Ethiopia

Ethiopia Corruption Report

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Snapshot

Ethiopia_235x116.pngThere are high-levels of corruption in Ethiopia, although less high than in comparable regional countries. Examples of corruption include facilitation payments and bribes being necessary to keep land leased from the state. Ethiopian anti-corruption law is primarily contained in the Federal Ethics and Anti-corruption Commission Establishment Proclamations No. 235/2001 and No. A33/2005 (Anti-Corruption Law). Facilitation payments are illegal, and it is forbidden for civil servants to accept gifts or hospitality that may affect their decisions. Even though a legislative framework against corruption exists in Ethiopia, anti-corruption regulations are rarely enforced.

Last updated: June 2015
GAN Integrity Solutions

Judicial System

Ethiopia's judicial system demonstrates low levels of independence (GCR 2014-2015) and operates under close orders from the executive (BTI 2014). The judicial system is weak and lacks experienced staff, resulting in delays of trial proceedings and an uneven application of laws (HRR 2013). Trials are often closed to the public and the media, contributing to the lack of transparency in Ethiopia's courts (FitW 2015). However, an ongoing modernisation programme within the courts has significantly reduced petty corruption such as demanding or accepting bribes in return for the performance of routine duties (World Bank, 2012). Despite these reforms, investors involved in commercial disputes express a lack of confidence in the judiciary to objectively assess and resolve disputes; the underlying reason behind this distrust is that Ethiopia's judicial system is weak, overburdened, poorly staffed and prone to corruption (ICS 2014).

Police

Corruption within Ethiopia's police is perceived to be rampant, and impunity within the police force is a serious problem.  Almost half of respondents believe the police is corrupt (GCB 2013). Police officials, particularly traffic poilce, ignore criminal offences in return for bribes; other corrupt practices of police officials include falsifying or altering evidence and delaying or cancelling arrests for bribes (World Bank, 2012).

In January 2015, the Dire Dawa Bench of the Federal High Court convicted four law enforcement officers for corruption. The officers received jail time and fines for appropriation and misappropriation of 246 cartoons of Shisha in the discharge of their duties (FEAC, 2015).

Public Services

Corruption is a problem among low-level bureaucrats in Ethiopia (HRR 2013). Petty corruption and the solicitation of bribes in return for the processing of documents are particularly common forms of corruption in the public services sector (FitW 2014). Companies are sometimes required to pay bribes when dealing with public utility authorities: There is a moderate risk of bribery and extortion related to granting permits and licences, and facilitation payments are quite commonly paid by contractors to expedite the issuing process to timely meet contract commitments. The country's health sector is rife with corruption (World Bank, 2012). Finally, business inspections by government officials to ensure public health and safety standards are carried out in an arbitrary and ad hoc manner (GI 2010).

Land Administration

Businesses report property rights are insufficiently protected in Ethiopia (GCR 2014-2015). There is no right to private ownership of land: All land is owned by the state and leased out for up to 99 years (ICS 2014). Leasing land is impossible without bribing the city administration, and this practice reportedly continues due to a lack of detailed and clearly laid out laws and directives (ICS 2014). In addition, the issuance of forged land licences in return for bribes or due to nepotism has significantly eroded confidence in the land records system (ICS 2014). A lack of accountability makes it possible for officials to exploit loopholes and enrich themselves through corruption (World Bank, 2012). In urban areas, informal fees within land distribution are institutionalised, making it nearly impossible for developers to acquire the right to a plot of land without bribing public officials (FEAC).

Tax Administration

Some private sector businesspeople in Ethiopia report that civil servants within the tax collection agency are corrupt and do not apply tax rules uniformly (GI 2010). Companies rank tax regulation in Ethiopia as a problematic factor for doing business (GCR 2014-2015). The Ethiopian tax system is non-transparent, but very few surveyed businesses expect to give gifts to tax officials (ES 2011).

Customs Administration

The customs administration is considered to be the most corrupt sector in Ethiopia (World Bank, 2012). Businesses rate the transparency of the border administration as very low (GETR 2014). Companies acknowledge the burden of customs procedures in Ethiopia is considerable; the country sits very close to the bottom of the world ranking in this respect (GCR 2014-2015). Enterprises that are state-owned or that have close relations to top-level government officials have considerable advantages over private firms, including access to faster customs clearances, leading to an uneven playing field for local and foreign investors (ICS 2014). 

