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Oromia Speaks

Article from Oromia Speaks Vol. 10 Issue 1

EPRDF Replaces Public Enterprises with Political Party Businesses

The Ethiopian Peoples Revolutionary Democratic Front (EPRDF) dominating Ethiopia, has been fully engaged in privatizing public enterprises, organized by the previous regime of the Military- Socialist Government of Ethiopia, since it snatched power by force in 1991. The Privatization Program and building of a free market economy was initiated by international donors, spearheaded by the IMF, as a major conditionality to mobilize foreign financial resource for the development of Ethiopia. The aim of a Privatization Program is to restrict the government’s role in economic production and distribution so as to create a level playing field for the private sector and development of a competitive market economy.

However, what the EPRDF government is doing is a mockery of the principles and hoodwinking the international donors and democratic states. Parallel to the privatization of the Ethiopian public enterprises, the EPRDF is busy building its Economic Empire with the instrumentality of political patronage to inherit the lion’s share of the previous socialist government as a major actor in the Ethiopian economic activity. The EPRDF under the hegemonial leadership of the Tigray People’s Liberation Front (TPLF) is engaged in agriculture, mining, industry, trade, construction, transport, finance, and service activities to be an elephant economic entity in Ethiopia so as to be able to strangulate private sector economic development as well as progress of democratic political process.

The EPRDF/TPLF establishes and controls its economic conglomerates through the Para-NGOs, organized for specific purposes over its political life. Among the TPLF economic agencies, the Relief Society of Tigray (REST) was created in 1978 and presented to the international donors as NGO, independent of and separate from the TPLF. Whereas in reality it is a TPLF-auxiliary, secretly headed by a TPLF-Central Committee member. The main task of REST was to tap the resources of the international NGO- community, which was reluctant to deal directly with an armed guerrilla movement for relief and development in TPLF controlled parts of Tigray. The input of external donors through REST into TPLF-held areas of Tigray was considerable and had several and crucial benefits for the TPLF. Due to the international donor support, REST not only could provide much needed relief to the war and drought affected civilian population of Tigray but also could build up its own financial assets in an impressive manner. The extent of this build up, as well as its material property, particularly a huge transport fleet, was carefully hidden from the donors .

When Tigray was liberated from the control of the government in Addis Ababa in 1988, the TPLF was faced with the challenges of developing Tigray. To cope with this challenge, the Tigray Development association (TDA) was created to mobilize resources from educated, wealthy, and pro-TPLF members of the Tigray Diaspora particularly in Europe and North America. Though it was assumed to be independent of the TPLF structurally, members of its Board of Directors are top TPLF political leaders.

After the end of the war, both REST and TDA, experienced a rapid organizational growth. REST formalized and further expanded its organizational structure and presence on the ground in Tigray whereas TDA consolidated and expanded its branches within Tigray and established new ones among the Tigray Diaspora in other parts of Ethiopia. Both organizations also tremendously increased their financial resources; REST mainly through immensely increased funding by international NGO and governmental aid-organizations; TDA mainly through an intensification of fund-raising campaigns backed up by the political power of the TPLF.

Finally, in 1995 the TPLF set up the Endowment Fund for the Rehabilitation of Tigray (EFFFORT). Legally, EFFORT is a non-governmental public charity in the form of a foundation. But it seems to be even more strictly controlled by TPLF than REST and TDA. The large majority of its Board of Directors members (7-8) are directly representing the TPLF.

Parallel to the post-war consolidation and expansion of the Para-NGOs, the TPLF begun to set-up legally private companies with high-ranking TPLF-members, and possibly some trusted private Tigrians close to the TPLF-leadership, fronting as shareholders.

“A Preliminary Survey of Ethiopian Non-governmental Business” shows that investment by the TPLF companies in the Ethiopian Economy runs into billions of dollars. For instance, some of the companies have started operations with staggering authorized initial investment capital as indicated below:

Mesebo Building Materials Manufacturing SC 240.00 million Br.

Almeda Textiles Manufacturing SC 180.00 million Br.

Sur Construction 100.00 million Br.

Trans-Ethiopia SC 100.00 million Br.

Dashen Brewery SC 60.00 million Br.

Wegagen Bank SC 60.00 million Br.

Dedebit Credit and Savings Institution SC 60.00 million Br.

Addis Pharmaceutical Production SC 53.00 million Br.

Sheba Tanery Factory SC 40.00 million Br.

Africa Insurance SC 30.00 million; Br.

Zeleke Agricultural Manufacturing SC 27.00 million Br.

Hiwot Agricultural Mechanization SC 25.00 million Br.

Meskerem Investment SC 20.00 million Br.

Beruh Chemical SC 20.00 million Br.

Tesfa Livestock Development SC 20.00 million Br.

Mega-net Corporation SC 10.00 million Br.

Express Transit Service SC 10.00 million Br.

Guna Trading House SC 10.00 million Br.

Nearly, all the companies mentioned above are located in Tigray except few, to create job opportunities for the people of Tigray, control supply and develop Tigray unevenly, while letting the other states deteriorate.

Moreover, trade enterprises have monopolized fertilizer trades in Ethiopia to control the huge majority of the farming population through the fertilizer credit system and denial of opportunity of purchase if a farmer is not loyal to the TPLF politically and cast ballots, if there is election. Companies engaged in coffee trade displace small traders and suppress suppliers’ prices at will. Dedebit Credit and Savings Institution SC also extends credit to poor peasants. To get the credit, primarily, a farmer should vote for the TPLF. Similar mechanisms of credit-cum-vote are being established in Oromia, Amhara, and the Southern Nations Nationalities and Peoples States for the same objectives. It is to suppress free and fair elections and ensure the invincibility of the TPLF/EPRDF.

Generally, the private sector in Ethiopia cannot compete with the government supported financially heavy party enterprises. It is an indirect socialist economic control, vote trading if there is democracy. If this state of economic operation is continued unabated, the TPLF/EPRDF will be the single dominant economic actor in Ethiopia by systematically killing all the private initiatives. It is to accomplish this grand design that the TPLF/EPRDF formulated a Revolutionary Democracy Development Strategy. Revolutionary Democracy is a precursor of socialism not a market economy.

If a free market economy is to flourish in Ethiopia, all the TPLF/EPRDF economic enterprises should be sold to the private sector and the party desists from engaging in economic activities. The IMF and the World Bank fully understand that the TPLF/EPRDF is moving towards a state controlled economy. The experts and the management don’t have the heart to tell them to change the course. The TPLF leadership knows how to deceive these two international organizations. The President of the World Bank had asked Prime Minister Meles Zenawi, at their discussion in Addis Ababa, to privatize these party enterprises. But Meles told him that the property doesn’t belong to the government of Ethiopia but captured from the enemy in fighting and it should remain the exclusive asset of the TPLF. It is amazing as to why the World Bank President did not insist that there should not be two governments in one country. If Meles resisted why didn’t he withhold assistance? It should be answered. The European Union also had reported against these unfair party economic swindling practices. Yet they are continuing to finance the EPRDF. Donors should insist on transparency to create level playing fields for economic actors and political operators.


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