Volatility and disparity of foreign currency exchange arise in the black market with sabotage signaled as the primary fuel by financial experts. If this continues, hyper inflation is set to loom over the local currency, experts warn.
From Capital’s investigation of various illegal market rates, volatility has widely been observed throughout the week.
One of the parallel market actors said that the exchange rate was at 104 birr per dollar, other two sources claimed that as of Friday (September 30) that the rate showed dips from last week’s rate.
“As per my information it is about 100 birr per dollar,” one of the traders said.
With the dollar doing well on the global market against the Euro and GBP, experts who closely follow Ethiopia’s exchange rate highlight that the widening of the parallel and normal market is as a result of sabotage by those who do not seek the national interest of the country, except their own.
“Those that are sabotaging the market inject false rates of the market through social media to hype up the exchange and when someone comes to actually exchange the currency at the black market, he/she is greeted with a different offer,” experts explain showing how the disparities have risen over the week.
Thursday and Friday was actually noted as notorious days for these transactions.
“In my observation the trading has swung between of 85 to 95 birr per dollar,” an individual who closely follows the case told Capital on Friday.
He said that when illegal actors abuse the parallel market against the actual market it benefits them since they are involved in huge real estate exchanges in the town.
“Car and house prices have soared recently, with some rushing to buy while others rush to sell,” experts explained.
“The crook sellers who inflate the market by sabotaging the dollar will gain over the genuine market sellers/ buyers who are out of the dollar exchange equation,” one expert out rightly stated.
Demis Chanyalew, a prominent economic commentator and author, explained to Capital that for there to be stability in the market, the public ought to restrain themselves from buying cars or property for some time.
Experts backing Demis’ idea also highlight that those who sell properties naively thinking they will reap the benefits will also fall victim after a short-while if they plan on re-investing back to the same market hoping for a dip that might not materialize.
Pundits also showcase that government’s effort at cracking the exchange whip has resulted in volatility and sudden dips in the market. Similarly, experts are strongly pushing for government to take even more stringent measures on the legal system regarding importing commodities.
For instance, some individuals have been noted to notoriously use the foreign currency collected from the market to import contraband commodities on false customs document.
“They are misusing the documents, for instance, masquerading LC permit of USD 2,000, only to import products worth USD 200,000. They also reuse the harmonized code frequently in collaboration with some corrupt officers in the government apparatus,” experts explained.
The pundits also stated that currently goods are being imported through Somaliland via Somali region and Dire Dawa, thus investigation on that front is vital. Citations have also been made where numerous commodities flood regional ports to be smuggled to Ethiopia.
A revisit of the franco valuta scheme by government, especially on foreign currency source is also deemed necessary by experts.

Major moves from a fortnight back between Djibouti, Ethiopia and South Sudan have materialized on matters of logistics.
On September 18, a delegation led by Taban Deng Gai, Vice-President of South Sudan, together with Ministers from Communication, Transport, Equipment and Road of the State paid a six day visit to the two neighboring countries.
The delegation’s visit to Djibouti which lasted 3 days saw interactions with different government official with agreements being penned to enhance cooperation in logistics and other infrastructure sectors. The deals will see South Sudan benefiting with regards to access of alternatives for its economic and social developments.
As per the information Capital obtained from Djibouti Ports and Free Zones Authority (DPFZA), the delegation had visited different logistics facilities including a submarine telecom hub.
The delegates met with Aboubaker Omar Hadi, President of DPFZA, mainly to discuss the development of a refinery project and the pipeline which South Sudan’s intends to export its natural gas from the Port of Damerjog.
”Discussions focused on the progress of the ongoing refinery and pipeline project between Djibouti and South Sudan, in particular via the industrial complex of Damerjog,” DPFZA stated on its statement.
Recently, South Sudan’s Refineries and Petrochemicals Company (REPCO) signed a land lease within Djibouti International Free Trade Zone (DIFTZ) for a period of 50 years to store oil equipment.
REPCO now owns 1.3 hectares of land in the free zone which will allow it to store materials and other products intended for the processing and extraction of oil before being transported by air or land to South Sudan.
Amplifying the road connectivity was also discussed and a Memorandum of Understanding (MoU) was signed between the two parties allowing the landlocked country to access ports in Djibouti for its import export via Ethiopia’s corridor.
The MoU will allow South Sudan to be connected to the rest of the world via the Ports of Djibouti through the road corridor. At this stage there are two corridors, Djibouti – Addis Ababa– Juba – Kampala and Djibouti – Addis Ababa -Gambella– Malakal, and one of which has already been used by Djiboutian transport trucks.
The delegation followed the pace with a working visit to Addis Ababa starting from September 21 with a similar three days visit. The visit was centered on logistics and infrastructure developments between the two countries in consideration of Djibouti as the major sea outlet for Ethiopian cargos.
The delegation also met Ethiopian Ministers led by Ahmed Shide, Minister of Finance to discuss various ways to enhancing infrastructure connectivity between the two countries.
The officials discussed and agreed on ways to enhance their previously designed plans in the areas of roads infrastructure, energy, telecommunications, water transportation, and other vital economic sectors with a view of creating integration for mutual benefits.
“As for the agreed projects, the projects will be operationalized and put in to considerations as soon as all the technical aspects are addressed,” Michael Makuei Lueth, Information, Communication Technology and Postal Services Minister said.
“Trade can be facilitated by Ethiopia through Djibouti corridor,” the South Sudanese minister stated.
Ahmed Shide also confirmed that the two sides have concluded a very important agreement in terms of advancing two road projects.
“The projects will be given utmost priority to open up transportation so that connectivity of South Sudan will be enhanced via Ethiopia through Djibouti corridor,” Ahmed said.
“These projects will be financed jointly and we have agreed to finalize the feasibility and preparations in terms of selecting contractors for the joint financing mechanism to be worked on,” Ahmed added.
In transport connectivity, river, fiber optics and transmission line connectivity has been agreed upon and the preparation to realizing the agreement will be commenced.
“We will work together on resource mobilization and reach out to development financial institutions,” Ahmed explained.
South Sudan mostly uses ports in Kenya and Sudan, while relatively ports in Djibouti will be nearer than the facilities in the other two neighboring nations.
The two parties have also agreed to work on the aviation sector.

