EFFORT and The TPLF Business Empire

Ginbot 7 Report

Originally Posted July 13, 2009

The Ethiopian economy is controlled by two large interlocking conglomerates: The Endowment Fund For The Rehabilitation of Tigrai (EFFORT) and Mohamed International Development Research Organization Companies (MIDROC), the Saudi billionaire, Sheikh Mohamed Al-Amoudi’s vast business enterprise.

However, the focus of this report is on EFFORT, the Tigrai People’s Liberation Front’s (TPLF) economic empire, that has monopolized the private sector of the Ethiopian economy to the extent never seen anywhere in the African continent.

The seeds for the thriving TPLF business empire were planted back in 1978 when the Relief Society of Tigrai (REST), the financial umbrella of the rebel movement in Northern Ethiopia was created as an NGO. Though REST was a relief organization, a TPLF Central Committee member headed it; and it collected donations from the international community and channeled it to the TPLF, playing a key role in the survival and ultimate victory of the TPLF over the Marxist military Derg.

After the TPLF came to power in 1991, REST was formally registered with the Ethiopian government’s Relief & Rehabilitation Commission as an “NGO”. As the financial backbone of the TPLF, REST continued enjoying state protection; and the restructured REST emerged as the richest “NGO” in the African continent. In the summer of 1995, about four years after the rebel group took control of power in Ethiopia, the TPLF established a stronger peer for REST – the Endowment Fund for the Rehabilitation of Tigrai (EFFORT). Business documents suggest that EFFORT started its business venture with a lofty investment volume of about 2.7 billion birr — then just under U.S. $1 billion.

The predominance of party-owned companies, referred to as parastatals, that control the strategic income generating sectors such as agriculture, industry, banking, mining, import-export, transport, construction, insurance, and communications is bitterly resented by private entrepreneurs as well as the general population which views it as a deliberate ethnic based and systemic economic exploitation. Since 1995, the TPLF has been using the parastatals under EFFORT as a “cash cow” to accumulate immense amounts of wealth to pursue its ethnically motivated political and economic domination of Ethiopia.

Although privatization was initiated early on and a competitive policy and trade practice commissions were developed, they did not have a significant impact, since the process was discriminatory and highly politicized — plagued with nepotism, insider information, and other political considerations. In its most egregious form, for example, the entire process of modernizing and increasing the role of the private sector is delayed to this day until the weak parastatals are able to compete and become major players especially in the lucrative IT and Telecommunications sector.

The World Bank, many internal and external observers, as well as, business people have noted that party-owned enterprises enjoy preferential access to contracts, capital, physical infrastructure and administrative services, tax breaks and other politically motivated and privileged supports.

The business community complains that the system of taxation is aggressive and targets those who do not have political connection, or those who are not linked to party parastatals. Some business people have complained that heavy taxes have been used as a tactic of pressurizing and settling scores on those suspected of supporting the opposition.

For example, the Commercial Bank of Ethiopia (CBE) the dominant market player, faced financial meltdown a few years ago as its level of non-performing loans (NPLs) passed the 50% mark, due to unregulated lending to state-owned companies, parastatals, and to private individuals with political or personal connections with bank officials.

The parastatals also have an adverse impact on the investment climate and the economic well being of a large segment of the society. First of all, they deliberately give privileged and monopolistic economic power to a minority segment of the society to control huge amounts of assets by TPLF- the ruling party. Secondly, they create barriers to new market entrants, especially for those who refuse to enter into some kind of joint venture or cooperative activity with the parastatals. Thirdly, they create an endemic culture of obscene corruption by leveraging state resources and unfair trade practices through granting privileged access to land and information regarding procurement. Moreover, since these parastatals operate across various sectors, some have real strategic influence on other sectors [transport sector] and high demand commodities [fertilizer].

The TPLF has clearly been engaged in massive corruption and unethical business practices by national or international business rules and practices since its rise to power in Ethiopia. As a ruling party, it not only owns strategic sectors of the economy and engages in commercial and trading activities, it also puts competing private sectors in a hopeless no-win situation. This preponderant economic dominance is also used as a political weapon to harass, incarcerate, dominate, weaken and control opposition forces in order to stay in power indefinitely.

Under these untenable circumstances, it is a moral imperative for the Ethiopian people to continue the struggle against the total economic and political domination of the Tigrai ethnic minority regime, that hails from one of the poorest regions of Ethiopia and produces no exportable commodity, yet, parasitically exploits the natural resources of the country for its sole benefit.

The economic hegemony of the TPLF coupled with its gross mismanagement of the nation’s resources and the massive systemic corruption that has infected the body politic of the nation is the ticking time bomb that may very well destroy the fabric of the Ethiopian society.

