Ethiopia ranked 175th out of 191 countries on the Human Development Index (HDI) 2021/22, placing it in a low human development category.
The HDI which is a composite index measuring average achievement in three basic dimensions of human development, that is, a long and healthy life, knowledge and a decent standard of living, ranked Ethiopia 175th overall.
According to the report published this week, in 2021 the average value that Ethiopia had on the human development index was 0.498. Furthermore, Ethiopia had 65 years of life expectancy at birth on average while 9.7 was the expected years of schooling or 3.2 mean years of schooling. In 2021, the country’s gross national income per capital was set on 2,361.
According to the report, the human development measured the nation’s health, education, and average income which had declined for two years in a row, from 2020 to 2021, reversing five years of progress. This is in line with the global decline, indicated that human development across the world had stalled for the first time in 32 years.
Recent declines on the HDI are widespread, with over 90 percent of countries enduring a decline in 2020 or 2021.
Almost all countries saw reversals in human development in the first year of the Covid-19 pandemic, and most low, medium and high HDI countries saw continued declines in the second year.
The last two years have had a devastating impact on billions of people worldwide when crises like COVID-19 and the war in Ukraine hit back-to-back and interacted with sweeping social and economic shifts and dangerous planetary changes. The latest Human Development Report – Uncertain Times, Unsettled Lives: Shaping our Future in a Transforming World – which was launched by UNDP argues that layers of uncertainty are stacking up and interacting to unsettle life in unprecedented ways.
The COVID-19 pandemic, beyond its damage to people’s health and mental well-being, has also devastated economies and exacerbated gender inequality. For instance, gender inequality witnessed a near-global rise – to which the world suffered a 6.7 percent increase. South Asian economies like Bangladesh and Bhutan bucked the trend and registered an improvement. The report also suggests that stress, sadness, anger, and worry have been increasing over the last decade, now reaching record levels. On average, countries spend less than 2 percent of their healthcare budgets on mental health, which limits access to mental health services for citizens globally. Uncertainty, inequality, and insecurity go hand in hand with polarization and lack of trust. Polarization and mistrust t shrink our capacity for social dialogue and stifle collective action, the report read.
Globally, less than 30 percent of people think most people can be trusted, which is the lowest recorded value. The world as seen is not transitioning to a post-Covid-19 build-back-better scenario. On the contrary, developing countries in every region are entering a sharply divergent social, political, and economic period with especially sharp downside risks for the most vulnerable and regression in gender equality.
“The world is scrambling to respond to back-to-back crises. We have seen with the cost of living and energy crises that, while it is tempting to focus on quick fixes like subsidizing fossil fuels, immediate relief tactics are delaying the long-term systemic changes we must make,” said Achim Steiner, UNDP Administrator, adding, “We are collectively paralyzed in making these changes. In a world defined by uncertainty, we need a renewed sense of global solidarity to tackle our interconnected, common challenges.”
Ethiopia ranks 175 out of 191 countries on the Human Development Index
MFIs transition to banks triggers financial sector dips
The evolution of some dominant microfinance institutions (MFIs) to banks fizzle the number of MFIs in the sector.
Following the green light from the National Bank of Ethiopia (NBE), financial sector supervisory body, for MFIs to graduate to banks, the financial institutions are now changing their structure to provide fulfilled financial services.
So far Oromia Credit and Savings Institution, Amhara Credit and Savings Institution and Somali Microfinance Institutionhave been transformed to banks in the form ofSiinqee, TsedeyandShabelle banks; of which Shabelle is an interest free bank.
These three former MFIs had significant contributions in the sector, while as per the NBE rule they have to continue to provide financial service for the greater mass.
According to the NBE latest economic evaluation document that was reviewed in the third quarter of the 2021/22 fiscal year, following the transition of three MFIsto banks, the number of MFIs has declined to 37 in the reporting quarter.
Hence, their savings deposit declined by 44.6 percent to 26.3 billion birr compared with the previous quarter. Similarly, their total outstanding credit shrank by 40.1 percent to 35.2 billion birr while total asset dipped to 52.8 billion birr, showing a 43.1 percent quarterly decline.
Their total capital shrank by 47.4 percent to 11.6 billion birr compared to the preceding second quarter of 22 billion birr.
As of June 30, 2021 the five largest MFIs; Amhara, Dedebit, Oromia, Omo and Addis Credit and Savings Institutions accounted for 84.8 percent of the total capital, 88.8 percent of total deposit, 82.7 percent of total credit and 84.3 percent of total assets of MFIs.
In related developments, in the third quarter of the past fiscal year NBE’s deposit liabilities has surged by 42.6 percent compared to same quarter of last year due to a change in the Bank’s monetary policy to increase reserve requirement ratio from 5 percent to 10 percent, which was applied at the first quarter of the 2021/22 budget year and was effective with a three months transitional period.
However in the second week of June, 2022 the reserve requirements of banks were revised to be reduced to 7 percent, which is a new rate when compared to the preceding experience.
According to the NBE report that was issued last week, the expansion of the reserve requirement reached 149.8 billion birr which is an incline of39.9 percent compared with 107.09 billion birr of March 2021.
ESLSE’s Jigjiga vessel marks new record in containerized cargo
The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) vessel sets a new record on containerized cargo shipment to Berbera Port.
It is recalled that ESLSE’s vessels commenced regular scheduled liner service at the Berbera Port, Somaliland starting from July 2021.
The dock of the Ethiopian vessel was the first after 20 years. Since the commencement of regular operation, the Ethiopian vessels have been providing significant services to customers in the neighboring state.
