Importers across the board continue to complain about the shortage of foreign exchange provisions to open letters of credit, gossip observed.
Tell that to the bankers. Apprehensive of retaliations from authorities at the central bank, most chiefs of commercial banks swear that there is no problem in their foreign currency accounts. This is, as such, the official narrative, and any banker who dares to contest this is told to face the wrath of the governor, as a consequence, gossip claims.
Behind closed doors meetings, up atLorenzo Te'azaz Road, however, the story is a little more frank, claims gossip. Industry Minister Mekonnen Manyazewal, the lone non-party senior government official and lead author of the Growth & Transformation Plan (GTP), championed last week the cause of private industrialists over their foreign exchange debacle.
A high level export committee meeting was held on Tuesday, December 18, 2012, chaired by Prime Minister Hailemariam Desalegn, or Haile, gossip disclosed. The meeting was held within an atmosphere of dissatisfaction, with the results for the second quarter being not quite as rosy as the projections made on proceedings from exports. For an administration that has too many public projects in the pipeline, with almost all requiring a minimum of half their project costs in foreign currency, a ballooning trade deficit does indeed spell trouble.
Coffee exporters, who bring to the national coffer a large chunk of foreign currency, are not doing well, claims gossip. This is attributed to hiked-up prices in the local market, which offer higher rates than international markets, and thus little incentive for exporters to ship the nation's historical cash crop out to the world.
Another sector, identified at the meeting for performing worse than expected, is the industrial sector, gossip disclosed. They owe their poor performance to largely two factors; the logistics nightmare in the Ethiopia and Djibouti corridor, and availability of foreign exchange to open letters of credit and the time it takes to get approvals when there is one.
The view of Teklewold Atnafu, the longest serving governor of the central bank, was different, however. He produced, at the meeting, a list of importers provided with permits to open letters of credit and the amount of foreign currency they were permitted to buy, in order to finance their imports. He was, nonetheless, confronted by Mekonnen, who pressed to see the foreign exchange stock available now, hoping that he would have answers to the many industrialists knocking at his doors, onMarshal Tito Road, daily, claims gossip.
There was little the Prime Minister could do, in the face of his senior officials squabbling over an issue that could simply have been verified as fact, claims gossip. Industry observers see that the problem is not so much to do with a depleting forex stock, but rather a fretful Governor, who might see his accomplishments with a report from the IMF, that acknowledges sufficient reserves to the grace of macroeconomic stability, claims gossip.
The alarming nature of the issue led Haile to call a tripartite meeting between government officials, bankers and importers, perhaps to be held next week, gossip disclosed.
Yet, Haile will see a little more change in his immediate environment, gossip disclosed. Following the promotion of Muktar Kedir, as a minister of Civil Service, in the rank of deputy prime minister, the position he relinquished, atLorenzo Te'azaz Road, there remains a gap to fill. Not for so long, though, according to gossip.
Unlike in the past, however, the administration is now thinking to split this rather powerful office into two; head of the Prime Minister's Office and chief of Cabinet Affairs, gossip disclosed.
A chief legal advisor at the Ethiopian Revenues & Customs Authority (ERCA) is being considered to take up the position as head of cabinet affairs office, while one of the deputy presidents in the southern regional state is thought to have a good chance of assuming the role of chief of staff to the Prime Minister, claims gossip.
Gossip attributes the creation of all these positions closer to the Prime Minister to a strong desire, among a certain group in the Revolutionary Democratic camp (the veterans so to speak), to see the most powerful executive office in the nation evolve into an institution of its own. A lesson they think they ought to draw from failures of the late Prime Minister Meles Zenawi, gossip disclosed.