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Published On: Tue, Jan 5th, 2016

Ethiopia:What if they were really set free?

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20160102_MAP002_0If the government let people breathe, they might fly

The Ben Abeba restaurant is a spiral-shaped concrete confection perched on a mountain ridge near Lalibela, an Ethiopian town known for its labyrinth of 12th-century churches hewn out of solid rock. The view is breathtaking: as the sun goes down, a spur of the Great Rift Valley stretches out seemingly miles below in subtly changing hues of green and brown, rolling away, fold after fold, as far as the eye can see. An immense lammergeyer, or bearded vulture, floats past, showing off its russet trousers.

The staff, chivvied jovially along by an intrepid retired Scottish schoolmarm who created the restaurant a few years ago with an Ethiopian business partner, wrap yellow and white shawls around the guests against the sudden evening chill. The most popular dish is a spicy Ethiopian version of that old British staple, shepherd’s pie, with minced goat’s meat sometimes replacing lamb. Ben Abeba, whose name is a fusion of Scots and Amharic, Ethiopia’s main language, is widely considered the best eatery in the highlands surrounding Lalibela, nearly 700km (435 miles) north of Addis Ababa, the capital, by bumpy road

Yet the obstacles faced by its owners illustrate what go-ahead locals and foreign investors must overcome if Ethiopia is to take off. Electricity is sporadic. Refrigeration is ropey, so fish is off the menu. So are butter and cheese; Susan Aitchison, the restaurant’s resilient co-owner, won’t use the local milk, as it is unpasteurised. Honey, mangoes, guava, papaya and avocados, grown on farmland leased to the enterprising pair, who have planted 30,000 trees, are delicious. All land belongs to the state, so it cannot be used as collateral for borrowing, which is one reason why commercial farming has yet to reach Lalibela. Consequently supplies of culinary basics are spotty. Local chickens are too scrawny. The government will not yet allow retailers such as South Africa’s Shoprite or Kenya’s Nakumatt to set up in Ethiopia, let alone in Lalibela, a UNESCO World Heritage site.

Bookings at Ben Abeba are tricky to take, since the internet and mobile-phone service are patchy. Credit cards work “about half the time”, says Ms Aitchison. Imports for such essentials as kitchen spares are often held up at the airport, where tariffs are sky-high: a recent batch of T-shirts with logos for the staff ended up costing three times its original price. Wine, even the excellent local stuff, is sometimes unavailable, because transport from Addis, two days’ drive away, is irregular and private haulage minimal. The postal service barely works. Fuel at Lalibela’s sole (state-owned) petrol station runs out. Visitors can fly up from Addis on Ethiopian Airways every morning, but private airlines are pretty well kept out.

Many of these annoyances could be removed—if only the government were brave enough to set the economy free. “The service sector here is one of the most restrictive in the world,” says a frustrated foreign banker. The government’s refusal to liberalise mobile-telephone services and banks is patently self-harming. Ethiopians have one of the lowest rates of mobile-phone ownership in Africa (see chart); the World Bank reckons that fewer than 4% of households have a fixed-line telephone and barely 3% have access to broadband.

The official reason for keeping Ethio Telecom a monopoly is that the government can pour its claimed annual $820m profit straight into the country’s grand road-building programme. In fact, if the government opened the airwaves to competition, as Kenya’s has, it could probably sell franchises for at least $10 billion, and reap taxes and royalties as well; Safaricom in Kenya is the country’s biggest taxpayer.

Moreover, Kenya’s mobile-banking service has vastly improved the livelihood of its rural poor, whereas at least 80% of Ethiopians are reckoned to be unbanked. For entrepreneurs like Ms Aitchison and her partner, Habtamu Baye, local banks may suffice. But bigger outfits desperately need the chunkier loans that only foreign banks, still generally prevented from operating in the country, can provide. A recent survey of African banks listed 15 Kenyan ones in the top 200, measured by size of assets, whereas Ethiopia had only three.


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