EFFORT and The TPLF Business Empire
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 Tewolde Tedla
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
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
Guna Trade Services
Oromia Credit Bank
Adwa Flour Factory
Tikal Agri Tigrai
Alage Forest Products
Sebhat Nega PLC
Dima Honey Processing 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 net worth of the parastatals has quadrupled.