Ethiopian Telecom: Suffereing Under A Kleptocratic Corporate Governance

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Ethiopian Telecom: Suffering Under Kleptocratic Corporate Governance
By Ewnetu Tessema
October 22, 2005

Prime Minister Meles Zenawi assisted Eritrea in the 1998-2000 War against Ethiopia by turning Ethiopia's military victories into courtroom defeats. This led to the split of the ruling TPLF party in two when TPLF officials accused Meles of "treason." Publicly resented as an Eritrean agent in control of state power in the country, Meles moved swiftly and stripped his opponents of their parliamentary immunity, which led to a massive crackdown on government and senior army commanders. With an Eritrean war of aggression in the offing once again, public debate among Ethiopians boils down to one agreement: "Meles remains the singlemost important threat to Ethiopia's survival, and war is not in the interest of the Ethiopia or Eritrean peoples."
I have one disquieting news flash for you today. It may sound a fiction or a fairy tale. I don’t blame you if you think so. No rational person in the right frame of his mind can have the courage to say there is a government that tolerates such a persistent and a massive scale of misappropriation of public fund. The reason is simple. It is an institutionalized corruption. Period. Some may even tend to dismiss my story I am about to tell you as a tainted anti Weyane political propaganda with no factual basis on the ground. I want to tell such guys that there are million other fronts to expose Weyane’s dictatorial regime. Weyane is a regime that exposes itself by every action it takes every day. Ethiopian Telecom can never ever serve as a political propaganda front. Over and above this, the writer of this article is NOT directly or indirectly affiliated to any political group in Ethiopia. This, however, does not mean I show no concern to what is happening in my beloved country.

I have been for over a year thinking the corruption at the ETC is purely caused by the delinquency of the CEO of ETC and his yes men i.e. the so called Deputy Managing Directors or Deputy CEOs, commonly known as EOs (Executive Officers). Unfortunately it took me over a year to realize that it goes far beyond that and the whole prevalent sad situation at the ETC can somehow be characterized as a political corruption.

In broad terms, political corruption is the misuse of public office for private gain. The degrees of corruption vary greatly, from minor uses of influence and patronage to do and return favours, to institutionalised bribery and beyond. The end-point of political corruption is kleptocracy, literally rule by thieves, where even the external pretence of honesty is abandoned. This is exactly what we have at the ETC i.e the commonly known elementary Ethiopian decency and modesty (“Yilugnta”) are deleted from ETC’s and its managers dictionary and what is prevalent is unfettered and a continuous broad day light robbery.

The Ethiopian Telecom CEO has facilitated all the favorable conditions for corruptions. What are these conditions? They are as follows:

  • Conditions favorable for corruption at the Ethiopian Telecom Corporation
  • Concentration of decision-making power in the hands of the CEO:
  • Lack of transparency in decision-making
  • Large amounts of public capital involved in all ETC’s project
  • The CEO has organized self-interested closed cliques and "old-boy" networks
  • The CEO has established Weak rule of law
  • Not merit-based salary structure is in place.
  • The CEO has appointed officials who are apathetic and uninterested, or gullible and easily led demos that do not scrutinize the whole process sufficiently.

Corruption in Ethiopia today is centrally ordained and one can hardly find a politically affiliated official who dares to assert his/her innocence. This Massive and unabated persistent corruption has generated economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. I am afraid I am swayed far aback from the main issue I want to write about today.

ETC, some two years before, issued a tender inviting software developers to come up with their offer to develop an integrated billing software. An Indian company by the name Ushicom won the tender for 2.6 Million United States Dollars being, inter alia, the least bidder. Ushicom started its work some months back. Ushicom subsequently suggested to ETC that it is unable to integrate the INTERNET bill with the other services. This has not worried much the ETC guys. They sat for half an hour meeting and were told by the CEO that they should prepare another tender document for INTERNET billing software. The Subordinates, unquestioningly loyal and obedient as they are, prepared a tender document and invited interested bidders. This time a South African company by the name Dimension Data won the tender for 1.4 Million United States Dollars. Here comes the BONANZA. The Indian company Ushicom signed a contract for 2.6 Million USD. Ushicom, however, is unable to deliver what it clearly agreed upon to deliver. And yet Ushicom is going to be paid the full contract amount i.e, 2.6 Million USD. Dimension Data will take 1.4 Million USD as per the agreement in the contract. The total amount of money became 4 MillionUSD. In actual fact it is clearly demonstrated the whole work can be done for 2.6 Million USD. ETC had to deduct 1.4 USD from Ushicom for its failure to deliver what it has agreed to deliver for 2.6 Million USD. Why should they deduct this money? It doesn’t take a genius to detect the under the table transaction. The payment to both companies will be effected in December this year.

Here I want to thank all ETC employees who are sending us emails everyday. We are on the average receiving 30-45 emails everyday. Here we want to remind ETC employees that we are not government officials or Ombudsman to rectify administrative wrongs that are taking place at the ETC on a daily basis. We are now concentrating on the corruption issue. If the administrative issues are related to corruption they are most welcome. If the descipilinary action is to silence or terrorise potential anti corruption activists, we again welcome it provided it can be sufficiently substantiated. Otherwise, we suggest that you can take your cases to the labour courts for reversal of wrong administrative decisions. There are ONLY very few incidents, after the appointment of the current CEO, where the labour courts in Ethiopia have rendered judgment in favour of ETC.

Finally, I want to seize this opportunity to appeal once again to all the Ethiopian Telecom employees to divulge all information regarding the prevalent illicit, unethical and corrupt practice at the Ethiopian Telecom Corporation to the ANTI CORRUPTION COALITION OF THE ETHIOPIAN TELECOM EMPLOYEES .

Ewnetu Tessema


cc:The Ethiopian Ministry of Transport and Communications
Addis Ababa

The Federal Ethics and Anti Corruption Commission
Addis Ababa



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