Ethio telecom and Hybrid Designs PLC sign agreements to enable customer’s access to telecom products and services through Ride transport service.
The agreement is said to integrate telecom and telebirr services with the RIDE transport service to meet the ever growing demand of the customers on telecom products and services accessibility and optional payment platforms, thereby providing fast and secure alternative services to customers.
In line with the agreement, in addition to getting settled transport service charges via telebirr, Ride transport serving drivers will serve as telebirr agents and will engage in collecting monthly ethio telecom and utility bill payments, registering new telebirr customers, upgrading telebirr customer levels, providing cash in and cash out services, airtime, packages and new SIM cards sales, providing SIM replacement services to customers along with providing many other package delivery services to customers on behalf of Ethio telecom.
Telebirr has now 19.4 million subscribers, more than 82 master agents, over 69 thousand agents and more than 18 thousand merchants within a short span of time. In addition, the platform has been integrated with 12 banks to transfer money from bank to telebirr and with 10 banks to transfer money from telebirr to bank, with over 18.7 billion-birr transactions made so far.
RIDE integrates telebirr as payment option
Linking investors to Ethiopia’s promising SMEs
New venture to hunt market investors that are now opening like the continental free trade, and potential partners globally for 500 Ethiopian SMEs is established.
As per the deal, Premier Investment Consults and Behak Multimedia agreed to hunt market and investors from across the world for the best 500 Ethiopian small and micro enterprises (SMEs) engaged in manufacturing of high-quality goods.
“The main objective of this partnership is to select best products manufacturing SMEs in Ethiopia, produce branding materials, and promote them globally. The ultimate goal of producing branding materials and global promotion campaign is to help these SMEs find additional market, and finance from around the world,” said Woubishet Sissay, Project Coordinator at BEHAK Multimedia PLC.
The branding materials being produced includes the production of print and digital versions of ‘Ethiopian Products Catalog 2022: Promising 500 Manufacturing SMEs Looking for Market, and Investors’, according to Woubishet. “After the production of these and other branding materials, a 365 days digital marketing campaign will be launched globally,” he said.
“The joint program we launched with BEHAK is a very ambitious one that may require us a few millions of dollars to execute it,” says Melaku Kinfegabriel, General Manager of Premier Investment Consults, a certified business advisory firm, which has been in business in Ethiopia for years.
“Meanwhile we shouldn’t ignore the challenges of the SMEs in Ethiopia just because supporting them is costly. Or leave everything hoping that someone else or the government may one day address their challenges,” he said.
“We believe that even with our limited resources, we can help the SMEs to utilize the opportunities they are currently missing out at continental and global level,” said Melaku, stressing that the intention of the partnership is to strengthen the capacity of the promising SMEs of Ethiopia engaged in manufacturing high quality products benefit from the African Free Trade Area (AfCFTA), and other market opportunities.
“In fact, the promise and encouragement we are now getting from domestic and foreign partners, including big businesses in Ethiopia, NGOs and development partners, is giving us the energy to move forward,” he added.
Leather products, garment including traditional cloths and handcrafts like jewelries, agro processing, metal engineering, furniture, and construction materials are the sectors that would get priority as per the new scheme.
According to the plan local industries would be also supported by the scheme to get alternative financial supports from different financial institutions.
Ethiopian airlines tops Africa in digitalization
Ethiopian airlines announce digitalization of its Maintenance, Repair and Overhaul (MRO) facility.
The renovation makes Ethiopian airlines MRO the first in Africa and one of the few organizations next to Qantas and KLM in the world to have a digitalized hangar and line task accomplishment.
The project has been effective since August 2021 with the stabilization phase now being completed. After monitoring the results, the airline has started to fully implement the digitalization in all the hangars and line maintenance. On Wednesday, May 25, 2022 the Ethiopian airlines officially announced the implementation with the presence of high management team of the airlines.
“This is a major achievement and milestone for Ethiopian airlines,” said Mesfin Tasew, CEO of the airline group adding that the conversion of the repair center to a digital one will save the airline 500 million birr which is often spent on paper and manpower every year.
Experts’ weigh in on financial sector liberalization
Financial pundits offer high praises on the stretch way to opening up of the financial sector, as phased based liberalizations is advised by majority.
Experts that expressed their views on the latest edition of the iCapital Institute’s financial summit that gathered different stakeholders from the country and abroad said that the sector opening up would have both positive and negative outcome on the local actors, however appreciated the government decision.
Melaku Kebede, President of Hibret Bank and part of the speakers on the panel session under the title: ‘the impact of liberalization of the financial sector in Ethiopia’, said that the opening up of the financial sector would have multiple effects on the industry.
