The incumbent’s efforts in countering money laundering, hampering black market spots and issuing directives as well assigning capable human capital to the leadership, has paved the way to minimizing the outflow of foreign currency.
However, experts still call on the pertinent stakeholders and State to strengthen efforts, citing the threat it poses to the ongoing national reforms. According to the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), Ethiopia’s efforts to combat money laundering and terrorist financing are relatively recent phenomena.
Though a first comprehensive law was adopted in 2009 (and substantially revised in 2013), the implementation of a preventive system for money laundering and terrorist financing was started in 2012.
Where is the source of this corrupted money? And What solutions should be carried out to curb the problem? Messay Mulugeta (PhD), Associate Professor at Addis Ababa University College of Development Studies, noted that the source for such financial eliciting is the outcome of an ill-practice which once was taken for granted in the public, accompanied with the business communities who had been harbored under the corrupted politicians.
According to him, political position had not only been the sources of power but also wealth which drove the nation into illegal transaction, illegal import-export flow and wide range of contraband. “It is important to acknowledge the fact that money laundering is a crime like other crimes, and therefore it affects all of us. The consequences of crime, including money laundering, are damaging for business, development, and the general rule of law.
And once a country reaches a point of no return in this regard, it could ruin its stability.” As to him, the efforts to put in place rule of law are commendable, but the magnitude and swiftness should be done in line with the threat this act could pose in all walk of life. “Following the reform, a few who are discontented with it are putting their hands in any form to impede its progress.” he noted.
Ethiopia is found in the new chapter of reform that is hailed by many regional and international communities, but the pseudopolitical system actors who had fully controlled the power for about three decades are posing danger in injecting corrupted money in money laundering acts that could lead to instability. and endangering the reform.
Responding how Ethiopia should deal with the matter, Messay reiterated that it is matter of national urgency, mentioning the lurking of illegal arms as a showcase of the matter. He recommended Ethiopia should revise legislations in the finance sector and boarder trading routes. Besides, assisting the transaction with technology, employing e-marketing and strengthening security efforts at check points and departures are among the solutions tipped by the expert.
Above all, as to the expert, foreign companies, which operate in investment and engage in export and import should be well assessed up on their performance. Far beyond that, after assessing all solutions, the State should advance to the last solution, replacing birr notes, the expert concludes. Misganaw Gashaw Beza Assistant Professor of Law (and PhD candidate) at Bahir Dar University says the risk is imminent unless the country act early as it could be catastrophic and reduce nation to chaos like Syria, Yemen, and Afghanistan.
Replaying to the cause, he opines, the economic and the financial system was under some organized group who had been above the rule and regulations, he opines. Skyrocketed price for some commodities such as land is a showcase for the immense illegal money out of legal system. To curb, law enforcement should be re-framed while extensive training to police, the judiciary and attorney aiming to show the magnitude of money laundering is pivotal.
As to Misganaw, proper assessment and monitoring to real estate companies transactions and items with high prices should be taken as a solution to curb the witnessed money laundering. Besides, he added, it would be wise to put an eye on few diplomatic communities’ experts and international institutions operating here in the nation. Some criminals may prioritize front companies to launder illicit funds and mix legally obtained money with illegal cash to disguise their source.
Due to criminal’s ability to draw on these excess funds, they are able to “subsidize” their products, offering them at relatively low costs. Some criminals have been known to offer their products at prices below the manufacturer’s cost, he added. Consequently, the front companies had a competitive advantage over the legal enterprises that borrowed capital from financial markets, making it difficult for these legal firms to compete.
He disagrees with the assumptions given on changing the currency. As to him, introducing new notes, which incurs huge sum of capital, at the middle of dire demand of foreign currency, will be pouring salt on the economic wound. The experts call on respective institutions to act early since it is high time to strengthen Ethiopia’s capacity than ever before in countering money laundering and illicit financial flows.
The international community and regional institutions should also show solidarity in building national human capital capacity in addressing the threat, they opine. Besides, the experts recommended interconnection of investment firms and financial sectors with international financial systems.
The Ethiopian Herald, January 9/2019
BY MENGISTEAB TESHOME