Full List of TPLF Companies Under EFFORT

Companies with investment capital of < 20,000,000 Million Ethiopian Birr

Company Name	Year Est.(EC)	Capital	HQ	Board Chairman
Selam Transport	1995	10,000000 Birr	Mekele	Arkebe Ekubay
Segel Construction	1995	10,000,000 Birr	Mekele	Araya Zerihun
Mega Net Corp	1995	10,000,000 Birr	Mekele	Alemseged Gebreamlak
Hitech Park Axion Association	1995	10,000,000 Birr	Mekele	Shimelis Kinde
Fana Democracy plc	1995	6,000,000 Birr	Mekele	Negash Sahle
Express Transit	1995	10,000,000 Birr	Mekele	G/selassie Gidey
Ethio Rental Axion Association	1995	10,000,000 Birr	Mekele	Atkilit Kiros
Dilate Brewery	1995	15,000,000 Birr	Mekele	Kahsay TewoldeTedla
Dessalegn Caterinary	1995	15,000,000 Birr	Mekele	Dr, Maru Erdaw
Addis Consultancy House	1995	10,000,000 Birr	Mekele	Sibhat Nega
Birhane Building Construction	1995	10,000,000 Birr	Mekele	Bereket Mazengiya
Total Capital		116, 000,000 birr

Companies with investment capital between 20-49 Million Ethiopian Birr

Company Name	Year Est (EC)	Capital	HQ	Board Chairman
Sheba Tannery Factory Axion Assoc.	1995	40,000,000 Birr	Wukro	Abadi Zemu
Meskerem Investment	1995	40,000,000 Birr	Axum	Tewodros Ayes Tesfaye
Africa Insurance Axion Association	1995	30,000,000 Birr	A.Ababa	Yohannes Ekubay
Global Auto Sparepart	1995	26,000,000 Birr	A.Ababa	Teklebirhan Habtu
Experience Ethiopia Travel	1995	26,000,000 Birr	Mekele	Tony Hiki
Addis Engineering Consultancy	1995	25,000,000 Birr	A.Ababa	Arkebe Ekubay
Hiwot Agriculture Mechanization	1995	25,000,000 Birr	Mekele	Yohannes Kidane
Berhe Chemical Axion	1995	25,000,000 Birr	Mekele	Abadi Zemu
Rahwa Yebegina Fiyel Export	1995	25,000,000 Birr	Mekele	Yassin Abdurahman
Star Pharmaceuticals	1995	25,000,000 Birr	Mekele	Arkebe Ekubay
Tesfa Livestock	1995	20,000,000 Birr	Mekele	Yohannes Kidane
Total Capital		307,000,000 Birr

Companies with a paid-up capital of >50.000.000  Million Ethiopian Birr

Company Name	Year Est.(EC)	Capital	HQ	Board Chairman
Almedan Garment Factory	1995	660,000,000 Birr	Mekele	Abadi Zemu
Mesfin Industrial Company	1995	500,000,000 Birr	Mekele	Arkebe Ekubay
Mesob Cement Factory	1995	240,000,000 Birr	Mekele	Abadi Zemu
Almeda Textile Factory	1995	180,000,000 Birr	Mekele	Abadi Zemu
Sur Construction	1995	150,000,000 Birr	A.Ababa	Arkebe Ekubay
Trans Ethiopia	1995	100,000,000 Birr	Mekele	Shimelis Kinde
Dedebit Saving & Loan	1995	60,000,000 Birr	Mekele	Atkilit Kiros
Ezana Mining Development	1995	55,000,000 Birr	A.Ababa	Tewodros H. Berhe
Addis Pharmaceuticals Production	1995	53,000,000 Birr	A.Ababa	Abadi Zemu
Tana Trading House Axion Association	1995	50,000,000 Birr	A.Ababa	Sibhat Nega
Total Capital		1,868,000,000 Birr

Companies that did not make their paid-up capital public

Ambassel Commerce	Dinsho Share Company	Tigrai Tagai Association	Brook Chemical Share Company
Dashen Beer Factory	Express Ethio Travel Service	Tigrai Development PLC	Computer Networking Technology
Amhara Meleso MaquaQuam	Berhan Building Construction	Star Pharmaceutical Importers	National Electromechanical
Saba Emnebered	Guna Trade Services	Biftu Dinsho	Oromia Credit Bank
Adwa Flour Factory	Wendo Trading	Shala Advertisement	National Geo-Textile
Trans Ethiopia	Tikal Agri Tigrai	Wegagen Bank	Alage Forest Products
Sebhat Nega PLC	Addis Transport	Walta Industry	Martha poultry
Dima Honey Processinf plant	Zeleke Agricultural Mechanization PLC	Tikur Abbay Transport	Beruk Tesfa Plastic Factory
Aberdele Animal Export Company	Maichew Particle Board

These 66 companies are owned and managed by ethnic Tigreans
*Some Board Chairmen might have moved within the parastatals
*The amount shown on the tables above are initial start up capitals. The total networth of the parastatals has quadrupled.