Sunday, April 21, 2024
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An alternative proposal in support of Prime Minister Abiy Ahmed’s call for diaspora

Earlier this month, Prime Minister Abiy Ahmed (PhD) made a strong and impassioned plea for Ethiopian’s living abroad to donate funds to a new “Diaspora Trust Fund.” This fund is designed to decrease aid dependency and create investments in education and health initiatives. This proposal asks Ethiopians living in other countries to donate one dollar per day to fund this program. The Ethiopian Diaspora Trust Fund has been established at the Commercial Bank of Ethiopia and is officially open to accept donations. The Ethiopian government offers several ways for diaspora to securely transfer funds to this trust.

An alternative

The goal of collecting funds from Diaspora is worthy of our support, but I propose a different approach to achieve it. This proposal includes:

Request a one-time large sum versus USD one per day.

While many Diaspora may be initially excited about donating one dollar per day to this fund, but that enthusiasm may wane over time, and the financial support discontinued. Instead, if the person donated a larger sum, say USD 500, and was given 5 months to pay it in full, there would be no tapering off of payments since it would be managed more efficiently and within a narrow time frame. In addition, a dollar today is worth more than a dollar tomorrow.

Not only would this process make it easier for the Diaspora to fulfill their financial pledge, it will be easier and less expensive to collect. The systems required to accept USD one per day from hundreds of thousands of people is significantly more complicated and costly than one that accepts one time payments or scheduled payments over a shorted period. Under this plan, more funds would then be available to support the needs of the health, education, and other needs of the Ethiopian people.

Fund a new business.

To support the long-term goal of reduced reliance on foreign aid, I propose that the funds collected be used to develop a business that will deliver a positive and instantaneous economic impact through jobs, tax payments, and industry expansion. This business could be developed in any of a variety of industries including agriculture, manufacturing, telecom, banking and insurance, mining, construction, real estate and others. In addition to establishing one or more profitable businesses, another goal of this project is to employ as many people as possible in meaningful roles and provide training to encourage them to rise within the organization to leadership positions.

When the company becomes profitable, 30 percent of the net profits would go to a foundation that will support a variety of healthcare, education, nutrition and housing initiatives and the remaining 70 percent would be used to expand the original company as well as start another. As this process continues, more and more Ethiopians are employed, taxes are paid to the government, and we create a continual source of charitable funds to care for our people in need.

Organization and structure of the business entity

For this system to truly work, the first and subsequent businesses should be owned by the Ethiopian people. Perhaps the best way to accomplish this would be to have the business entity be established through an act of parliament. This would be unique and also send the message that this endeavor belongs to everyone in and from our nation.

The business entity’s formation and ongoing operations would be managed by an independent board. To ensure integrity and build confidence amongst the diaspora, half of the board would consist of diaspora experts. One fourth of the positions would be filled by appointment of the prime minister and the remaining one fourth would be drawn from the public. Terms of service would be fixed but staggered to assure continuity of leadership. All board members would serve under the agreement that there is a continued full disclosure of their personal finances to bolster public confidence. Each board member should have the qualities and qualifications to assure that they can truly lead the company. To ensure its independence, the Board could be made to be accountable to the Ethiopian Parliament.

Despite its idiosyncratic relationship with the government, the business entity will be functioning within the same set of rules established for other businesses operating in the country.  It should not receive a preferential treatment from the government nor should it expect one. The business entity ought to be expected to play the game of doing business, fair and square.

Profits fund a charitable trust.

As stated above, 30 percent of the net profits of the financed company would be placed in a trust to address a variety of health and educational needs. This trust would be led by an independent board of directors, which would create initiatives that meet specific un-met needs, and disperse the funds accordingly. This board would also oversee the initiatives to assure that the money is spent in a manner consistent with the goals of the programs. Ultimately, these programs should strive to provide needed services and also resources that allow for people to become financially independent.


This proposal is based on the goals detailed by the Prime Minister, but shifts the emphasis to a streamlined donation process and immediate economic impact. By investing the donated funds into the development of a new corporation, people can find employment and profits can be used to support those still in need. Diaspora from around the globe will be energized by this concept that provides long-term solutions to the problems of their country and they will likely give more generously.

As a side incentive, the Ahmed administration may need to rapidly reform its investment policy to allow a burgeoning participation of the diaspora in investment opportunities, hitherto inaccessible to them-such as banking and insurance, telecom, legal practice and others. This will fire up the diaspora community, and will elevate their interest in the success of the Prime Minister’s Diaspora Trust Fund initiative. Because of these additional investment openings, the government will also tap into pristine expertise and plentiful supply of hard-currency to replenish its depleted reserve, with little or no sweat. Above all, such reforms would further glue the diaspora community with the fate of the homeland, we all love.

Ed.’s Note: Zewdu Alem, Esq.  is a senior trial attorney admitted to practice in the State of Maryland and the US Supreme Court. He can be reached at [email protected].

Contributed by Zewdu Alem

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