The Reporter (Addis Ababa)

2 August 2014

Ethiopia: Media Investment in Ethiopia At the Crossroads

As is the case with many other sectors, government presence is highly felt in the Ethiopian media industry. Particularly in the broadcasting media, the government seems to have unchallenged monopoly.

Of course, according to the latest broadcasting proclamation, the private sector is allowed to involve broadcasting. Some went on to join the broadcasting business in radio. But, for various reasons, there is no private television station in Ethiopia. Regulator's justification for not opening up television broadcasting varied over the years. A sample of this is one recently offered by the Speaker of the House of Peoples' Representatives (HPR), Abadula Gemeda. He said the area is way too sensitive and that one word may destroy the country. In tune with that, few of the private radio stations operating since 2007 are considered by many to be soft and not vocal enough on societal problems. And that left print media to do all bidding for the so-called hard-hitting societal issues. Indeed, the private newspapers and magazines are much better in opening spaces for such diverse views; but they too have their own weaknesses.

One of such weaknesses in the private print media is lack of investment. 23 years since private investment has been allowed in the media industry, the number of media investment is hardly encouraging. Big, strong and diverse media outlets are only the wishes of the highly increasing generation of readers. The media publications are only confined to the big cities and media viability is still a big problem. For Zewdineh Beyne (PhD), an attorney and consultant at law, even if the large part of the media activity is a government monopoly, he sees no problem with the current crops of government policies, strategies, programs, laws, and institutions governing the media industry in Ethiopia. He rather observes the main challenge is the always changing and unpredictable ways of enforcing these laws. "We have a very good legal framework that governs media activity. The policy direction is clear. However, the regulations and administrative procedures are not consistent. The rules and directives written in every office and by every committee hinder the enforcement of the laws and policies. In the absence of the administrative procedure act, there is a chance that the enabling subordinate legislations will further complicate the smooth implementation of media laws. That is why Ombudsman is facing difficulties in collecting reports on the implementation of access to information law from government organs," Zewdineh elaborates.

Zewdineh also observes issues of media investment from the context of realizing democratic, transparent and developmental government in transitional democracy of Ethiopia. "As opposed to well-developed countries where the private sector is dominant, in transitional democracies the involvement of the government in many sectors, media included, is very broad. Despite the government's active role, alternative sources of information are still encouraged to flourish in these countries. The free flow of information and open government is accelerated by multiple sources of information than the single source of information at the hands of the government. If we want to create an informed public that is closer to information, then we have to establish a system that attracts big and strong media," Zewdineh explains.

While noting that providing special assistance to the media in transitional countries is common, Zewdineh notes that the media industry is not getting any special assistance. "Different laws on investment do not provide special assistance or incentives to media activities even if such assistance is available to other sectors. Providing special assistance to an infant industry in developing countries like Ethiopia is necessary. Due to the sensitive nature of the media industry, profit is not the only driving factor for media activities. If we want to safeguard the public interest through the media industry, then supporting and providing assistance to the media industry by the government is mandatory," Zewdineh argues.

An investment consultant who requested anonymity that The Reporter approached believes that the investment risks which are not related with business itself are making investors not to be interested in the media industry in Ethiopia. Amongst these non-business risks she mentions political risk and investment taking as the most important ones. "Media investment will not bring profit in a short period of time by its nature. It is rather a long-term project. If you invest big, probably you may not expect your returns in ten years. Anything that creates instability to the business in the near future is a fear factor for investors. From my experience investors are not attracted to the industry in this country because of the policy changes. As the industry is sensitive for the government, it is more regulated than any other area," she reflects.

