Realist, not conformist analysis of the latest financial, business and political news

Impressive – Ethiopia’s Managed To Make The Bureaucracy Run Out Of Paper

This is a truly and deeply impressive piece of governance. Ethiopia has managed to so screw the system that the bureaucracy itself has run out of paper. Amazingly, no, they have not then learnt the correct lesson, which is that they should stop screwing things up. Instead, they’ve announced that everyone should try dealing with the problem in their own manner, rather than stopping doing what is causing the problem:

As the result of the recurrent foreign currency shortage, the board of Addis Ababa Public Procurement and Property Disposal Agency has given permission to Woreda administrative offices to directly procure their own stationary materials, bending its procurement procedure to execute all such purchases through the Agency.

Meriko Birilew, contract administration director at the Agency, told The Reporter that the move by the City administration came following a gap in stationary items supply.

This gap was created mainly as the result of foreign currency shortage where the suppliers struggled to import the items.

This is, sadly enough, more than just a joke. For Ethiopia is one of those countries where nothing is allowed to happen without the imprimatur of the bureaucracy. Meaning that if they’ve not got the paper upon which to issue one then nothing at all can happen. A dismal result for one of those places which has finally started having economic growth for the first time since the Queen of Sheba went off to shag Solomon.

The reason for the problem?

The current shortage of foreign currency is also affecting the whole economy. Its impact is also reflected in the formal and parallel currency trading markets. For the past couple of months, the rate of exchange between the two markets has shown a significant difference where, for instance, one USD is traded for up to 34 birr in the black market where as in formal channels is traded at 27 birr.

Most of the suppliers who have been working with the Agency have waited for more than one year to get foreign currency. This has also restricted them to import large quantities of items from abroad which resulted in a shortage of stationary items in public offices.

Yep, dual exchange rates. Or a fixed official rate if you prefer, leading to that duality. No one does want to sell to government at the official rate of 27, given that they can go out into the street and get 34. So, officialdom has it’s lovely cheap foreign exchange rate (that’s what a high exchange rate is, cheap for those on the inside) and no actual foreign exchange. Without which they cannot get the paper to change the foreign exchange regulations presumably. Not that they’re showing much sign of being willing to do so anyway.

All of which gives us, again, two of our economic basics. If you fix the price of something nice and low – food in Venezuela, apartments in New York – then the supply of that thing disappears. The second being that to really screw things up we need government action and the correct question to be asking in any disaster is, well, what should government stop doing to resolve this problem?

It’s true that it’s not always government causing a problem but as with races to the swift, battles to the strong, that’s the way to bet. For we’ve not really anywhere, outside the fevered dreams of the Objectivists, left with too little government.

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6 years ago

So offices can now obtain paper on the street without requisitioning it through the central Purchasing Department. And what resources does the office have, with which to purchase the paper?

6 years ago
Reply to  Spike

Anyone can buy paper, provided they pay the vendor’s price calculated on a landed cost at 34 birr to the USD. Ethiopian vendors apparently don’t like giving a forced twenty per cent discount and waiting a year to be paid.

6 years ago

They should buy moving items if they can’t get stationary items. Or perhaps they mean stationery items. ?

maria wilson
maria wilson
3 years ago

thanks Mr Barry

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