fiscal year. The Immigration and Citizenship Service presented its annual report on Monday the 14th, saying it issued over six million travel documents for air travel and over a million for road travel. It pointed out that only seven percent of the country’s population has a passport and that it plans to give out more than four million passports in this fiscal year.

Despite the Service not being a for-profit entity, it plans on bringing in sixty billion birr in revenue, which is around four hundred million US dollars, a little under double the amount it collected this past fiscal year.

The Service’s Director General said twenty-six employees of the Service have been detained on suspicion of corruption, and over three thousand expats who did not renew their visas have been forced to pay their renewal fees. Even though they paid the fees, they still overstayed in the country, so they were subsequently deported. Besides, some of those deported might have had some devious reasons for not renewing their visas.

Wrapping up this edition on an unrelated note, The Policy Studies Institute, in collaboration with UNICEF, conducted a study and revealed that about thirty-four percent of persons with disabilities in Ethiopia live in urban areas, while the rest live in rural parts of the country. The rate of individuals with disabilities in the country is at five point seven percent.

The report cited war as the main cause of disabilities, with the second biggest being aging, and the third, malnutrition. Persons with disabilities also struggle to get adequate healthcare and have to pay slightly higher for health services.

Aaand that’s it for this week! Thank you for joining us!

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