The investment expert is of the opinion that the issue of investment taking is the more complicated investment risk. She explains that investment taking or indirect taking is a phenomenon commonly related with fear of expropriation and nationalization. However, she reveals that it also happens when the business profitability is reduced by government regulation. "For different reasons the government may decide to fix the amount of shares for the private sector. In some countries the share of the private sector is fixed for security reasons. In some instances the cost of the printing paper may increase. All this will reduce the profit margin in the business. The private media is over-regulated in this country. So the investment risk is higher," she emphasizes. She also indicates that the difficulties in access to information discourages investors in the industry. According to the consultant, the issue of incorporation, registration, licensing and taxation issues make the establishment of media organization burdensome. She also identify the import-export regulation as another stumbling block for media investment as tariff and restrictions on paper, printing ink and machineries for media related business are not given any special consideration. Another area which is stressed by the investment consultant in relation to media investment in Ethiopia is the technical nature of the profession. She observes that quality control is the key to the success of every business. While admitting that objective criteria are available to check the quality of the products and services in other types of businesses, she contends that an ordinary investor cannot manage the quality control in the media industry. She further argues that even to delegate the job of management to the professionals in the media industry, the Ethiopian market does not satisfy potential clients. She indicates that media experts who proved their competence in the industry are rare on the market. She concludes that challenges in relation to the technical nature of the business may be considered as another justification for the lack of interest to invest in the media industry. Too much politics

For the government and the ruling party, the opposing political parties and third party independents, there is too much politics in the Ethiopian media industry, and only too little professionalism. However, their reasons for the politicization of the media are quite different.

Mushe Semu is a political figure and former Ethiopian Democratic Party President. He asserts that the attitude and desires of the ruling party is what caused the unnecessary too much politics in the media industry. "EPRDF wants developmental investors who teach and organize their clients in the line of thought designed by the ruling party and increase their consciousness in the media industry. Investors that I am familiar with are only interested to make profits rather than engaging in the teaching and mobilization roles. The government and the ruling party label the media industry as anti-government and enemy of the government. This alerts the investors that the media industry is not an ordinary business. No one would want to be the enemy of the movers and shakers of the counrty," Mushe argues.

For Mushe, it is the government propaganda that sells the idea that the media industry in Ethiopia is a political enterprise. "Journalism and the media industry is a profession. However, it is perceived as a political institution mainly because of the unhealthy relationship between the media and the government. The government considers the media as one of the opposition political parties. The media industry is not promoted as a normal investment area. The role of the media is not clear in our country. So how can it attract investment? An investor who is interested in the media industry should not only care about its investment but also should invest a large amount of money, time and labor to change the negative attitudes on the industry," Mushe explains.

Mushe also contends that EPRDF is not interested to see the media industry flourish as it will challenge the hegemonic aspirations of the front. "EPRDF puts a lot of barriers that effectively bar potential investors from engaging in the industry. Alternative big printing houses are not available. There are no big printing houses except Berhanena Selam Printing Press. The fixed cost required to establish a big printing house is high. Using economies of scale, the investor should publish many media outlets to get its returns. If there is a risk that the government may close down or confiscate your printing press, it is natural that investors will be hesitant to invest millions on such business. Independent institutions that facilitate access to information are not there. Freedom to movement and accessing government held information at both federal and regional level is restricted by the bureaucracy. The ruling party wants to be a hegemonic power. So it does not want to listen and see other alternative voices. Paralyzing the system and preventing investors is easy. But winning over other competing ideas in the free market of ideas is extremely difficult job. EPRDF is just opting for the easy way out," Mushe maintains.

As Mushe points out, this attitude of EPRDF led only investors with political agenda to invest in the media. The fact that they are taking risk because they have purposes beyond making profits like realizing democracy in the country, to assume state power or building a new order has its own danger for Mushe. He indicates that such media practitioners may not accept the moral and ethical requirements embedded in the profession wholeheartedly. "Balanced reporting, professionalism, independence, accuracy and credibility are basic requirements in the practice of journalism. One cannot expect these requirements to be fulfilled without first establishing free and independent media that the government cannot influence in any way," concludes Mushe.

