Africa’s coffee export registers reduction as of May while on the flipside Ethiopia’s export gained about a fifth increment in comparison to a similar period of 2021. Globally, coffee prices have shown a 4.5 percent gain in June.
The International Coffee Organization (ICO), an intergovernmental organization for the bean, through its monthly coffee market report indicated that some enhancement has been recorded in the June trading as compared to the preceding month which registered the lowest rate in the coffee year that started in October.
The monthly report stated that the ICO Composite Indicator Price (I-CIP) gained 4.5 percent from May to June 2022, averaging 202.46 US cents/lb (lb/ pound is roughly 0.45 kg) for the latter.
The I-CIP had lost 2.4 percent from April to May 2022, averaging 193.71 US cents/lb for the latter and average prices for all groups indicators decreased in May 2022.
In June 2022, the I-CIP fluctuated between 197.37 and 206.40 US cents/lb.
On its review, the market report added that the average prices for all groups indicators increased in June 2022, “the arbitrage between New York and London Futures markets developed an 8.5% increase, ranging from 124.30 to 134.90 US cents/lb from May to June 2022.”
It said that global exports of green beans in May 2022 totaled 9.75 million 60-kg bags, compared with 8.8 million bags in the same month of the previous year, up 10.7 percent.
Total exports of all forms of coffee were up 10 percent in May 2022, totaling 10.8 million bags, while in the first eight months of coffee year 2021/22 they reached 87.99 million bags, with a consolidated increase of 0.7 percent.
The report that has also classification on exporting areas and countries indicated that exports from Africa decreased by 0.9 percent to 1.29 million bags in May 2022 from 1.3 million bags in May 2021.
“For the first eight months of the current coffee year, exports totaled 8.65 million bags versus 8.82 million bags in coffee year 2020/21,” it said adding, “Uganda’s exports have continued to fall, decreasing by 7.9 percent in May 2022 and 4 percent in October 2021–May 2022, as compared with the same period a year ago.”
Lower production stemming from droughts in some areas of the country’s coffee-growing regions also continues to explain the fall in Uganda’s exports of coffee.
Tanzania’s exports are also down 3.6 percent in the first eight months of coffee year 2021/22 at 0.78 million bags as compared with 0.8 million bags in the same period last year, “meanwhile, exports from Ethiopia increased to 2.28 million bags in the same period, representing a rise of 18.9 percent from 1.91 million bags.”
For the ended budget year Ethiopia exported 300,000 metric tons of coffee which is the highest volume ever in the sector trading history.
The reporter added that world coffee consumption was still projected to grow by 3.3 percent to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is expected to exceed production by 3.1 million bags.
Global exports of green beans in May 2022 totaled 9.75 million bags, compared with 8.8 million bags in the same month of the previous year, up 10.7 percent. Three of the four groups also increased their exports in May 2022. Despite the double-digit increase in May, for the first eight months of coffee year 2021/22, exports of green beans totaled 79.24 million bags, up only 0.2% versus 79.09 million bags for the same period in coffee year 2020/21.
Ethiopia’s coffee beats odds at export market
Kacha steps foot independently in the digital finance space
New mobile money service provider, Kacha Digital Financial Services S.C has been licensed to be a private mobile money platform and now joins the financial industry despite it not being owned by a financial institution.
Earlier this week Kacha received its license from the National Bank of Ethiopia to join the market.
Founded by 13 Ethiopian techies and entrepreneurs, Kacha was registered with a subscribed capital of 200,000 million birr based on the payment service proclamation 718/2011 and the NBE directive ONPS/01/2020.
“The issuance of this license distinctly marks the beginning of a new era for broader participation of the private sector in the national digital financial services landscape as much as it does as a defining milestone to the team of founding shareholders and professionals involved in its establishment for the past three and half years,” Kacha underlined.
According to the company, Kacha has already brought on board more than 30,000 agents across the country which is said to reach over 85,000 within six months.
Aimed to provide cashless transaction, the firm intends to unlock possibilities for users by providing access to affordable, convenient, and secure digital financial services that drive sustainable growth, enhance access to finance, and improve citizens’ livelihood.
The services Kacha provides is said to include; the opening of wallet accounts, cash-in, cash-out, micro saving, uncollateralized micro credits, micro insurance, direct payments, bill payments, international remittance, fund transfer, airtime top-up, card payments, and other innovative services, which will ultimately boost financial inclusion and help the country to attain its aspirations of meeting national development goals including the SDGs.
“Kacha’s vision is closing the existing gaps to change the face of digital financial services in Ethiopia through availing innovative, affordable, seamless, and value-adding business propositions including bringing financial inclusion, Empowering citizens” said Yigermal Meshesha, marketing and business development manager at Kacha.
Kacha Digital Financial Services S.C is composed to play a key role in driving the journey towards the empowerment of citizens by bringing meaningful financial inclusion through innovative product and market approach designs after dedicating years of development and institutional preparation led by Ethiopian developers along with international experts.
The National Bank of Ethiopia has also approved the appointment of 7 Board of Directors and the appointment of Abreham Tilahun Abera, as the founding Chief Executive Officer of Kacha Digital Financial Service. Abreham had been serving Lion International Bank for more than 2 years as the acting vice president and has an ocean of experience in vast banking operations which spans 16 years.
