Baptism by frustrations: PM HMD in his first encounter with investors

30 Oct

PM HMD accompanied by advisers at first encounter with the business community (Photo credit: Addis Fortune)

Wednesday, October 23, 2012 marked the start of the policy journey of Ethiopia’s new Prime Minister, Hailemariam Desalegn. Accompanied by his deputy Demeke Mekonnen and his advisor Arkebe Okubay, Hailemariam spent the whole day locked-up in a meeting with over 500 private local and foreign investors involved in the manufacturing sector.

The meeting meant to push the sector forward to meet its envisioned Growth & Transformation Plan (GTP) targets had seen a rather conciliatory Hailemariam trying to strike a balance between the offerings of the state and the demands of the private sector. Little was said by veteran policy minds such as Mekonnen Manyazewal, minister of Industry (MoI), whose ministry organised the meeting in collaboration with voluntary private sector institutions, for the whole meeting focused on what would come out of the new policy chief. The new chief, however, provided nothing but general commitments, leaving the business people for more days of contemplation.

Predictably, most of the businesspeople cried loud about the rather excruciating logistic problem they are forced to shoulder due to the chaotic implementation of the multimodal transport system. “We will act to solve the problem as soon as we get the results of the study we are conducting,” Hailemariam told the industrialists. They also urged the government to consider alternative financing vehicles, such as supplier credits, than sticking with the traditional financing tools that the Development Bank of Ethiopia (DBE), the state-owned financer, offers for investors engaged in the productive sector. Some even suggest for the current financing vehicle where in investors present 30pc financing and the DBE provides 70pc to be revised to a 10pc:90pc proportion.

The proposal, however, was bashed by the Prime Minister who countered that such a scheme will make the government the sole investor rather than the investors themselves. “No government but the developmental government of Ethiopia provides even a financing with 30:70 arrangement,” Hailemariam declared boldly.

(Source: Addis Fortune)

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