“For me it has a positive impact to the banking industry, at the beginning we might have some challenges like the experience that we had in Kenya 20 years back but later on I strongly believe that the local banks will have local trust,” he said.
Yared Molla of Nyala Insurance has also supported the idea of opening up of the sector for more competition, by reminding that the insurance business is by default an international business, “we all need to support the opening up of the industry, since already 16 percent or more than that of our businesses is being covered by the international insurance insurers.”
Experts said that the sector liberalization shall follow some processed path by adopting the experience of others in order to realize better outcomes on the decision.
“Let’s say that entry should not be like what happened in certain countries in the past. I think the two countries that are most mentioned are Philippines and Argentina in their overnight liberalization of the whole sector. The financial sector is a sensitive sector. Even when untapped a nation has to have some degree of control over its financial sector,” Zafu Eyesuswork, prominent expert on the industry said, adding, “Resources are to be directed in priority sectors of development.”
“Well thought out, planed, phased and sequenced liberalization. Let’s allow non-Ethiopians to invest in Ethiopian financial sector companies. Let’s say up to some percentage for some given years and after that the capital market will do its job,” Zafu expressed his views.
He added that the process will be followed by players buying and selling their shares, while in the coming years the smaller banks which cannot afford to fulfill the requirements may come together for mergers and acquisitions.
Yared said that the opening up of the industry is a very important issue, but it has to undergo a step by step and phased approach, “we don’t have to just invite everyone and every aspect to the industry. For instance, it’s better first to introduce life insurance because we are not good at life insurance. We have a broken track record on it.”
Yared welcomed the idea of competition whilst he opined, “it is even good for customers.”
“We should not forget that those foreign banks will have their own strategy to work together with local banks which will bring certain capital increase, technology adoption and also advancement in human capital,” stated Melaku.
He added that this phenomenon will affect private bankers and government central bank and policy banks.
“For private banks it’s rather an opportunity that would create a good competitive platform because it was closed for a long period of time,” Melaku said, adding, “some of them have contacted us, with preference of working collaboratively as opposed to a stand-alone operator.”
In his view more challenge shall be seen on policy banks that are protected by the government on different instruments against private players.
“I expect more challenges will come to the government’s center bank and those policy banks. I would say the central bank has to manage somehow the mindset, the capability and the like. Government banks might need also sometime to bring new ideas from others,” Melaku explained.
Zafu also recommended the formation of a centre of excellence that would help the sector to be fit on the way to be a part of the global players.
With regards to the establishment of the Ethiopian Institute for Financial Studies as a center of excellence for the country, Zafu mentioned that it was proposed to the National Bank of Ethiopia (NBE) a year ago, “We submitted the preliminary concept note to the governor of NBE in May 2021.”
“We should have it since it will serve as a PPP product. We have to start it,” he stressed.
Belay Tulu, Director of Insurance Supervision Directorate at NBE, recommended local players to be prepared for the upcoming new phenomenon but declined to give the timeline when the sector is going to be opened, “I don’t think it would take too much time, but it’s not the right time for me to advise the insurance what to do and what not to do while our guests prep themselves to join the market.”
“In any case, the first thing is to draw a realistic strategy. So we need to understand the urgency and every company has to make the right decision and draw realistic strategies. I don’t want to go through into the details but it’s time to think about that, is the major concern of every company and it is also applies for the insurance supervision, we have to be prepared,” Belay said.
Frezer Ayalew, Director for Banking Supervision Directorate of NBE, on his part said that all players in the ecosystem have to prepare “for those different strategies and the mechanisms.”
Yet no decision has been made on the timeline of liberalizing the sector and the entry modality for foreign investors.
Hibret Bank president said, “I would say it will be ideal for the roadmap to be laid down for the sector opening up.”
He added that the banking sector has to be ready including the consideration of mergers to create a synergy.
“The issue of consolidation of banks if when the market is liberalized, I think it all depends on the entrance modalities that the government is going to act through,” the Hibret bank head opined.
“I don’t think that the government will adopt the kind of modality where the local banks will be wiped out by international competitors,” Frezer said.
Richard Ketley, Director of Genesis Analytics who came from South Africa, shared his view about the impact of the financial sector liberalization by showing the experience of other African countries.
He said that increased competition mainly on high value corporate clients shall be seen when the sector is opened, while collaboration can become an opportunity especially for well established institutions with large networks.
According to Ketley, technological dynamism and merger and acquisitions shall be seen on the way to include global players on the sector.
