Investment is one of the key sectors to which the Ethiopian government, investors and the public alike have attached special importance given that it is the engine of growth and development, a means to extricate oneself from poverty. It is for this precise reason that an investment policy, which is periodically revised, was issued, an autonomous investment agency was established and our diplomacy was re-oriented to focus on the economy. And when the investment is of the foreign variety, it requires special attention and prudent handling.

Notwithstanding the necessity and importance of encouraging and promoting foreign investment, there are at least five basic criteria which are critical in determining whether the current foreign investment in Ethiopia is healthy or unhealthy, genuine or speculative, profitable or loss making, developmental or parasitic.  

These are:
1. Does it create wealth?
2. Does it cause transfer of technology?
3. Does it foster human resource development?
4. Does it abide by the constitution and laws of the land?
5. Does it have social benefits?

Prior to the advent of the ruling EPRDF, these criteria were more or less fulfilled during the imperial era, a period which saw the flourishing of private investment.

Although Italians, Greeks, Armenians, Arabs, Indians, the British, and the French invested modest sums during this period, they abided by the laws and rules existing then. Ethiopians used to learn from the technological and managerial knowhow they brought with them. Several persons who were trained by them became successful businessmen. They played their role in creating wealth. And their contribution in the development and expansion of education, sports and a modern culture had a positive societal impact.

Ever since the beginning of EPRDF rule, investment has been given special attention that resulted in the issuance of an investment policy which provided for an incentive package and the establishment of a government agency which oversaw it. Shortly afterwards, the private sector began to flock to this sector, including overseas investors from India, China and other countries. However, the major foreign investment in Ethiopia is that of the Ethiopian-born Saudi tycoon Sheik Mohammad Hassein Al-Amoudi.

The Sheikh has invested billions of birr in such diverse sectors as agriculture, industry, mining, transport, hotel and tourism, import and export etc; his investment projects have been granted several tracts of land measuring millions of square meters.   

Is this investment creating wealth? Is it transferring technology? Is it contributing to the development of the country's human resource? Is it carried out in a manner which fully complies with the law? Is it delivering social benefits? The answer to these questions is in the negative.

Let alone creating wealth or becoming profitable, the investment is in fact hemorrhaging wealth. The people of Ethiopia seem to be condemned to see incompleted or mismanaged projects here and there rather than witness completed and well-run projects. And those projects which were said to have been completed, such as the Sheraton Addis, have still to be fully operational. There are even reports that the hotel is on the brink of losing the right to continue operating under the Sheraton brand due to outstanding debts and non-compliance with certain requirements.

On its part, the construction arm of the investment is saddled with various problems, leave alone create wealth. The construction of roads it has undertaken have practically ground to a halt. It has been blacklisted for supplying sub-standard asphalt. It wholly outsourcers its own construction projects. Its own construction company is mired in debt up to its eyeballs. Employees' salaries are not paid on time. Projects are forgotten. Machineries are left idle. An investment which was touted to create wealth is eating up wealth and being bailed out by cash injection from abroad.

As regards technology transfer, except in a few areas, the investment's performance leaves much to be desired. High-tech machineries that were acquired at high cost are either sitting idle or rotting. It is even unable to make proper use of household technology products like personal computers.

On the human resource development front also the investment has been found to be wanting. Possessing the highest university degree or an extensive work experience or competence or diligence is not rewardable. What matters more is the possession of personal qualities like an alluring character or physique, blind loyalty, sycophancy etc. It is the rewarding of such persons rather than those who deserve it which has led to the wastage and not development of human resource.

The investment does not also have a good reputation for respecting the laws of the land. Contracts entered with the investment agency and land administration department are not honored. Bank loans are not repaid on time. Rather than getting things done in a straight forward manner, emphasis is given to using such unethical means as carrying favour with government officials by covering their personal expenses, lavishing gifts on them and the like.

Our hope that we would benefit from best practices in terms of management style as well as the culture of corporate responsibility and respect for the law that the investment would bring in from overseas has turned out to be a pipe dream.

The investment's track record in promoting and respecting our culture and traditions, in creating socially beneficial values is poor. It encourages perfidy, sycophancy, dependency, enviousness, rumour-mongering and punishes hard work, honesty and integrity. Donations which are pledged with much fanfare are not honored, employees are not paid their salaries on time, banks cry out for the repayment of huge sums of loans, companies which have leased machineries plead for payment of the rent they are owed. All this demonstrates that the investment has not benefitted the public as it is claimed to have done.

 So, what is the solution? It is to adopt a three-pronged approach
One: Investor- related measures
The investor should do as we have exhaustively addressed previously in a 7-point proposal, there is no need to repeat it here.
Two: Government-related measures.

The main objective of the measures that the government must take is to provide assistance and encourage reform. This needs to be complimented by monitory and follow-up activities aimed at ensuring that the investor complies with the laws and traditions of the country as well as the commitments he has entered into. In particular, it must make it clear that no one is above the law and that acts of violence and intimidation will not be tolerated. This is a part of the actions that the government has to take.

Alongside this, it should devise a mechanism which ensures that government officials do not succumb to temptations that come their way by virtue of their office and do not fall foul of conflict of interest rules. In this regard it can increase their salaries as and when necessary so that they do not look for a "bailout" and avail them with free medical care.  

Three: Public-related measures
On its part the public needs to closely follow the events taking place around it and demonstrate that it is a force to be reckoned with. Especially, it must send a clear message that no matter what hardship the country and its citizens face, Ethiopia will never compromise it, dignity.

The problem is nationwide and as such must be promptly solved before it sets a bad precedent. By all standards the investment is no better than petty trading; it is not worth its glorified name!