Financial Crime World

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Only Two Ethiopian Public Institutions Regarded as Honest by Majority

A recent survey conducted by the Federal Ethics and Anti-Corruption Commission (FEACC) in 2012 has revealed that only two out of 22 public institutions were considered honest by more than 50% of respondents. The survey also found that a mere 2.7% of respondents had been asked to pay bribes in this sector.

Ethiopia has signed and ratified several international conventions, including the United Nations Convention against Corruption and the African Union Convention on Preventing and Combating Corruption. However, despite having a strong legal framework, the government’s implementation is often ineffective, and the judiciary is known to be influenced by politics.

Anti-Corruption Efforts

The FEACC has been granted powers to investigate and prosecute corruption cases, but the commission’s effectiveness is hindered by inadequate resources and capacity. The government has also criminalized private sector corruption, including bribery and embezzlement, although there have been no known cases of prosecution.

Asset Disclosure and Whistleblower Protection

Ethiopia requires public officials to declare and register their assets, but implementation is slow, and only a small percentage of officials have complied. The country also lacks a comprehensive system to protect whistleblowers from retaliation and prosecution.

Right to Information

Despite constitutional guarantees, Ethiopia’s reality of Right to Information (RTI) is different. Ministerial guidelines are yet to be published, and national laws undermine RTI guarantees. The mass media law allows for the prosecution of journalists for defamation against the state, and dissent is criminalized through broad definitions.

Anti-Money Laundering Efforts

Ethiopia’s anti-money laundering (AML) legal framework has improved, but it remains on the Financial Action Task Force (FATF) list of countries with strategic AML deficiencies. The country is also among the top 10 African countries by cumulative illicit financial flows related to trade mispricing.

Illicit Financial Flows

Ethiopia features in the top 10 African countries by cumulative illicit financial flows from 1970 to 2008, according to a report by the High Level Panel on Illicit Financial Flows from Africa. The main sources of illicit proceeds-generating activity include:

  • Corruption
  • Tax fraud/evasion
  • Human trafficking and migrant smuggling
  • Arms trafficking
  • Smuggling of contraband goods