Coming across impact investors charged with the philanthropic and social corporate responsibility here in Ethiopia is unthinkable, so remarked scholars.
Fantu Cheru is Emeritus Professor of African and Development Studies at American University in Washington DC. He said that impact investors basically invest with a mission of translating into action the practical concept of social corporate responsibility through means of philanthropic devotion.
He stated that it is not just simply a sort of donation by social responsibility investment. This investment goes back to a social program. It is hard to claim whether the impact of investment trend is palpable here in this country. It requires the whole regulatory environment. It requires doing with foundation program, philanthropic mission and investment principle.
“Here in Ethiopia, observably many have close fistedness and self-centric mentalities when it comes to investment trends. Social corporate responsibility has not been totally visible and has not taken place.
In this country, the private sector is simply doing with networking chains. Social corporate responsibility is not only collecting money but also pumping finance into social programs. It is hard to see exemplary investors as impact investors in most sectors of the country,” he added.
As to him instead the business-minded affluent have engaged in impact investment, they are the ones who are blamed for chemical intoxication, desertification, climate change and air pollution as well as labor exploitation.
Therefore, there should be enabling government policy to actively engage the investors towards investment program. For instance, the world richest person named Bill Gates has got tax deduction; this contributes a lot for share program. This investor has managed to receive tax deduction liability due to the fact that he has been involved in philanthropic activity.
According to him, the government has to pave possible ways to encourage such kinds of activities. In terms of Ethiopia’s situation with the context of too much thriftiness, it is impossible to have social corporate responsibility investors in the country. Greediness mentality is the main cause of the problem of not practicing impact investment.
He further indicated that every investor should attach due emphasis to the entailment of social corporate responsibility program. Most investors contemplate about how much money to make instead of thinking about giving back to society in return.
Such mentality should be avoided. Lack of awareness in the exercise of social corporate responsibility is critical for externalization of their personal behavior toward the role of government bodies. Investors should work in making a difference in this country.
On shifting the money to the poorest people as a form of wealth distribution, he mentioned that the government has alternative options to take shared money from the affluent individuals in a way of implementation of wealth taxation format. Then, the government is able to use the taxed money for social program.
According to Prof. Fantu, the government can impose high margin of taxes to bridge the gap of gini-coefficient of rich and poor people in such a way the fulfillment of healthcare, education, water and sanitation programs for the poorest people. The government has a right to employ various techniques for wealth distribution of the country. So, progressive taxation should be included in the imposition of investment returns for the social problems of the country.
In encouraging the deployment of investors on impact investment mission, he noted that there must be ways to encourage the chamber of commerce, their associations and their members to incorporate social responsibility in a bid workers, community and the country at large bask under the service. Therefore, there must be some form of awareness program. This is very important. As the same time, there is a call for enforcement measures by the government body.
“When it comes to doing well for the society investors should be awake. The greediness of investors does not invite customers to buy products on their retail shops and factories because every moment they involve in ‘wrong’ doing on the violations of workers’ rights and business code of conduct,” he capitalized.
Senior Advisor and Chief Trade Negotiator in the Office of the Prime Minister of Ethiopia, Dr. Mamo Mihretu on his part said that the government has a lofty responsibility to attract and incentivize investors to invest in various sectors of the country. Also it encourages investors to have expansion projects on their investments.
As to him, when the government aims at enhancing and promoting investment, it is mainly with the objectives of bringing capital inflow, job creation and as well transferring knowledge and technology to the local workers.
And when the investors are engaging in the significant role of profit seeking, it must be taking in consideration social purposes as well. As the investors are receiving incentive and support from the government, in return, the investors are saddled with the responsibility of involving in social corporate responsibility program.
“Many investors have been coming here to invest in the activities of cement, mining and other industries for the sake of increment of profit margin. Because of this, the government has encouraged local investors through means of policy making process,” he added.
He went on to say that the government has also encouraged the investors to engage in the impact assessment projects with core responsibility of related field of industries. For instance, if investors invest on food industry, they can involve on facilitation of water supply to the society.
The Ethiopian Herald January 19/2020
BY MEHARI BEYENE
