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Axumezana
Senior Member
Posts: 13223
Joined: 27 Jan 2020, 23:15

The Oromia government and corruption in the cement industry!

Post by Axumezana » 10 Aug 2022, 00:29

Currently it is hard to find cement at retail shops , and if you are able to find it is at expensive price( more than Birr 1500 per quintal , which is three times higher than the price cement factories sell to distributers). Why is the retail price exceptionally high?

- Demand is higher than supply as all cement factories are producing at significantly lower than their capacity due to foreign currency shortages, power related issues , peace and security that affects supply of raw materials, involvement of uncessary layers of government organized actors that control the row materia supply and make it expensive & inefficient to source etc.

- Distrubition controlled by Oromia government directly or indirectly (by family members of the higher officials in the Oromia government). To get one truck of cement( 400 quintals) , those individuals( Oromia prosperity cadres) that are given permission to distribute cement must pay Birr 100,000 per truck to Oromia government officials /family members , that means Birr 250 per quintal is paid for Oromia officials/family members )
- Thier is also corruption within the management of cement factories
- The distributer ( prosperity party cadres) sells the cement ( አየር፥ በአየር) to retail shops or constructors at more than Birr 1000 per quintal)

- At last the retailer sells it at more than Birr 1500 per quintal( mostly in the informal ( አየር፥ በአየር) market. In most cases retail shops are out of stock and are idle or have closed their shops

Impact on the Economy

The Ethiopian construction sector has currently stagnated due to unavailability and high price of cement with so many construction workers facing unemployment and economic difficulty. At the same time Oromia government officials/ their families and cement factories management are making millions at the cost of the people.

Immediate actions from the government

- Support the cement factories to produce at thier maximum capacity by providing required foreign currency, reduce uncessary costs and inefficiencies on the raw material supply chain. It is obvious that the Oromia government officials who are benefiting because of shortage of cement will sabotage efforts by cement factories to increase production.
- Clean the Oromia government from corruption ( as the power base of PM Abiy, the Oromia government has to be a model for corruption free , efficient and effective service). If Oromia government is allowed to contuinue to be the breeding ground for hyper corruption, the Prosperity Party cannot fight corruption and it shall fail.
- Giving distrubition licences to party cadres is discriminative and also fuels corruption and the informal( አየር፥ በአየር፥ ) market.

- Attract foreign direct investment on the cement sector
- Insentivise local investors to invest

ጀሮ፥ ያለው፥ ይስማ፥ ሙስናን፥ እሽሩሩ፥ እያሉ፥ አገር፥ አይበለጽግም፥
ሙስና፥ ባለስልጣናትን/መሪዎችን፥ ያሳውራል፥ እውር፥ ደግሞ፥ ሕዝቡን፥ ከመራ፥ ተያይዞ፥ ገደል፥ ነው።