Shipping Profits Not Whole Story

Dear Editors,

I read the cover story in last week's issue headlined, "Profit Bonanza" [Volume 10 Number 484, August 9, 2009]; in particular, I read the story about the profit reportedly made by the Ethiopian Shipping Lines (ESL) with great interest. It is always good to know that public-owned enterprises generate profits; however, that usually does not show the whole picture.

After being granted a monopoly by the government several years back, it has been our only choice for shipments from around the world. Nevertheless, ESL does not have enough fleets to service the Ethiopian market. Even last week, there were many tonnes of goods lying around ports waiting for vessels.

There are goods at the Mumbai Port, ESL is unable to finish loading; I am afraid, these pending cargoes will remain stranded up until late September. This will cost us [the importers] substantially in the form of amendments to the letters of credits, not to mention additional costs incurred due to currency devaluation. It is also raining heavily in Mumbai, due to the monsoon season, where goods are bound to be damaged if they are not loaded on time.

With what ESL earned in profit last year, we lost plenty in many other ways.

Million D.
Addis Abeba

Slow Monopoly, Innovative Airline in Different Leagues

Dear Editors,

I read the various articles related to your cover story headlined, "Profit Bonanza" [Volume 10, Number 484, August 9, 2009]. I came to learn that it has been a year of bonanza for the state enterprises such as the Ethiopian Airlines (ET), the Ethiopian Shipping Lines (ESL), and the Ethiopian Telecommunications Corporation (ETC), which have announced what they call, "a remarkable record of high financial performance".

I do not have any dismay with ET and ESL. They have always made us proud in the international arena. Particularly, the Ethiopian Airlines with its talented Chief Executive Officer (CEO), Girma Wake, contributes much to Ethiopia's economy. One online magazine described ET as having pioneered a "mighty air bridge to Africa".

Both enterprises deserve the kind of coverage on your newspaper.

However, my disappointment is with the coverage of ETC. I do not think ETC's profit bonanza is newsworthy because it is the sole provider of telecom service in the country. ETC can always be awash with profit without facing trying times because we, the subscribers, have no other choice.

I would have no contention with its monopoly status had ETC provided its subscribers with reliable and efficient services.

It is obvious that the mobile service is deteriorating almost on a daily basis. The Internet and e-mail services are equally pathetic. Instead of trying to belatedly introduce us to the newest technologies, ETC should fix and improve existing basic services. The Corporation has to effectively use its "ought-to-have-profits" and live up to the expectations of its helpless subscribers.

I am also frustrated with the media's failure to challenge the claims made by the Corporation; it should have counter-checked the alleged improvements. Sadly, your coverage of ETC looks like an advertisement or simply copying the press release provided to you from the ETC public relations department. The news does not seem credible.

Sileshi Yilma

Addis Abeba

Tax Authority Employees Need Training, Accountability

Dear Editors,

I was on holiday in Addis Abeba a couple of months ago. The whole issue among the audit and accounting professionals community was the shocking tax levied on fat-cat businesses.

As I was an auditor myself, I had informal discussions with my friends in the profession before I left Addis. The manner in which the Revenues and Customs Authority (RCuA) computed the tax is disappointing. In some cases, the computation resulted from plain and simple mistakes of the tax office staff, and in other cases it was contrary to income tax proclamation issued in 2002, as well as accounting standards and practices.

For instance, provision for stock obsolescence is not acceptable as an expense for tax purpose but for financial reporting purpose, adequate provision should be held. For tax computation purposes, accountants or auditors add this expense back on net profit and compute tax; this expense is effectively excluded.

In the recent investigation, the tax office staff hastily computed tax again on this item without going through detailed tax computation of the external audits.

With another company, the tax office staff rejected goods in transit as part of opening stock because they did not have knowledge of the subject.

I could carry on listing several cases of simple mistakes the tax employees made which wasted the precious time of businesspeople, auditors, accountants and the tax office itself. The Authority should provide staff with better training, and apologize to the people affected due to such simple mistakes.

The other major issue of dispute is the cost of imported items.

The custom office computes duties on imported items based on valuation, instead of invoices presented by importers as the office deems the imports are under-invoiced. When we come to profit tax, the proclamation prescribes to value stock according to GAAP. To apply GAAP, stock valuation needs adequate evidence, which is the invoice. There is no reason for tax authorities, accountants and auditors to compute profit tax using anything other than the appropriate tax proclamation.

