By our staff reporter

Oromia Bank announced a net profit of 1.5 billion birr, marking another record profit before tax. The bank’s investments, as of June 30, 2023, amounted to 153 million birr. Additionally, it made further investments totaling 17.1 million birr, with 8.59 million from Oromia Insurance, 4.83 million from Sun Industry, 3.68 million from Etswitch, and the remainder from three other companies, as stated in its annual report.

During the year ending on June 30, 2023, Oromia Bank generated a total of $371 million in foreign exchange through international banking operations, achieving 102.1 percent of its plan. The bank also witnessed a significant 33 percent increase in its foreign exchange reserves compared to the same period the previous year, contributing to notable growth within the Ethiopian banking industry.

The bank reported total assets of 65.4 billion birr at the end of the fiscal year, with its capital reaching 5.4 billion birr.

Teferi Mekonon, the bank’s CEO, highlighted a 43 percent increase in income, amounting to 2.45 billion birr compared to the previous year, reaching a total of 8.3 billion birr. The report further disclosed that the bank’s net profit reached 2 billion birr.

The 14th annual regular and 5th emergency general meeting of Bank of Oromia SC was held at Millennium Hall.

The bank demonstrated a 24 percent growth in deposit collection performance in 2010, with deposits reaching 54.3 billion birr as of June 30, 2023.

Foreign currency earnings from international banking operations amounted to 371 million dollars, reflecting a growth rate of 32.8 percent, as stated in the report. Moreover, the bank’s total assets exhibited a 27 percent growth, reaching 66 billion birr as of June 30, 2023.

Currently, Oromia Bank serves 4.3 million customers, with over 2.5 million utilizing digital banking services.

By Muluken Yewondwossen

Government borrows 17 billion birr from the National Bank of Ethiopia (NBE), in the first quarter of the budget year, whilst disclosing that direct advance (DA) will only be used as a last resort to fill the budgetary shortfall.

According to the Ministry of Finance’s (MoF) quarterly debt report, the government received 17 billion birr during the first three months of the 2023/2024 budget year.

When compared to a similar period of the 2022/23 budget year, which was 60 billion birr, this year’s figure is far lower.  

The 236.5 billion birr DA that were converted to long-term bonds as a result of the October 2022 occurrence included the 60 billion birr that were issued in the first quarter of the previous budget year.

In a statement released in August, the government through the NBE said that various fiscal and monetary tools are being applied to fight inflation. As noted, one of them was the reduction of DA, which is one of the contributors to runaway inflation.

According to the decision, NBE would only lend up to one-third of what it did the previous year and drastically cut its DA to the government in this fiscal year.

“Agreements have been reached with the MoF to utilize this facility as a last resort in the event that the market is unable to generate enough Treasury bills (T bills) and Treasury bonds, which were imposed on all commercial banks, including the state-owned Commercial Bank of Ethiopia, a year ago, to collect 20 percent of each loan disbursement,” NBE cited in August

The government has authorized 801.6 billion birr in expenditures for the 2023/24 budget year, which is about the same as the year prior.

The government now intends to collect 479.5 billion birr in taxes during the budget year, accounting for 59.8 percent of the authorized budget.

With a net share of 2.1 percent of the GDP, the deficit of the declared over 801 billion birr budget is 281.05 billion birr and from the authorized budget, the deficit accounted for 35 percent.

According to the MoF’s budget statement, loans for projects, domestic loans, and loans to protect essential services would be used to close the deficit.

Of the authorized budget, the percentage of domestic loans is 30.2 percent, while the share of the remaining two loans was 4.8 percent.

According to MoF, the size of the domestic loan will be 242 billion birr and will mostly consist of DA, T-bills, and Treasury bonds.

Including the 60 billion birr that was taken in the first quarter of the 2022/23 budget year and converted into long term bond in the past budget year, the direct advance amount was 190 billion birr.

According to the MoF report, as of September 30, 2023, the total outstanding debt of DA had grown from 130 billion as of June 30, 2023, to 147,000 million. The Ministry’s annual debt bulletin from the previous year indicated that the outstanding debt was 120 billion birr, while the most recent report shows a 10 billion birr increase.

In compliance with Directive No. MFDA/TRBO/001/2022, which requires commercial banks to buy a five-year treasury bond at 20% of their new loan disbursement, a new domestic debt instrument was introduced on November 1st, 2022. As of September 2023, the total amount of this debt instrument was approximately 48.4 billion birr.

It was 38.2 billion birr as of June 30, having grown by 10.2 billion birr during the first quarter of the current fiscal year. On September 30, 2023, there were 371.8 billion outstanding T-bills, up from 341.9 billion birr on June 30, 2023, a rise of 8.75 percent.

As of September 30, 2023, there was 1.9 trillion birr in total domestic debt, 2.23 percent more than there was 1.9 trillion birr on June 30, 2023.

