The Ethiopian Diaspora Trust Fund (EDTF) was launched after the reformist administration came to power with the call of the prime minister to the Diaspora community to participate in national development in assisting the effort to curb social and economic problems of the people.
The trust fund has been undergoing with active participation of the Diaspora authorized by its own institution organized and registered in the country and abroad. So far, more than five million USD has been collected from 26,000 Diasporas.
Recently, the Trust Fund has disclosed that it is finalizing preparation to finance basic development projects by spending millions of dollars. EDTF Executive Director Fikre Zewdie said that the plan is to finance about 16 projects working on education, health, water, job creation and humanitarian support for internally displaced peoples among others.
Accordingly, about four million USD has been spent to support the projects that worth 200 to 350 thousand dollars in the first round project supporting program. Currently, EDTF is reviewing 240 most essential and feasible projects selected from 408 applications in various sectors submitted by both governmental and nongovernmental organizations.
More than 70 volunteer international experts have been assisting the EDTF in scrutinizing the projects based on relevant requirements. Therefore, EDTF will finance the projects that approved by the board referred by the professionals as passable ones after the final review within two months.
It is noticeable that the Diaspora engagement in the trust fund has witnessed a slight decrement due to the government failure in ensuring rule of law, Fikre disclosed.“However, the engagement is yet encouraging from what has been done in collecting fund. Not only this, uneasy numbers of Diasporas are also joining the trust fund.”The Diaspora needs to continue raising fund side by side to its demand on the government about law enforcement, he underlined.
He said that the Diasporas engagement will be increased when a remarkable work is done by the already collected finance on development and humanitarian projects.In any case, the government ought to ensure rule of law to encourage the Diaspora to exert more efforts to the realization of the trust fund and other local engagements.
On the other hand, amending laws that prohibit the diaspora community from engaging in financial and other sectors investment is crucial to support the effort. In this regard, the recently revised law that permits Ethiopians living abroad to invest in finance is encouraging to boost the diaspora investment and engagement in national development projects including those to be financed by the trust fund.
In November, the parliament has approved the revised proclamation to revoke the earlier law that prohibits Ethiopian Diasporas from engaging in insurance and micro finance businesses. According to Fikre the revised law would help to utilize the Diaspora for economic growth through facilitating formal ways of money transaction and financial investment.
It also permits the Diaspora community to easily do business by avoiding tiresome bureaucratic proceedings. Fikre believed that the law is significant to aware the Diaspora to consider the legality of the system and institutions that it prefer to transfer money to its country so as to avoid illicit financial flow. The country needs to attract more Diaspora engagement for its socioeconomic progress regardless of the amount of their capital and the revision of the binding law is an encouraging move to this end, he stated.
Previously, government officials had been playing trivial role in grieving the Diaspora with hindering laws and tiresome bureaucracy. Therefore, lifting up such restrictive laws is crucial to encourage the Diaspora to assist the country to speed up development programs with cumulative finance, knowledge investment, he indicated.
The permission to insurance, micro finance and banking investment will enable the Diasporas to know more about their country. “When they work here paying tax, they will develop sense of belongings which lead in response to remittance and investment increment”.However, the government also needs to assure them to the wellbeing of their assets beyond offering lucrative business, Fikre underlined.
The Ethiopian Diaspora Agency has been working to avoid bureaucratic system in the proceedings of the Diaspora investment in collaboration with stakeholders. It is a wise act to fill the economic gap in the country with the finance and knowledge of Ethiopians living abroad. Therefore, the agency has been endeavoring to realize this situation, according to Agency Director General Selamawit Dawit.
As to her, the eradication of such laws is significant to boost the Diaspora participation in county’s economy. “We have been urging the government to make open the door for the Diaspora engagement in finance and knowledge to national development.”
Among other reasons, it is illicit capital flow that currently affecting country’s economy Selamawit said, adding that it is a global problem which has been undertaking across the world and nothing new to Ethiopia.
It is challenging to halt illicit capital flow 100 percent but it is possible to reduce its impact by strengthening financial security and improving legal ways of business making, she noted. The revised law will help to reduce the harm to a certain level by formalizing money transfer and improving the Diaspora participation in this regard through ensuring legal ways of money transaction in the area, she stated.
Currently a number of Diasporas are using the opportunity in buying bank shares and opening accounts to deposit their money in the country which is an important step to revitalize country’s economy, she underlined.
“In literal terms, buying shares and deposing money in bank account is the legal ways to the Diaspora to bring their capital to their country free from any illicit flow.” Through time, this will help to reduce illicit financial flow with the expansion of legal engagements, she noted.
In general, facilitating the national business circumstance including amending prohibitive laws is significant to encourage investors especially the Diaspora to engage in development projects. By doing so, the diaspora will support its country and play significant role in lending hand to save the stagnant economy.
The Ethiopian Herald January 7, 2020
BY YOHANES JEMANEH