As per the latest information Capital obtained from Roba Megeresa, CEO of ESLSE, the Jigjiga vessel, one of the 11 vessels ESLSE’s owns, has been docked at Berbera with a record of container consignment.
“Last week, Jigjiga docked at the Berbera Port with 758 Somaliland’s containerized cargos, which is a very huge consignment that was never serviced at the port not only by our flag carriers but also for those who are dominant on the global containerized cargo operation,” Roba explained.
The CEO reminded that his vessels had been transporting about 200 containerized cargos to Somaliland which have now been spiking as he stated, “This has immense meaning for the sector.”
“Our vessels market has widened,” he added.
Experts on the sector stated that operating with containerized shipment has been a lucrative business for the shipping lines.
Since ESLSE expanded its container box possession, it has stated that the operation of containerized cargo has expanded massively.
In the recently concluded budget year, ESLSE has increased its owned container by over three folds to reach 14,000 from about 3,000.
“Containerized cargo shipment is very profitable and has enabled us to change our bulk cargo vessels to operate with containerized cargo consignments,” Roba recently stated highlighting how the possession of boxes have become a game changer not only in serving cargos in Africa but also other new destinations.
Roba said that in related with the conflict between Russia and Ukraine and other factors, bulk ports in India have become congested, “Due to that transporting cargos with containers has become preferable. It is one of the reasons for the increment of containerized cargo which we are now handling.”
Ethiopian vessels have been transporting up to 11,200 metric tons of bulk cargo in a single voyage for the Somaliland market since it reintroduce its operation after two decades.
Jigjiga is a general cargo vessel that was built in 2013 sailing under the flag of Ethiopia with a carrying capacity of 28,084 DWT, which is similar for other general cargo vessels ESLSE operates.
The public enterprise has also two tankers that mostly provide lease services for other operators.
In the 2021/22 budget year, the Ethiopian vessels made a mark on cross trade services amplifying the performance of ESLSE, a sole flag carrier in Africa.
In the budget year, the vessels that were operated by ESLSE were in good condition to carry out cabotage services for cargos in neighboring African ports.
The logistics service provider managed 7.2 million metric tons of import/export cargos in the budget year despite global challenges with some expected incoming cargos having reduced.
In the budget year that ended on July 7, the vessels that were operated by ESLSE were in good condition to carry out cabotage services for cargos in neighboring African ports.
A couple of weeks ago, Roba said that through the cabotage operation scheme, the export cargos from Massawa of Eritrea, and containerized cargo of Djibouti have been transported by ESLSE vessels, besides providing regular service for bulk and containerized import cargos to Somaliland.
The logistics giant has also embarked on an initiative to connect Mombasa (Kenyan port) to other destinations with Ethiopian vessels, and has currently a fleet to other ports in the southeast coasts of African countries like Tanzania and South Africa besides some sort of voyage to western African nations.
The cabotage initiative has allowed the Ethiopian vessels to be a major revenue and hard currency sources for the Ethiopian enterprise.
“The cross trade operation at some point is a good strategy for ESLSE to widen its presence besides a significant hard currency generation for the enterprise,” Roba said.
In the budget year, the vessels that ESLSE operates have contributed to generate 1.8 billion birr, “The vessels have become profitable for the first time.”
“One of the major reasons for the best performance of our vessels was the cross trade,” Roba explained.
ESLSE has also concluded its process to add two more vessels that will be built in two years time once the contract is sealed.
This time around, the vessels will be supramax bulk carriers, which is highly preferable in managing bulk cargo at high volumes in the global market. As a result, there are huge expectations for an upward trend in the coming years, as the logistics giant upgrades from the current ‘Handysize’ general cargo vessels.
School supplies soar in pricing as New Year dawns
Cost of school supplies touches sky highs as preparation for the new academic year meets most families in tough times.
Shortage of foreign currency, lack of input materials and other factors has in recent times created the increased prices of school supplies.
The market for exercise books and education materials has steadily been on the rise for the past eight years in the stationeries across the country.
There are two kinds of exercise books in the market- the laminated and the non-laminated, with more buyers preferring the laminated ones because of durability, sellers explain. “The price of exercise book is increasing significantly within a short time,” said one seller that Capital spoke to at an Exhibition center recently.
“A few years back, the wholesale price of a single exercise book used to be around 10 birr, while now that narrative has changed to up to 80 birr. Distribution and supply of education materials is limited in the market resulting in the inflated pricing,” the seller further elaborated.
The high cost was created by the shortage of exercise book that came following foreign currency shortages. “It is a little bit harder to find foreign currency from the banks,” said sources from one of the private paper manufacturing companies indicating that some manufacturers are cutting their production and operating below their capacity whilst looking up to government for support.
As Abeba Tamene, head of public relations and communication at the Ministry of Industry said, “The Ministry doesn’t have such in-depth information on the situation. However, the ministry will try to evaluate the case.”
Fortunately, parents do not have to buy text books as the government provides for those who attend public schools. The private school students do buy books for only a little above the price that the schools buy from the government, adding the transportation cost they incur.
Same as exercise books, the price for other school items is higher than ever. Other school items that are in high demand during the holidays are school bags and uniforms. School bags sell for 1000 to 6000 birr at the exhibition.
Another market associated with the coming academic year is the uniform market.
“Our markets boom in between the months of July and September, and we are currently in preparation for this,” one trader explained, signaling that prices in the uniform market still remain high.
