Wednesday, April 1, 2026
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Natnael Abera

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Name: Natnael Abera

Education: Diploma in electricity

Company name: Dream Light Electric and Installation Works

Title: Owner

Founded in: 2019

What it do: Provide buildings with energy

Hq: Addis Ababa

Number of Employees: 3

Startup capital: 10,000 birr

Current Capital: Growing

Reason for starting the Business: To be financially independent

Biggest perk of ownership: Always learning

Biggest strength: Keeping up my dreams even in hard conditions

Biggest challenge: Awareness

Plan: To expand my business

First career: Electrician

Most interested in meeting: No one

Most admired person: No one

Stress reducer: Time with myself

Favorite past time: Working

Favorite book: Scientific books

Favorite destination: Japan

Favorite automobile: Mercedes Benz

Keep your head cool

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A few months ago, I participated in an annual walking event in The Netherlands. This is a 4 day’s walking challenge, during which you walk 30, 40 or 50 km each day. Some 35000 people participate, including scores from other countries. The start and finish are always on the same place in the centre of the city of Nijmegen, but the walk follows a different route each day. Those who do the 50km begin as early as 5am, while the 40km and 30km walkers start later, the last group at 7.45am.
I registered for this event over two years ago but because of Corona, the 2020 and 2021 editions were cancelled. I opted for the 30km and together with my wife we practiced weeks in advance to make sure I was fit enough to do it.
So, this year, the city made itself ready again and everybody got excited as the walk is surrounded by lots of cultural and musical performances. You can imagine the economic boost for the city as 35000 walkers and their supporters come and visit for almost a week.
The weather forecast was a bit worrying though. The first day it promised to be very warm, like 38 degrees centigrade, which is too high especially in the Dutch humid climate. The organising committee decided therefor to cancel the first day as they assessed the risk of medical emergencies too high.
The second day, the temperatures were expected to be lower, although still well in the 30-35 degrees centigrade range. Everybody was excited at the starting line to begin the long-awaited challenge. So, off I went with the third in line starting group. I soon learned to keep my own pace, as some walk fast, some slow, some in a group, some alone. There were many supporters along the route with music, snacks, water, and places to take a rest. The deadline to cross the finish line was 5pm, in principle allowing enough time to make it. A special app allowed myself but also my followers to see where I was and what progress I was making. I did rather well, and around noon I had done 20km when my wife met me and joint me for the last 10km. Making sure I ate and drank enough, we went along. As we came closer to the city again, I noticed some participants sitting down and having a difficult time coping. Entering the city, where it felt a lot warmer than in the countryside, I began walking slower and slower. My wife noticed, took me aside to rest a bit and eat an ice cream for some cool energy. Too late! I began to feel sick and had to lay down, while she continued to poor water over my head, which was the right thing to do. The heat was having its effect on me after all! Some first aid volunteers spotted me and came to check on me. They took out some icepacks and held them against my forehead and in my neck. It felt good and slowly I started to feel better again. After half an hour I had cooled down and felt fit enough to complete the last few kilometres. We crossed the finish line well in time and were ready to enjoy the evening and get ready for the next day. The second day was completely the opposite as it rained. Now there was a risk of hypothermia! However, we had good rain jackets and made it well in time, while the rain had no negative effect on the mood of both walkers and spectators. The third day was a pleasant warm and dry day, the perfect conditions to complete the challenge. Now it was party time!
But what has all this then to do with doing business? Well, the importance of keeping your head cool! We all see top athletes pouring water over their head and in their neck while completing a marathon or a cycling race. That is what I should have been doing myself, cooling the temperature control centre in the brain, which would have prevented me slipping into a mild heat stroke.
This is what the saying Keeping a Cool Head is derived from I suppose, meaning to stay calm in a difficult situation. There are even biblical refences to this principle, for example in 1 Peter 5:8:
Keep a cool head. Stay alert. The devil is poised to pounce and would like nothing better than to catch you napping.
Well, many of us face hard times indeed and it is not easy to stay calm always in difficult situations. The environment of doing business is not that conducive, impacted by financial constraints, inflation, shortage of hard currency – making it difficult to import materials, ingredients, equipment, and spare parts – frequent interruption of utility services like water and electricity, conflict, and the global energy crisis. Prices of common food items have doubled over the past year or so and there is no indication this will reverse. Meanwhile wages remain the same.
Plenty of reasons in other words, to get upset, angry, frustrated, and emotional.
In her blog, Dale Allen, CEO of ConsciousLead, writes the following and I quote: “Emotions can cloud our judgement and impede our leadership abilities. Keeping our emotions in check – or keeping a cool head – is a vital skill for managers and business executives.There’s no escaping that our emotions can get the better of us from time to time. Colleagues are going to upset us, bosses are going to make decisions that seem unfair, and clients are going to push our buttons. The conscious leader knows when to step back from an issue. She suggests to find yourself a quiet place and take your time to develop the most accurate description of your feelings. Explore words like angry, upset, frustrated, sad, disgruntled, etc. to find the best. You don’t need to tell anyone or write it down or say it out loud, just create a precise acknowledgement of how you feel. The process allows the different parts of your brain to work in unison to find the perfect balance of language, meaning and emotion. When that balance is found, take a couple deep breaths and you’re ready to face the world!” End of quote.
In conclusion, yes, these are difficult times during which our emotions are tested to the max. Not taking a step back and allowing a particular situation to cool down, may result in us functioning less well and failing to face the challenge. Just like my body began failing to keep going in the heat, we will begin failing to lead and manage effectively. So, we need to make sure that we consciously keep our head cool!