The question should be whether or not the taxpayers have their books computed according to the tax proclamation. If they do, the tax office has no right to extend its authority beyond the limit. Otherwise, it is better to challenge the authorities through a court of law.

If the tax authorities insist on using the custom's valuation, the value of imported items will be high for tax purpose and subsequently less on profit tax. As you have rightly pointed out in your editorial headlined, "Ironically, Legislative Battle Over Tax Issues Have Long Been Lost" [Volume 10, Number 484, August 9, 2009], the tax authorities should get ready to refund any excess tax paid.

Dagmawi

Defence Forces  Should Live up to Calling
 

Dear Editors,
 

I agree whole heartedly with Lulit Amdemariam’s column headlined, “The Uniform” [Volume 10, Number 481, July 19, 2009].
 

Wearing a uniform properly is the symbol of soldiers. For members of both police and defence forces, it earns them respect [as individuals], as well as their institutions. Previously, we saw disciplined soldiers under the uniform and committed to their missions. As boys, we used to look up to them and wanted to follow in their footsteps.

Sadly, I see some of the men in uniform engaged in unethical activities unbecoming of the uniform. I would like to add my own observation that there are several khat joints around Sidst Kilo district, Addis Abeba, where I see several regulars in their uniforms. A few of them were seen drunk later on at night picking fights with civilians, the very people whom they had sworn to protect from danger.
 

We, Ethiopians, are proud of our defence and police forces and take them as a role model in ethics; none of their members should tarnish the respectable image of their institutions. Those in leadership of these institutions should also supervise and enforce discipline on their subordinates and take measure when they conduct themselves unethically.

Haileyesus Kebede

“Democratic Space” Forum Propaganda

Dear Editors,

Your outfit, considered independent media, could not draw the line calling a spade a spade; as far as the regime in Ethiopia is concerned. When you get in the media business, especially in Africa, you should know what you are getting yourself in to. It is not to make friends in a country of rampant corruption and authoritarianism.

I am puzzled by your gossip section [Volume 10, Number 478, June 28, 2009] on the narrowing of democratic space and the new US ambassador’s possible approach with the regime. It seems your media is reduced to parroting the regime’s propaganda or the foreign community’s desire, rather than digging deeper as a journalist, admittedly with lots of risk.

When the regime comes up with the propaganda forum of: “the narrowing and widening of democratic space” in the only television station, controlled by the regime, in a country of over 70 million people; instead of the forum, the news should have been the regime’s sole ownership of the media and the democratic space.

It is embarrassing to claim you are a media; and conveniently leave out the most important thing we need an independent media for. 

I watched the video and could not help the two cadres couched into a make believe forum and some of the politicians masquerading as opposition. A simple investigation of these individuals will give us the window of the cadre’s world.

We know how the regime operates in and out. What we need independent media for is to tell us what they do in the name of governance; instead, you are playing the role they wanted you to play. Step up to the plate and be a journalist.

Addisu Bekele

Radio is Relevant

Dear editors,

Tess Debalk, in his letter to the editor headlined, “Focus on Relevant Problems” makes a disjointed and contradictory argument to assert that an earlier column by Lulit Amdemariam headlined, “Radio Insensitivity”, is irrelevant.

There really is no ground for him to play the ultimate judge and declare what is relevant or not to our country and readers of Fortune. Lulit’s column was not supposed to be a too sober, dry and didactic lecture on moral issues. The way she approaches “Life Matters”, most of the time, uses a touch of sarcasm while at the same time not losing sight of the core issue at hand.

That is exactly what readers, including myself, like to read in her column. I reiterate that concern about lyrics of songs aired on FM stations is very legitimate. Music does have a powerful influence on people, even more so on the trendy and music fad generation of our times.

Tess Debalk’s categorical criticism, though he is rightfully entitled to his own views, is unfounded.

Abush Zenagabriel

Is Fortune's Case Really Historic?

Dear Editors,
 

Your news story headlined, "Fortune Wins Landmark Case against Ayat" [Volume 10, No. 476, June 14, 2009] gives extensive coverage to the court battle your publisher has fought against Ayat Share Company.

