Millions of dollars bank loan for cotton plantation disappear into thin air

ESAT News (April 25, 2016)

The Ethiopian government had allocated millions of dollars for cotton plantation in the last few years but investors who took the loans had only used a fraction of the money for the intended purpose.

According to the Textile Industry Development Institute, about 3 billion birr (150 million USD) was loaned to investors but most of the money has not been used for the development of cotton plantation. The Institute also said only a small portion of the 100,000 hectares of land was developed for cotton plantation.

A task force is now investigating the possible misuse of loans and government officials are vowing to take legal measures. It is however a public knowledge that only the Tigrayayn ruling elites and their close connections have access to loans and control a vast area of land all over the country.

Ethiopia loses billions of dollars every year due to illicit financial outflow from the country. According to the Global Financial Integrity, the country had lost US$11.7 billion to illicit financial outflows between 2000 and 2009. In 2009 alone, the country lost US$3.26 billion to illicit financial flow.

Last month, hundreds of thousands of dollars stashed in a luggage was found at a Chinese airport. It was later discovered that it belonged to Ethiopian passengers. Employees of the Ethiopian Airlines have been whistle blowing that bags filled with dollars belonging to the families of the ruling elites leave the country more often.

Last month, the Development Bank of Ethiopia said it has lost track of the hundreds of millions of dollar loans given to foreign agricultural investors. Some foreign companies had left the country without paying the bank loans. Sambla was one such bank where Danish borrowers were lent money and did not pay it back.