Ton Haverkort
ton.haverkort@gmail.com

The emergence of modern socialists

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Throughout most of American history, the idea of socialism has been a hopeless, often vaguely defined dream. So distant were its prospects at midcentury that the best definition Irving Howe and Lewis Coser, editors of the socialist periodical Dissent, could come up with in 1954 was this: “Socialism is the name of our desire.”
That may be changing. Public support for socialism is growing. Self-identified socialists like Bernie Sanders, Alexandria Ocasio-Cortez and Rashida Tlaib are making inroads into the Democratic Party, which the political analyst Kevin Phillips once called the “second-most enthusiastic capitalist party” in the world. Membership in the Democratic Socialists of America, the largest socialist organization in the country, is skyrocketing, especially among young people.
What explains this irruption? And what do we mean, in 2018, when we talk about “socialism”? Some part of the story is pure accident. Corey Robin, Professor of Political Science at Brooklyn College and the City University of New York Graduate Center stated that in 2016, Mr. Sanders made a strong bid for the Democratic presidential nomination. Far from hurting his candidacy, the “socialism” label helped it. Mr. Sanders wasn’t a liberal, a progressive or even a Democrat. He was untainted by all the words and ways of politics as usual. Ironically, the fact that socialism was so long in exile now shields it from the toxic familiarities of American politics.
Another part of the story is less accidental. Corey Robin noted that since the 1970s, American liberals have taken a right turn on the economy. They used to champion workers and unions, high taxes, redistribution, regulation and public services. Now they lionize billionaires like Bill Gates and Mark Zuckerberg, deregulate wherever possible, steer clear of unions except at election time and at least until recently, fight over how much to cut most people’s taxes.
Liberals, of course, argue that they are merely using market-friendly tools like tax cuts and deregulation to achieve things like equitable growth, expanded health care and social justice which are the same ends they always have pursued. Kevin Kelly of Wired Magazine explained that for decades, left-leaning voters have gone along with that answer, even if they didn’t like the results, for lack of an alternative.
Socialism means different things to different people. For some, it conjures the Soviet Union and the gulag. For others, Scandinavia and guaranteed income. But neither is the true vision of socialism. What the socialist seeks is freedom.
John Altman, an American analyst argued that of under capitalism, people are forced to enter the market just to live. The libertarian sees the market as synonymous with freedom. But socialists hear “the market” and think of the anxious parent, desperate not to offend the insurance representative on the phone, lest he decree that the policy she paid for doesn’t cover her child’s appendectomy. According to Kevin Kelly, under capitalism, people are forced to submit to the boss. Terrified of getting on his bad side, people bow and scrape, flatter and flirt, or worse just to get that raise or make sure they don’t get fired.
John Altman further noted that the socialist argument against capitalism isn’t that it makes people poor. It’s that it makes people unfree. When our well-being depends upon their whim, when the basic needs of life compel submission to the market and subjugation at work, we live not in freedom but in domination. Socialists want to end that domination: to establish freedom from rule by the boss, from the need to smile for the sake of a sale, from the obligation to sell for the sake of survival.