The development of the mobile money ecosystem in Ethiopia can generally be defined as early stage. The mobile money ecosystem in Ethiopia follows a bank-led model whereby banks and microfinance institutions (MFIs) partner with a technology provider to offer the service as the sector has been closed for both local and foreign fintech firms. Until recently, fintechs were barred from providing digital financial services (DFS) on their own and had to partner with financial institutions as system suppliers, constraining their growth.
This ban ended in 2020 with the introduction of two laws that opened up the sector. This meant fintechs could now operate independently and many startups were quick to try and take up the opportunity.
Over a year ago, EthioTelecom’s mobile money platform telebirr became the first fintech platform in Ethiopia that’s was not owned by a financial institution. Telebirr has now over 21 million subscribers.
Trade ministry targets ‘$5.4 billion’ from export
The Ministry of Trade and Regional Integration (MoTRI) plans to generate 5.4 billion dollars from export for the 2022/23 trading year.
MoTRI emphasizes that structural economic transaction requires time as the agriculture sector takes lead, whilst the industry sector lags behind.
In a press conference held on Wednesday, MoTRI disclosed the country had earned 4.12 billion dollars in export revenues during the just concluded Ethiopian 2021/2022 fiscal year, which ended on July 7.
The Ministry pointed out that the agriculture sector had generated 72 per cent of the projected plan.
“The agriculture sector still has the economic lead, generating the highest incomes, and it will take a lot of work to achieve the structural economic transition,” said Kassahun Gofe, State Minister of MoTRI.
As the minister indicated, though efforts to improve the diversification of Ethiopia’s export products are taking shape for the structural transaction, it is not easily achievable in a short period of time, thus the agricultural sector will continue to take lead in export earnings.
The agriculture sector marked 105 percent of its overall plan, while the industrial sector generated 12 percent of revenues for its 80 per cent wholesale plan, whilst the 53 percent overall cost-of-business plan for the sector generated revenues of 14 percent.
“The Industry sector is not taking the grip on shares as expected and the country out to double its efforts to transition from Agri led to Industry led,” said Kassahun, adding, “This is atop of our plans to improve for the coming year.”
“This revenue generated showed a growth of 13.81 percent from the last budget year and gave much meaning to the country when it jumped out of revenue,” the State Minister explained highlighting that the growth in interest-trading revenues would improve the country’s ability to embrace, fly and restore credit.
The figure has shown 500 million dollars revenue jump from 2020/21 which was only 3.62 billion dollars. However, MoTRI disclosed the 2021/22 fiscal year export revenue fell slightly short of the government export revenue target which was 4.63 billion USD. In terms of the commodity composition of exports, although coffee continues to dominate the top spot, also other five major non-coffee exports, oilseeds, gold, chat, flower, and pulses each reeled in more than 100 million dollars per year.
According to the Ministry of Industry (MoI), the industry sector had generated about 500 million U.S. dollars in export revenue from the manufacturing industry sector in the 2021/2022 fiscal year. The revenue marked a 100 million U.S. dollars increase as compared with the previous Ethiopian 2020/21 fiscal year.
The lack of side-links, illegal smuggling trade and the slow pace of structural economic transition are some of the problems that are indicated by the state minister as hurdles facing the export business.
“Export is the cornerstone to realize the 2025 plan of the country to join middle income countries. To this end agriculture, manufacturing and mining sector pays significant role for the overall export progress of the country. Even though the export performance of the country showed increments from time to time the result doesn’t meet the desired goals,” the trade ministry underlined.
Ethiopia gives due emphasis to the agriculture, mining and manufacturing sectors such as textile and garment, leather and pharmaceuticals exports as sources of substantial foreign currency. The country’s export performance shows improvement but still much effort remains to boost the export performance of the country in all sectors.
Oromia bank forges partnerships to better digital banking services
Oromia Bank has signed an agreement with two technology providers to invest Omni Channel digital banking technology so as to deliver an integrated service.
On an event held on Thursday July 19, 2022 the bank has signed agreements with CR2 Digital Banking Technology and Moneta Technologies S.C.
“Previously, our bank has done a lot in equipping itself with the latest technology so as to provide reliable and modern banking services to our customers. By realizing the future era is based on banking technology, our Bank has put it into practice by installing the first and most massive data centre infrastructure in the private banking sector,” said Teferi Mekonnen, president of the bank, adding that the Technology adoption will make the bank a superior customer service experience centre and contribute significantly to the development of the country’s digital transformation and help to bring the unbanked society into the banking industry.
“Omni Channel Digital Banking Technology will also greatly update the bank’s internal processes and enables its customers to get services digitally,” said Fintan Byrne, CEO of CR2.
“Once built and readied for service, this huge investment Omni Channel digital banking technology will significantly update the entire payment system of the bank as Omni Channel digital banking technology enables payment of any bill from any bank through digital means,” indicated the bank’s president.
“Omni Channel’s Digital Banking Technology brings the payment options that were previously provided in a fragmented manner by multi-channel technology into one platform and making the service fast, modern and very convenient to users,” he further elaborated.
The adoption of this technology makes Oromia Bank the 3rd bank in the country to do so.
“What makes Oromia Bank unique with this technology is that, the rural farmers are our centre in terms of accessibility. In nutshell, our adoption of this technology will make our bank a superior customer service experience centre and will significantly contribute to the development of our country’s digital transformation,” said Teferi.
Oromia bank is said to be accessible through its 405 branches, by providing efficient and modern banking services. It is said that Oromia bank has financial technology security by installing an information system security centre that can monitor 24/7 and has the highest capacity in the industry.
