Briefs on Ethiopian Green Economy, Inflation & Occupational Safety

Before jumping onto the briefs let me reflect on the Ethiopian Business Review magazine itself. This is my third consecutive EBR print magazine that I have read, and before reflecting on few very important and timely articles in it, and before I branch of to explore the Amharic magazines and news papers, let me say that I like this magazine. I think it is one of the informative English magazines around here that attempts to really stay on topic (business subject in this case) and tries to give its readers something to chew on, just as its slogan goes “depth to your thought”. However, when I finish reading it, I always feel I just started and it is finished. It feels, you just had a taste of things on the surface level, but that is it. So I started to think why do I get that feeling and sought to compare its contents to some other magazines lingering around the living room.

The answer, perhaps, it has to do because I am used to American magazines and no doubt the US magazines have much more content, depth and quantity. The Ethiopian magazines seem to be relatively on the same level with each other, about the same amount of pages and allocate about equal proportion of pages for ads. I don’t want to be seen as if I am trying to compare an infant with a globally acclaimed one, but to give a basic reference point, the Economist on average has about 100 pages and averages about 100 articles, while EBR for example has about 55 pages and has only 14 articles. I think adding more articles and being a bit more concise on many of the articles would be great (at least for my taste).

With that being said, here are few briefs for your curious mind. Very soon my reflection of an article by Nobel Laureate Joseph E. Stiglitz Ph.D Ph.D.’s advice to African countries and another article about how long before the Ethiopian financial market is liberalize will follow.

Briefing the Brief

Ethiopian Green Economy. As Africa’s first carbon finance project Ethiopia’s own Humbo Community Based Forest Management project in Wolayta Sodo of the SNNPR got $34,000 from the World Bank in 2012. The Bank also committed to provide a total of $726,000 in the next 10 years. The already under construction Ethiopian National Railway Network will be the second project; aiming to be an all carbon free with a goal of securing $1 billion of the $5.9 billion (~17%) budgeted expense from carbon finance trading.

Ethiopia inflation, from 2006 - 2013 the average inflation was 21.07%; since then, it has shown a consistent gradual decline. It reached its lowest of only 6.1% in May 2013; slightly rising again to 8% for this past August 2013. Economists say the main source of the inflation is due to the unconstrained investment in the public sector (also estimated to be responsible for the country’s 2/3 of economic growth). According to the World Bank, public investment in Ethiopia is ranked 3^rd highest in the world as per percent of GDP. Yet, its private investment is ranked 6^th lowest in the world. Many of Ethiopians think the value of their currency the Ethiopian Birr is too low, as one blatantly complained, “the Birr is worthless”. I have been wondering if there is any economic research done to learn whether such perception in the public’s mind has its own psychological effect of encouraging people to spend rather than save. Because, people seem to spend and give little attention to the months ahead of them.

EBR’s Addisu Deresse writes, in Ethiopia there is high rate of occupational injuries, because the lack of adequate workplace safety training and the lack of enforcement for existing laws. The law on paper and the reality on the ground don’t match. For instance, according to the Ethiopian Labor Proclamation, if an employee is injured on the job and is not able to work, the employer must compensate the employee for 1year, at the rate of 100% of the employee’s wage for the first 3 months, 75% for the next 3 months and at least 50% of the employees wage for the remaining 6 months. Unfortunately, the awareness level is so low that not many employees are able to realize these and other similar employee benefits and rights. It seems there is a steep hill for all stakeholders to climb.

Cheers,

Daniel