Listen to today’s socialists, and we will hear less the language of poverty than of power. They invokes the 1 percent and speaks to and for the “working class”, not “working people” or “working families,” homey phrases meant to soften and soothe. The 1 percent and the working class are not economic descriptors. They’re political accusations. They split society in two, declaring one side the illegitimate ruler of the other; one side the taker of the other’s freedom, power and promise.
Kenny Malone, economic analyst of Planet Money stated that like the great transformative presidents, today’s socialist candidates reach beyond the parties to target a malignant social form: for Abraham Lincoln, it was the slavocracy; for Franklin Roosevelt, it was the economic royalists. According to Kenny Malone, the great realigners understood that any transformation of society requires a confrontation not just with the opposition but also with the political economy that underpins both parties. For Lincoln in the 1850s confronting the Whigs and the Democrats, that language was free labor. For leftists in the 2010s, confronting the Republicans and the Democrats, it’s socialism.
To critics in the mainstream and further to the left, that language can seem slippery. With their talk of Medicare for All or increasing the minimum wage, these socialist candidates sound like New Deal or Great Society liberals. There’s not much discussion, yet, of classic socialist tenets like worker control or collective ownership of the means of production.
And of course, there’s overlap between what liberals and socialists call for. But even if liberals come to support single-payer health care, free college, more unions and higher wages, the divide between the two will remain. Danielle Kurtzleben, another economic analyst of Planet Money explained that for liberals, these are policies to alleviate economic misery. For socialists, these are measures of emancipation, liberating men and women from the tyranny of the market and autocracy at work. Back in the 1930s, it was said that liberalism was freedom plus groceries. The socialist, by contrast, believes that making things free makes people free.
According to Danielle Kurtzleben, it’s also important to remember that the traffic between socialism and liberalism has always been wide. The 10-point program of Marx and Engels’s “Communist Manifesto” included demands that are now boilerplate: universal public education, abolition of child labor and a progressive income tax. It can take a lot of socialists to get a little liberalism: It was socialists in Europe, after all, who won the right to vote, freedom of speech and parliamentary democracy. Given how timid and tepid American liberalism has become, it’s not surprising that a more arresting term helps get the conversation going. Sometimes nudges need a nudge.
Still, today’s socialism is just getting started. It took Lincoln a decade plus a civil war, and the decision of black slaves to defy their masters, rushing to join advancing Union troops to come to the position that free labor meant immediate abolition.
In magazines and on websites, in reading groups and party chapters, socialists are debating the next steps: state ownership of certain industries, worker councils and economic cooperatives, sovereign wealth funds. Once upon a time, such conversations were the subject of academic satire and science fiction. Now they’re getting out the vote and driving campaigns. It’s too soon to tell whether they’ll spill over into Congress, but events have a way of converting barroom chatter into legislative debate.
As Corey Robin noted, socialism is not journalists, intellectuals or politicians armed with a policy agenda. As Marx and Engels understood, this was one of their core insights, what distinguished them from other socialist thinkers, ever ready with their blueprints, it is workers who get us there, who decide what and where “there” is. That, too, is a kind of freedom. Socialist freedom.

