Dr. Abiy Ahmed, Council of Ministers, Regional Presidents


Low income Ethiopians are saying "Show us the Money!" 




Regardless of the decision to privatize or not  Ethiopian Airlines, Telecom, etc, please consider the following :

Low Income Ethiopians, 10 million households, of which 15-17% are urban dwellers,  are saying to you : “show us the money”  so we can  in our daily life feel  “Yebalebetnet Semet.”

“Trickle-down economics” did not work in developed world and will not work in Ethiopia.

Low income Ethiopians see the developments around them and are asking, “where is our portion of the growth?” and they are saying only  the rich can afford to wait for the full benefit from long term  infrastructure developments.

Can you please entertain concepts, methods, ideas that can help  poor Ethiopian households  obtain a piece of the action (shares ) in the  ownership of  profitable businesses in Ethiopia? And if available Ethiopian Airlines, Telecom etc.

How? I respectfully invite readers to add value to this submission.

Establish, organize “Yegna Investment” or choose another name, an entity that is 100 pc owned by low income households and distributes dividends, hopefully exempt from our 10 pc dividend tax. One hundred per cent of the dividends earned by Yegna Investments from its holdings after debt service will be distributed to lower income households of Ethiopia.

The unpaid and voluntary board members who decide how much and where to invest  Yegna Investments funds  can be government representatives , and from private sector business leaders and academia and some international experts .e.g. IFC.

Each lower income  household will obtain a certificate of share ownership reflecting his/her ownership in Yegna Investments, which they can keep in their homes and show to their children, our future, as encouragement and proof that they have a stake in the country’s growth, development and prosperity.

There is no shortage of companies to select and purchase shares from in Ethiopia that continuously earn significantly more profits than the percentage needed to pay back principal and interest on the loan taken by Yegna Investments, e.g. beverage, banks, consumer, cement  and if and when available Ethiopian Airlines and Telecom.

Similar applications have been fruitful in the US with the Alaska Permanent Fund, and  pilot projects underway in Switzerland, Canada, Finland, Netherlands etc. promoting shared wealth and inclusiveness.

Benefits:

  1. a) Enhances Ethiopia’s ability to attract and attain FDI by mitigating the safety concern and exhibits Ethiopia’s commitment to sustainable and equitable growth (the only hope we have).

Investment Capital  (both domestic and foreign) before profits looks for safety of principal.

Please allow me one observation:

Do you think if low income Ethiopians had owned proportional shares of the Turkish Garment plant (note: not involved in management), the facilities would have been burned? I do not think so!

  1. b) To show their support world sources of credit will be more apt to provide credit for both existing and new foreign and domestic investment in Ethiopia’s economy.
  2. c) The economic multiplier effect whereby low income Ethiopian households, in the tens of millions possess increased disposable income which will be used to purchase exclusively domestically produced goods and services (as they cannot afford imports) will accelerate our shared and sustainable economic growth in pace unseen before in Ethiopia.

Where is the money to facilitate share ownership by low income Ethiopians’ come from? I respectfully request readers to add more sources of funds

“If there is a will there is a way!”

We can examine the following sources of funds as stand alone or in conjunction:

  1. a) Affirmative action: If you decide to privatize, example 49pc, outright decide nine per cent of the shares shall be granted to low income households represented by Yegna Investment . This is the only chance poor Ethiopians will get to own prime property assets.
  2. b) Place a VAT or sustainability surcharge fee on each share sold and use the money to buy shares for our poor brothers and sisters. A 10pc fee on 49pc of the shares that may be privatized will allow low income Ethiopians to own 4.9pc of the companies being sold. This is much better than owning zero shares by our people!

c)World Bank’s IFC will welcome invitation to inject FDI and utilize one of its available products,whereby IFC is able to co-invest by matching Yegna Investment funds,  and purchase shares in privatized or other profitable Ethiopian companies ,with pre-set intent to transfer the shares to low income households, via a purchase transfer at future date, but IFC needs something to match.

  1. d) I am confident if this or similar plan is implemented and with your encouragement the top wealthiest ½pc of Ethiopian households (100,000 of them) will be happily willing  to each  lend Yegna Investment  250,000 or even  1 million birr or more, at bank saving book rate or lower. This could be facilitated by a bond sale/purchase that will be secured with the shares bought by Yegna Investments. 25-50 billion birr or more raised.
  2. e) A similar workable mechanism can also be devised to have tens of thousands willing and able Diaspora Ethiopians to participate and synergize the effort by lending money to Yegna Investment at bank saving account rate or lower also secured by the shares being bought by Yegna Investment. This can take place when diaspora members appearing in person (some have been away for many years) or through their power of attorney. Five to 10 billion birr or more raised
  3. f) National Bank can allow Ethiopian Banks to come together and based on capacity to lend limited amounts to Yegna investments, at their cost of money, secured by shares to be purchased. Five billion or more raised.
  4. g) Encourage our concessionary bilateral and multilateral lending partners to lend to Yegna Investment, help provide the principal loan and/ or subsidize the interest.
  5. h) Kivia and Zidisha are examples of Non-profit lenders who provide millions of dollars in low interest loans directly to lower income householdsor through micro finance agencies. In one loan to Yegna Investments they can help  millions of poor Ethiopians.

The funds are to be lent to Yegna Investments for the purpose of acquiring shares in profitable companies, such as banks, insurance companies, manufacturing entities, consumer product, cement companies etc. and possibly Ethiopian Airlines and Telecom.

The companies could be presently in operation and/or will operate in future.

Who are the shareholders?

Ten million Low income Ethiopian households of which 15pc-17pc are  urban and city dwellers.

Even if it is as little as 1 birr per year, it is still ownership of the nations’ destiny by our people. It supports the feeling, we are in this together. I estimate when fully utilized this activity can raise the standard of living of low income households by 20pc. The investment dividend earnings is  in addition to growth of income from  their daily labor  in factories or farms etc. Yegna Investment allows their money to work for them.

Why will local and foreign owned companies, etc. invite lower income Ethiopians represented by Yegna Investments as partners?

Affirmative action: assuming all other buying criteria equal, companies that partner with lower income Ethiopians will get preferred status in all purchases made by government.

Yegna Investments as an entity will promote “buy from yourself” marketing campaigns to enhance its investment and educates and informs the consumer public which brands and products on the market they own and benefit from .

Companies promote their business and products locally and in export markets with emphasis on their “social responsibility”. It does not get any better than this.

Please, if you and Council of Ministers and Regional   Presidents feel the submission has some merit, open the concept to parliament, intellectuals and public for comment/opinion and productive debate, and improvements will emerge that will enhance the method and support participatory decision making and ownership of the Yegna Investments undertaking.

The undertaking preferably is under a federal umbrella, but in my opinion our constitution allows regions the option to implement if the federal scope is found to be non-conducive!

Respectfully Submitted,



By Bisrat Alemayehu (bisrat.alemayehu@gmail.com)
Minnesota US

Published on Aug 04,2018 [ Vol 19 ,No 953]


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