LEAD, its successor to fly the firm even higher

By Metasebia Teshome
Ethio Telecom, under the timeframe of its BRIDGE strategy which spanned from 2019 to 2022 records marvelous results hitting well over 100 percent of its targets.
“BRIDGE strategy was designed to meet the market dynamism, reshaping and leading the company with a competitive mindset with the ultimate aim of making the company a preferred operator,” said Frehiwot Tamru, CEO of Ethio Telecom, on Monday September 26, 2022 whilst introducing the company’s new 3 year strategy ‘LEAD’ and the 2022/23 financial year plan to the media.
According to the CEO, through the implementation of the strategy, the company achieved 75.6 percent growth in customer base, 76 percent growth in revenue, a 104 percent growth in foreign exchange, 142 percent growth in net profit, and 125 percent growth in number of smart phones penetration across the country.
During the strategy period, the telecommunications firm had an 86% tariff reduction to increase its affordability and customer satisfaction with its 140 new and 166 revamped services.
As a succession follow up strategy, Ethio Telecom has now rolled out a new three year development strategy called LEAD, which is said to enable a thriving competitive market as the firm seeks to be a leader in digital solutions.
The development strategy, LEAD, is divided in three fiscal years from 2022-25. The first fiscal year 2022/23 has already seen implementations begin as from last month. The development strategy dubbed “LEAD” is believed to transform the state-owned telecom company into a competitive company.

“LEAD provides reliable communication and digital financial services to simplify life and accelerate digital transformation of Ethiopia,” said the CEO.
“Strategies are made to ensure competitiveness and sustainable growth of the company. The strategy has been developed by considering and reviewing new business streams and shifting revenue sources from traditional to value systems,” explained sources that Capital spoke to.
“The company has been using the BRIDGE strategy for the last three years which has been successful in transforming the company. However, it has now needed to change its strategy to LEAD, so as to continue its developments as a leading telecoms provider,” read the document sent to Capital, adding, “The Company has restructured its mission vision, values and strategic themes to go with the current telecom market.”
The three-year development strategy focuses on; being a leading brand, increasing customers base, excellence in operation, increasing accessibility and ensuring customer experience, deploying innovative and new products and services, and insuring the company’s successful operation.
In the first fiscal year 2022/23, Ethio Telecom plans to generate 75.05 billion birr in revenue which is 13.7 billion birr or 22.4 percent greater than 2021/22. The company plans to increase the total number of subscribers from 66.59 million to 73.47 million in 2022/23.
Consequently, the company aims to boost mobile penetration from 61.3 percent to 65.9 percent and the company hopes to increase its revenue from international business from 146.58 million dollars to 151.3 million dollars. In addition to the telecom service, Ethio telecom has planned to strengthen its telebirr share in the market by targeting to reach a customer base of 32 .6 million in 2022/23 from 20.9 million and also plans to gain 180.8 million birr in revenue from telebirr.
Ethio Telecom is currently engaged in various network expansion and telecom infrastructure capacity enhancement projects. The rollout of 4G/LTE has been completed in 136 cities and pre-commercial 5G services have been launched in Addis Ababa. Regardless of its current initiation and notable performance in expanding digital service for various sectors and high achievement in revenue earning, Ethio telecom is working to increase its capacity to every corner of the country in order to serve the people in good quality.
As part of expanding its income Ethio telecom has also plans to expand its services to neighboring countries in its three year LEAD strategy.