‘TPLF-firms’ recovering from debts, losses: CEO Azeb Mesfin

 

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Chief Executive Officer of EFFORT Group, Azeb Mesfin, claimed that the conglomerate is recovering from losses and Bank debts accumulated for more than a decade.

EFFORT (Endowment Fund for the Rehabilitation of Tigrai) was established in 1995 – with the primary objective of “contributing to the sustainable development efforts” in the war-torn northern state – with funds donated by the Tigrai People Liberation Front (TPLF – a member of the ruling party EPRDF) acquired during the armed struggle.

EFFORT’s firms are often described as parastatals, due to the overlap between the management and TPLF leadership, even though the conglomerate was established as Endowment, i.e., the initial donor will have no claim to the capital nor to the profits.

CEO Azeb Mesfin, who is a member of the 9-person TPLF executive committee and and widow of the late Prime Minister Meles Zenawi, highlighted the state of the company in an interview aired last month.

Several of the key EFFORT’s subsidiaries have been either swamped in loss or bank debt or suffering from lack of strategic leadership, Azeb Mesfin told speaking to Demtsi-Weyane Radio – a broadcaster based in Tigrai state and owned by EFFORT.

In the two and half years, since her appointment as CEO, Azeb Mesfin claims, all EFFORT firms – except for Almeda Textile Factory – have successfully recovered.

The rehabilitation of EFFORT’s firms – which were supposed to rehabilitate Tigrai state in the first place – was conducted as per the “recovery blueprint” prepared by the late Premier and TPLF chairperson Meles Zenawi in 2012, according to Azeb Mesfin. 

The CEO cited the indicated in her interview that one of the major firms, Sur construction, which had “eaten” its capital twice in the last fifteen years, have now fully recovered and eyes on expansion projects.

Addis Pharmaceuticals Production, a gigantic firm located in Adigrat, eastern Tigrai, had “eaten” its capital four times and has been under the lending bank, according to Azeb Mesfin. However, now, she claimed, it paid off about 900 million birr accumulated debt and it is poised to finish its debts within a year, thus fully returning to EFFORT’s folds.

Azeb Mesfin also indicated that the transport giant Trans-Ethiopia has not been growing as fast as it should for years. However, in the past years, the firm’s capital grew two or three times and managed to close its 20 years backlogs of accounting books. She added, its capital was 270 million “recently” and now reaching 2 billion birr.

Similarly, Mesfin Industrial Engineering, the leading automotive firm in the nation, increased its sales by 500% and tripled its capital 3 times, according to Azeb Mesfin.

Nonetheless, Almeda Textile Factory didn’t improve as fast as planned, Azeb Mesfin noted. She elaborated the firm has been suffering losses for the past 15 years – which is since its establishment. It had over one billion birr in debts when she assumed EFFORT’s chief post. So far, about half of the debt has been paid off.  She added “we started paying debts at the time when the firm reached obsolescence (meaning: the firm was old enough to regain its initial capital and start replacing its machines)”. According to Azeb Mesfin, the firm didn’t pay neither the principal nor the interest on its debts for 15 years.

Azeb Mesfin’s account of the state of EFFORT’s firms has been challenged by Tigraian elites who spoke to HornAffairs on the condition of anonymity given the sensitivity of the matter.

Some pro-TPLF commenters questioned the accuracy of Azeb Mesfin’s interview, claiming that it was an exaggerated account of her track-record at the expense of former CEOs of EFFORT – i.e., Seeye Abraha, who left TPLF & EFFORT in 2001, Sebhat Nega, still a heavy weight in TPLF and CEO of EFFORT until 2008(?), and Abadi Zemu, former Ethiopian Ambassador to Sudan and CEO of EFFORT until 2012.

They also claim – in tandem with some in the Tigraian elite opposed to TPLF – that the recovery narrative is highly exaggerated as some EFFORT firms are still closed or on the verge of being closed.

The performance of EFFORT firms is one of the contentious issues in Ethiopian politics, as Tigraian elites deem its management – or mismanagement – as a squander of the sacrifices made to acquire its initial capital, while right-wing politicians present it as a “looting” endeavor.

It has also been said to have a “crowding out” effect on investments in Tigrai and in the country in general.

In an apparent attempt to address these claims, Azeb Mesfin repeatedly claimed that “no individual owns EFFORT, it is a property of the Tigrai people.” She added if any one observes a misuse of EFFORT property, she has the right and the duty to report that and have it corrected.

Azeb Mesfin was also empathetic in her assertion that EFFORT’s firms have been diligent in paying their tax liabilities. She said “not a cent more, not a cent less” as per the assessments of external auditors. Adding, “EFFORT’s firms are among the high tax-payers in the nation and we are proud of that”.

The CEO insisted that EFFORT’s firms engage on areas that are beyond the reaches of private investors, thus their activities can not undermine the potential role of domestic and foreign investors.

According to Demtsi Weyane radio, the national plan for industry corridors developments does not include Tigrai, therefore EFFORT remains the primary potential for industrialization in that region.

Source: Danielberhane

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