Read More

Pankhurst Family Distances Itself from Memorial Institute

Dear Editors,

My attention has been drawn to an advertisement by the Sylvia Pankhurst Education and Training Institute entitled Sylvia Pankhurst Memorial Institute, on page 11 of your issue of June 7, 2009 [Volume 10 Number 475].
 

Though I have given my approval to naming a school after my mother, I have not been asked, and have not agreed to the use of my mother's name for the said Sylvia Pankhurst Education and Training Institute. Neither I, nor members of my family, hold any position or have any affiliation with the Institute share company.

Thank you

Richard Pankhurst (Professor)

A Case for Telecom Privatization

Dear Editors,
 

I read the news headlined, “Amharic Office Word Application Software Almost Complete” [Volume 10, Number 473, May 24, 2009]. It was great to know that the age old language of Ethiopia is entering the information age. My appreciation to the three organizations: Microsoft Inc., the Ethiopian Information Communications Technology Development Agency (EICTDA) and the Addis Abeba University (AAU).
 

However, all this effort is of no use as long as a single monopoly operator owns the generation and transmission of information and networks without the involvement of the private sector. As a result of such a policy, Ethiopia, with telecommunications services for over a century, is now known as a prime example of least developed countries (LDCs) in the information communications technology sector.
 

The private sector is excluded from owning a network, and small and medium enterprises, which could provide local language based content services, are absent from the scene. Perhaps Microsoft Inc. and the other influential organizations should clearly take a stand against the disabling policy on telecom and ICT monopoly in Ethiopia.

Only then can we talk and expect innovative and sustainable development through ICT.   

Asteway  Abebe
Nairobia

Is AU's Priority Cash or Development?

Dear Editors,

When I was covering the 4th African Health Ministers Conference for my government earlier this month, I was delighted to meet African officials in large numbers for the first time. I felt blessed for being assigned to Addis Abeba, as my first African posting. In naivety, I used to think Africa was as homogenous as are most European countries. I was fortunate to learn that the diversity is immense, and incredible.

Read More

Ethiopian Journalists Must Support Each Other

Dear Editor
 

I read the commentary by Lulit Amdemariam headlined, “Ethiopian Journalism” [Volume10, Number 473, May 24, 2009]. It was a timely and fascinating piece.

Most media houses usually ignore such indispensable issues. Journalists in our country are seen complaining about their profession only when they are imprisoned, charges are pressed or when a new media law is imposed on them.

Read More

Textile Labour Union Needs Reality Check

Dear Editor
 

I was amazed to read a story headlined, "Local Textile Labour Case May Go International" [Volume 10, Number 470, May 3, 2009]. This story says a local employer and union's case may go international because the case was not getting resolved here in Ethiopia.
 

I cannot believe the union chose this particular time to take it that far. Its leaders are thinking about getting in touch with the employer's clients through the International Conference of Free Trade Unions (ICFTU) in order to urge them not to buy the product from the local factory.
 

What are they thinking? Where have they come from? Do they live in the same world we live in? Do they follow the news on what is going on around the world, that countries are doing all they could to make it through this turbulent times? Have they heard stories of employees losing their jobs, in millions, and companies getting bankrupt? Do they know that employers and employees are working together to avoid bankruptcy of their companies so employees have job security (even on a concession basis) during these trying times?
 

Besides, when they say they will contact the exporter's clients and ask them not to buy the product, have they not heard about the foreign exchange crunch this country is facing?
 

Maybe they were not aware that the products exported by individual companies do bring back the hard currency we all (as a country) depend on. I suggest they should get a reality check; they should also be thankful that their members do have jobs during these tough times while millions are desperately looking for one.
 

Their timing is so bad that instead of taking their case to international level, they should rather focus on increasing productivity. Our work attitude should change too. Working together with management, we should find a way we could be more a productive workforce.
 

Our industrial production output is too low, even when compared to other Third World countries.

We should keep in mind that our industries, all imported machineries purchased with foreign exchange, are established after consuming huge investment capital. If the exported products were not competitive enough, those industries could get bankrupt and close their doors with loss of jobs as avoidable consequences. It is in all our interest to see the success of these companies.

We should also be careful not to send the wrong signal to prospective investors, both domestic and foreign.

Ayenew Awole