As of September 30, 2023, the public sector’s total external debt was USD 27.73 billion, down from USD 28 billion as of June 30, 2023.

The MoF stated in its report citing, “The main reason is a relatively lower disbursement in the quarter compared to principal payments, another factor is that a stronger USD against other currencies leads to lower external debt in terms of USD.”

This 1.23 percent shrinkage between the two periods can be partially explained by exchange rate variation. IDA accounted for the majority of the USD 151.74 million in foreign public sector debt payments made between July 1, 2023, and September 30, 2023.

According to the report, there has been a decrease in the disbursement of external financing in the last two years. One reason for this decline in the total disbursement of external debt is that state-owned public enterprises, apart from Ethiopian Airlines, have not received a new loan in the last four years. The report explicitly said that low payments from Chinese creditors also play a role.

The principle, interest, and fees associated with paying off the foreign public sector debt came to USD 306.96 million over the reporting period.

The external debt’s present value (PV) as a percentage of GDP was around 13.1 percent, but the entire public sector debt’s PV was approximately 34.9 percent.

At September 30, 2023, 56.11 percent of the entire debt of the public sector was made up of domestic debt, and 43.89 percent was made up of external debt.

By our staff reporter

The 2023 Human Freedom Index had just been released, shedding light on the state of freedom in various countries around the world.

Among the 45 countries in Sub-Saharan Africa, Ethiopia stood at the 39th position in terms of human freedom. While this ranking may not have been the highest, it was a reflection of the country’s progress and challenges in ensuring personal and economic freedom for its citizens.

Zooming out to a global perspective, Ethiopia found itself at the 148th position among 165 countries worldwide. The nation had slipped one place since the previous index in 2021, indicating a slight decline in its overall score. However, Ethiopia was not alone in facing such challenges. Somalia and Sudan, two neighboring countries in Sub-Saharan Africa, were ranked at the bottom of the list, highlighting the significant work needed to enhance freedom in those regions. On a global scale, Yemen and Syria occupied the last positions, indicating the dire state of affairs in those countries.

But what exactly did the Human Freedom Index measure? It aimed to present a comprehensive evaluation of human freedom by assessing the absence of coercive constraints on individuals. The index utilized 86 distinct indicators to gauge both personal and economic freedom. These indicators covered a wide range of areas, including the rule of law, security, movement, religion, association, assembly, civil society, expression, information, relationships, size of government, legal system, property rights, sound money, freedom to trade internationally, and regulation.

The Human Freedom Index was a vital tool in understanding the state of freedom globally. It encompassed 165 jurisdictions, representing an impressive 98.8 percent of the world’s population. The index had been tracking and ranking countries for over two decades, starting from the year 2000 when it first became feasible to create a robust and meaningful index.

Sadly, the executive summary of the 2023 index revealed a distressing trend. Human freedom had experienced a severe deterioration in the wake of the coronavirus pandemic. Almost all areas of freedom had suffered, witnessing significant declines. The rule of law, freedom of movement, expression, association, and assembly, as well as the freedom to trade, were particularly affected.

This decline was not an isolated event. Even in the previous year, 2020, human freedom had experienced a substantial fall. The challenges brought about by the pandemic had further compounded the situation, leaving freedom at a persistently low level.

As the world grappled with the consequences of the pandemic, Ethiopia and other countries faced the immense task of restoring and safeguarding freedom for their citizens. It was a reminder of the ongoing struggle to ensure that individuals could enjoy their rights and liberties to the fullest extent, irrespective of the challenges that lay ahead.

Ethio Telecom discloses that 3.6 million people have received loans through its digital financial services.

The telecommunications firm announced that it has provided credit services to more than 3.6 million customers through its digital financial services platform it has in tandem with Dashen Bank and Commercial Bank of Ethiopia.

The institution has recently launched a “Digital Finance Market” Solution where banks, microfinance, insurance and other institutions in the sector can use their technological capabilities to make their services accessible.

With this built platform, financial services have now been made available to more than 40 million Tele Birr customers.

According to the company, the ‘Digital Financial Marketplace’ is a solution that allows financial institutions to offer their microfinance services such as credit, savings and insurance services to their customers using the Unified Digital Financial Marketplace option, and allows customers to use their mobile phones from wherever they are. The service is based on a loan formula that takes into account the customer’s credit activities and timely repayment experience and uses artificial intelligence, so it is possible to provide loan services without collateral.

In addition, the company implemented the (Digital Share Sell/Buy) platform, which is an opportunity for licensed business institutions to digitize their stock purchase and sale process in a cost-effective manner and make their shares widely and easily accessible to the community.

In the past, Ethio telecom has introduced digital services such as smart education, smart agriculture, smart water and energy, as well as providing modular and cloud data center services that allow the country’s banks to focus on their core mission without having to build their own data centers.