Bank mergers in Ethiopia: inevitable or avoidable?

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Since the government expressed its intention to open the financial market to foreign providers, one of the hotly discussed topics has been the weakness of domestic banks to withstand the ensuing competition from their foreigner counterparties. This narrative is followed by a proposition for their merger towards creating fewer numbers of larger banks. On many occasions National Bank authorities have indicated merger among the existing providers to be desirable, if not inevitable. Is merger the only survival mechanism for Ethiopian banks post opening of the market? Not necessarily for all. While most of the small banks may have difficulty to cope with the changing financial market without merger, especially after entry of foreign players, a few of them can avoid unwanted consolidation.
It is true that Ethiopian banks are small in comparison to some of their African counterparts. According to the 2021 Banker Magazine of the Financial Times, only 2 of the top 25 African banks have a tier-1 capital of less than a billion USD (Banque du Cairo and First Bank of Nigeria). While South Africa and Egypt have each six of these big firms, Nigeria and Morocco respectively claim five and four places. The remaining four are from Kenya (2), Mauritius and Togo. Another report, African Business of 2021 provides a slightly different rank without segregating the tier 1 capital structure. In this later report the Commercial Bank of Ethiopia takes 26th place with a total capital of USD 1.173 Billion and an asset of USD 23.849 Billion. In this ranking which lists 100 biggest African banks Awash Bank is the only private bank from Ethiopia that comes at the 83rd place with a capital of 243 million USD. All the three big Ghanaian banks come after 87th rank, while none is listed from Uganda, Tanzania, DRC or the Sudan-countries that have opened their markets to foreign banks long ago. In a way, this indicates that it is possible to open the banking market even if a country doesn’t have big domestic players.
Nevertheless, by these standards Ethiopian banks are rather small in size. If Ethiopia wants its banks to become competitive, encouraging the emergence of bigger entities is necessary. I don’t mean to suggest that size of capital is the only determinant of success in competition. Technological and human resource development is as important. However, capital base is a key consideration as it enables companies to acquire the other key factors of success. If so, organic growth by raising capital from internal sources will not be fast enough since foreign banks are knocking at the gates. The quicker way is merger of existing firms and the emergence of a handful of big players.
Indeed, bank mergers will be desirable, but not necessarily inevitable. Thus, there should not be any compulsion to force consolidation. If anything consolidation in the sector should be voluntary. Forced bank mergers are said to have occurred in India and Malaysia among others. In India the forced merger applied to the various state owned banks (regional and central state banks). In effect the element of compulsion was not there strictly speaking since the state that adopted the policy of consolidation in the sector was the owner of these banks. These mergers did indeed create giant banks, but it was widely reported that these consolidations did not result in efficiency gain in service quality, cost effectiveness or profitability. In Malaysia, forced mergers between private banks resulted in consolidating 71 institutions into 10 mega banks. However, subsequent studies indicated that only two out of the ten resultant mega banks showed improvement in cost efficiency. From profitability point of view, none of the banks experienced significant difference in profit efficiency level after the merger exercise.
In contrast Nigeria’s voluntary merger resulted positively both in terms of operational efficiency and profitability. Nigeria policy was not to force consolidation, in as much as it didn’t select the anchor banks and the targets, and instruct them to converge. This is in marked contrast to Malaysia which seeded the 71 banks into anchors, subsidiaries and targets. Nigeria’s central bank raised the minimum capital to 25 billion Naira only (in today’s rate roughly less than 4 billion ETB), and left the decision to consolidate to the institutions.
The direction Ethiopia’s NBE is taking seems to be similar with Nigeria’s. It has raised the minimum capital for bank formation to 5 billion ETB, and has been constantly stressing the need for consolidation in the sector. For a good number of the existing banks consolidation is unavoidable. A few of them have already surpassed the 5 billion thresholds, and can avoid mergers. Most of these also have huge legal reserves accumulated throughout their profitable years. These reserves can be converted into equity in as far as Ethiopian law allows such an exercise. However this option is a non starter for smaller and newer banks. Therefore, it is only a matter of time for the new entrants and those that could not muster the minimum 5 billion to converge.
However consolidation is easier said than done. Especially, in the Ethiopian financial sector regulatory environment and market practice there appear many barriers to mergers. A few of the challenges can be lack of experience, regulatory challenges, and possible management resistance.
First there is acute dearth of experience of mergers and acquisitions in the corporate culture in Ethiopia. To begin with, in corporate law parlance, the word merger represents three different procedures, i.e., amalgamation, acquisition and takeover: 1) amalgamation-the full combination of two entities to create one new entity; 2) acquisition-the full absorption of one entity by another; and 3) takeover-the acquisition controlling shares by one company in another. The call for consolidation in the financial sector refers to the first two only. Looking at the experience of the market, in Ethiopia amalgamations and acquisitions involving share companies with dispersed ownership are very few and far between. Most capital restructurings hitherto reported as mergers are simply takeovers, and of no useful lesson to what is being contemplated in the banking sector. If anyone thinks that the Commercial Bank of Ethiopia’s acquisition of Construction and Business Bank as an important source of experience, they will soon be disappointed. That was merely a process of a sole owner (the state) merging its two properties. Perhaps the only known experience one can mention is the acquisition of Raya Breweries by BGI a few years ago.