Public Procurement

Companies complain of unlawful contract termination and non-transparent tender award processes, and companies perceive favouritism towards vendors who provide concessional financing (ICS 2014). Some investors have ceased doing business in Ethiopia’s construction sector as they believe access to the market is plagued by corrupt practices, and other firms report payments being withheld in the expectation of facilitation payments (World Bank, 2012). Additionally, facilitation payments with regard to paying and settling certificates in the construction sector are said to be common but not necessary; they are small when they do occur (World Bank, 2012). Starting a business in Ethiopia’s land and construction sector may prove difficult as competition is hampered both by favouritism towards politically affiliated companies and by the difficulty of obtaining construction contracts without resorting to bribery; nevertheless, well-established companies may not hold these opinions (World Bank, 2012).

Natural Resources

Ethiopia's extractive industries, especially the mining sector, are a hotbed for corruption; state-owned drilling companies benefit from political favouritism, whereas private companies face high market-entry barriers (World Bank, 2012). Licensing authority officials resort to extortion and bribery in return for issuing licences to companies, accelerating the process or changing the licence conditions, and officials overlook breaches of mining conditions (such as environmental and health and safety regulations) in return for bribes (World Bank, 2012). Business inspections by government officials to ensure environmental standards are met are carried out in an arbitrary and ad hoc manner, and bribes are usually extracted from companies in return for favourable treatment or expedited processing (GI 2010).

Ethiopia's application to the EITI group, an initiative to curb corruption in energy and mining, is approved, so Ethiopia has three years to comply with EITI standards (Reuters, Mar. 2014). In May 2015, the governments of several African countries, including Ethiopia, introduced an initiative to create an independent body that will ensure transparency in the mining sector independently of EITI and with a focus on auditing international companies instead of the government (The East African, May 2015).

Legislation

In principle, the legislative framework to prevent and sanction corruption in Ethiopia is strong. However, the government does not implement these laws effectively, and the judiciary is known to be politically influenced. The Federal Ethics and Anti-corruption Commission Establishment Proclamations No. 235/2001 and No. A33/2005 (Anti-Corruption Law) criminalise attempted corruption and extortion, while the Criminal Code 2004 criminalises active and passive bribery, money laundering and bribing a foreign official. Further, bail is prohibited for anyone charged with corruption. The Assets and Property Registration Law calls for government officials and their relatives to register their assets and properties. The law also requires government officials to not accept any gift in connection with their duties. Facilitation payments are illegal (World Bank, 2012). Article 444 of the Criminal Code, Proclamation No.414/2004 provides some legal protections for whistleblowers, but the protection of both public and private sector whistleblowers is inadequate (GI 2010).

Ethiopia has ratified the AU Convention on Preventing and Combating Corruption and the UN Convention against Corruption (UNCAC). Ethiopia is not a member of the International Centre for the Settlement of Investment Disputes (ICSID) or of the New York Convention of 1958. Access the Lexadin World Law Guide for a collection of laws in Ethiopia.

Civil Society

Freedom of the press, access to information of public interest and prohibition of censorship are guaranteed by Ethiopia's constitution. However, the Criminal Code contains many provisions that limit freedom of the press, including criminal defamation provisions and restrictions on 'obscene' communication and criticism of public officials (FotP 2014). Authorities occasionally detain, beat or harass journalists; as a result, an increasing number of journalists practice self-censorship or are forced into exile (HRR 2013). Ethiopia has the second-highest number of jailed journalists in Africa arrested over terror-related offences (FitW 2015). The news media is dominated by state-owned broadcasters and government-oriented newspapers. There are a number of independent newspapers, but they struggle financially and face government harassment (FitW 2014).

Freedoms of assembly and association are guaranteed by the constitution but are limited in practice (FitW 2014). Civil society organisations are controlled by the government, and their autonomy is weak (BTI 2014). The government restricts activities of civil society and NGOs under the Charities and Societies Proclamation (the CSO law), which also restricts CSOs that receive more than 10 percent of their funding from foreign sources (HRR 2013).

Sources

Topics: Sub-Saharan Africa