Booming Economy and Booming scam artists

Reading reports from IMF, World Bank, Ethiopian government and most of all listening to people who have recently visited Ethiopia, I cannot explain my excitement hearing the economic boom and its no sight to end. On the contrary, I am concerned that the booming economy may incubate scam artists who may take advantage of naïve investors.

In the past three years, all the talks were politics. I thought many Diasporas have lost their sense of reasoning. The politics was hovering around emotions. Politicians, particularly, the disintegrated CUD, was manipulating diasporas’ emotion to raise funds, to asphyxiate Ethiopian economy, and to increase divisiveness among Ethiopian ethnics, especially, Tigreans. Now, CUD is finally thinning in the air. No one can write its tomb stone as it’s not known its burial place. CUD, at its expense, has played a significant role in shaping the Ethiopian politics; their refusal to join parliament, their ethnic based strategy to attract Diaspora supports, their falsified accusation against the ruling party, and their indirect involvement in armed struggling with AFD and the Eritrean regime are some of the lessons for future astute politicians. This article is not about politics but economy. Nowadays, the talks are shifting from politics to economy.

Some vocal CUD supporters are changing their venues. They have become real-estate investors and entrepreneurs, halleluiah.  The government of Ethiopia strategy to fight poverty and backwardness are paying off. Because of this strategy, Diaspora CUD supporters are thinking twice before they spend their time, effort, and money to stand against aids to Ethiopian people and government. A couple of years ago, I recalled CUD supporters in London, USA, and other countries begging the Western nation to stop sending support to the Ethiopian people and government. I hope these people can now say “Marign, Emeye Ethiopia” “Forgive me, mother Ethiopia.” Apart form these, this booming economy as it has opened opportunity to genuine investors and entrepreneurs, it has also opened windows of opportunity to scam artists.

In any booming economy, naïve investors and entrepreneurs can easily be persuaded by so called real-estate agents, brokers, consultants, or any individuals who claim to have direct contact with a high level government of Ethiopian officials. There is an adage in the Western world, “It is not what you know but who you know.” This may be true in Ethiopia but what I want people to be cautious is of individuals who are too good to be true.

Real-estate investment is a fast growing phenomenon in Ethiopian. As such, new real-estate brokers and managers wanna bees are popping up through out the Diaspora community. I am not certain whether these brokers are genuine but I would like the government of Ethiopian to create a website whereby investors can check the genuineness of brokers. Controls for checks and balances must be in place. I understand this is a free economy enterprise but it should not be a free economy for scam artists. If investors are scammed and if the government cannot provide information on timely bases, it can put a dent to poverty eradication strategy.

Measures the government can take to minimize the impact of scam artists. For the purpose of this article, an agent can be a business or individual.

1. Any Diaspora agent either investment, real-estate, business, or otherwise must be registered with the Ethiopian relevant business licensing department.

2. The agent name must be listed in the government of Ethiopian website or in the Ethiopian embassy’s website where the agent lives.

3. The agent must be free of any law suits and/or convictions arising from unfair trades, investment or real-estate dealings

4. An agent must be rated. For instance, a brand new agent can be rated 1 while an agent with 15 years of experience with good standing can be rated 20. These are just examples.

5. Before the Ethiopian government issues a license to an agent, it must request a police clearance from the country where the agent resides.

6. The government must be satisfied as to the legitimacy of the investment. This ensures the money is not acquired as a result of drug trafficking, money laundering, or any illegal means.

7. The agent must have insurance from the Ethiopian established insurance agencies to ensure that investors and entrepreneurs can have the opportunity to claim their hard earned investment from the insurance company if the agent defaults or engaged in malpractice.

8. Enforce agents to display their Ethiopian business licenses, valid insurance registrations, and other relevant information to their clients.

9. The government must establish a phone line or an email for investors and entrepreneurs to file complaint or request for information.

10. Complaints must be investigated seriously and information must be provided timely.

11. The above are some of the measures among a few.

My point is to raise awareness that scam artist will take advantage of the Ethiopian booming economy. The Ethiopian government must be aware of this and put preventative measure before hand.

Let’s be proactive than reactive. Let’s not wait until investors and entrepreneurs have lost their life time savings. Act now. Put measures to detect and stop scam artists.

In order to establish a strong economy, making investors and entrepreneurs more comfortable should be the primary goal of our government. Allowing scam artist to run freely or neglecting to ensure the fair trading in the name of Ethiopia can negatively impact the poverty eradication strategy.

Haile B.

01/29/08