EPRDF encounters this strand of argument in more detail in its policy and strategy documents and through its top officials. The ruling party believes that the developmental state ideology it adopted in 2006 accommodates diverse views while efforts are exerted in building a national consensus on basic values of the country. The EPRDF-led government believes that broad-based participation of citizens will facilitate developmental state unlike the otherwise widely believed position. While the government emphasizes that social development is essential for economic development, it recognizes the role of media in achieving the social development that would stamp out patronage and rent-seeking behavior in the public. It is the assessment of EPRDF that the great majority of the private press have the tendency of working against the law and the government. The front also accuses the private media of serving the illegal causes of some political parties. It is as well asserted that the private press is a forum for political activism aimed at overthrowing the government rather than serving the public as per the basic pillars of the profession. According to EPRDF, his basic characters of the private press prevent the media investment in Ethiopia. The ruling party has been promising to bring consensus with relevant stakeholders in the industry and take serious measures against the extremists to make way for investors in the industry. In the June 2014 issue of Zemen magazine, Redwan Hussien, head of the Government Communications Affairs Office with ministerial portfolio, argued that the private media is favoring change of the system than helping to rectify the weaknesses of the current government with constructive criticism. He also observes that the private media practitioners are acting as political activists rather than entertaining the agendas from all walks of life. He also indicated that the financial sources of most of the private presses are traced back to organs that these media institutions are serving to promote their agendas. For Redwan, as opposed to such a media culture in the private media which primarily aim to establish an elite-based democracy, the government is working to build a media culture that empowers the public. He also announced that the government has a plan to promote more professional and strong private media by offering training, enacting subordinate enabling legislation and providing special incentives for the industry.

This position has been echoed in the documents of the ruling party since 2001. In the 2007 document discussing struggles on building a democratic system and revolutionary democracy, EPRDF admits that the state or public media should not restrict itself in explaining government policies, programs and activities but it should include the public comments and serve as a medium for discussion on these issues. It is not clear whether EPRDF is recognizing merely the right of expression on behalf of the mass population or opening its door for all sorts of discussion to the extent of letting its decision-making process be influenced with the outcomes of these free discussions. Nonetheless, in practice, even sometimes due to legal limitations, let alone the state media, the private press is struggling to openly criticize the government and its policies and implementations. EPRDF's policy on media is heavily criticized. Practitioners of the media industry have accused the government on many fronts. The extremely suspicious and sensitive sense of the government towards strong criticism is allegedly taken as the main cause for its punitive approach towards the media. In principle, EPRDF accepts the positive roles and instrumentality of the media as a means for the public discussion and debate based on timely and accurate information on current affairs. In addition, EPRDF appreciates the pivotal roles of the media in inspiring the public for struggle on the country's direction of democracy, development and peace.

However, EPRDF not only see the huge benefits lie beneath the core essence of the media for its fundamental ideology, but also recognizes the threat it poses on the system. Particularly, EPRDF indicates the counter-productive role of the media in the multi-party system. EPRDF believes that the positions and stands of the media are very much related to its source of finance; and the business peoples with rent-seeking behavior are behind the media industry. For Nicole Stremlau, a researcher on the practice of media in Ethiopia, in theory, the EPRDF's vision of "revolutionary democracy" allows scope for criticism and an independent mass media, but not in practice. Elite opposition voices and parties are tolerated as long as they are not a serious distraction. The development project, according to the late Prime Minister Meles Zenawi, would be achieved faster and have greater resonance if it emerges from free debate and dialogue. In this context, press freedoms serve part of a utilitarian policy rather than a firm belief; they are a privilege for those involved in the press and a tool to be exploited when beneficial for consolidating power and making better policies. Debate, it is argued by Stremlau, could then make governance more effective; but the EPRDF expects to confine such discussion to issues of development, rather than focus on the constitution, issues of succession, federalism, and land reform.

As argued, for instance, by Terje S. Skjerdal, in his research entitled 'Development Journalism Revived: The Case of Ethiopia', the government asserts that the media should focus on positive development efforts, educating people, and generally supporting the national interest. However, his study has shown that it also means neglecting critical stories, avoiding oppositional voices, and hiding information from the public.

In "Developmental States in the New Millennium: Concepts and Challenges for a New Aid Agenda," Fritz and Menocal also observed that matching a developmental with a democratic state is challenging as 'democracy has an inherent tendency to disperse power and slow down decision-making processes, and it also makes the state less autonomous and less insulated from societal demands...thus slowing down the process of building of a developmental state'.

Despite this well recognized challenge, the development-oriented ideology of the ruling party pledges to accommodate democracy. If a consensus or deliberative democracy is preferred to electoral or illiberal democracy, then the media industry should invite investors who can take it one step further in its slowly moving progress. Even if the efforts to change its status depend on the coordinated efforts of all stakeholders, the first initiative should come from the government in terms of economic, legal, administrative, political measures boosting the revival of the neglected industry for investment.

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