However, merger in the banking sector will not be so easy as the acquisition of Raya by BGI because of the structure of share ownership. Financial institutions are widely held mainly because the NBE requirement limits the maximum holding to just 5%. In fact, NBE’s policies tended to discourage concentration of ownership by placing stringent requirements for influential shareholders having stakes above 2%. However, the dispersion of ownership will come back to haunt the initiative for consolidation. This will prove a regulatory barrier. The fact that both the bidders and the targets are companies with dispersed ownership will make merger transactions complicated in the financial sector. This means diffuse shareholders at both sides should be convinced of the merits of the transaction. The new commercial code clarifies the procedures, but that doesn’t mean it will be easy. What is more, some of these institutions mean more than just business because they carry ethnic representations. Imbued in their value is their appeal among their respective ethnic or religious communities. Thus, while mergers should be rational market decisions, mergers between institutions carrying differing ethnic symbolism may appear to be unholy marriages. This will limit the menu both for bidders and targets. In other words, if you are bank A, you can’t bid to acquire bank X, because bank X symbolizes a different ethnic community. This will make merger transactions further complicated. Even if there are a few non-aligned banks; and their choices both as bidder or target will be likewise, limited to the non-aligned groups.
In view of the mechanics of effectuating mergers the selection between amalgamation and acquisition needs careful considerations. Amalgamation is more disruptive and complicated than acquisition. It disrupts the operation of all the entities participating in the transaction, and until the new entity is created with its bosses identified business operation will be slowed if not interrupted. Acquisition will be less disruptive, and more straightforward. It can be cash-for-shares acquisition (the bidder increases its capital and uses the proceeds to pay the shareholders of the target; the target disappears, its shareholders go, and assets of the target become assets of the acquirer). Or such an acquisition can be share-for-share transaction (the bidder exchanges x number of its shares for y number of the target’s shares. The target’s disappears, but its shareholders are allowed to remain shareholders of the acquirer, except those that reject the proposition which will be forced to leave taking cash compensation.)
Thirdly, like in all other countries there will be managerial barrier. Executives at target companies are natural obstacles to mergers. This is especially true in companies with diffuse ownership like in Ethiopian financial institutions giving senior management and the board effectively full control of major decisions. Even if the decision on mergers is theoretically made by the shareholders’ meeting, practically it is only the management/board that can initiate such decisions. Minority shareholders can initiate decisions under the new commercial code, but the management/board can always dissuade the general meeting from taking any decision it doesn’t favor. So much so that, mergers that the management doesn’t like have less likelihood of success. Target management disfavors acquisitions because it means loss of position. In other countries the market for corporate control has long introduced effective remedies for hostile target management such as golden parachutes, golden handshakes, etc. Under such arrangements, target management is paid generation compensation for job losses from the mergers. In fact most senior management employment contracts will have such clauses. It is not clear how many of bank CEOs in Ethiopia contemplated job losses from mergers and included such clauses in their employment contracts. Nevertheless, such clauses can be useful in as much as they can remove one of the potential barriers against consolidation in the financial sector. Post merger integrations are also problematic because each institution will have its own corporate culture.
Way forward
Where does all this leave us? Merger of banks is not necessarily a must for all. Some can avoid mergers. Older banks that have surpassed the minimum capital threshold of 5 billion can withstand the threat of merger. First of all, most of these have accumulated legal reserves which they can easily convert into equity. Second most of these institutions have assets in real-estate, and other investments. Newer ones don’t have that luxury, and must plan for merger.
The NBE should take the initiative and support them in providing guidelines, trainings and coordinate knowledge/experience sharing. In as far as compulsory mergers can’t be effective, guidelines will be more appropriate than directives. Such guidelines should explain procedures, identify issues of valuations and indicate possible methods of solving such issues. If the NBE decides to issue directives, such an instrument should not enforce compulsory mergers. A directive can be issued to clarify as to how merger can take place, how cash-for-share or share-for-share acquisitions can be made, how disruptions can be minimized during such transactions, disclosure and due diligence matters, etc. To ensure the optimum success of the consolidation program, in particular the post consolidation integration issues, there is the need for the NBE to sponsor training programmers’ on post-consolidation integration and corporate culture conflict management. This would assist to mitigate conflicts associated with consolidation, thereby facilitating the sustainability of the merged institutions.
Coordinating experience sharing with foreign counterparts can provide key lessons. Ethiopian financial industry is probably unique because of dispersion of ownership and the presence of ethnic elements in some of the players. May be it is hard to find parallels for such elements in other countries. Yet, the experience of financial institutions in other countries can give us useful lessons. Bank mergers either market driven or policy driven such as that being contemplated in Ethiopia has occurred in many countries. Why not learn from them and avoid the errors they made and capitalize on the positives?

Fekadu Petros is Managing Partner at Fekadu Petros & Partners Law Office