All eyes on Ethiopia in Washington

Global partners’ signal eager expectations to see the direction of Ethiopia’s commitment at the 2023 spring meetings of the World Bank Group and the International Monetary Fund (IMF) which is set to take place from April 10 to 16 in Washington, DC.
Recently, government officials led by Prime Minister Abiy Ahmed paid visits to the US, Europe and China to discuss with the relevant countries and global partners to restore the cooperation that was damaged from the ripples of the northern Ethiopia conflict, in order to get further financial support.
International partners including organizations had imposed their pressure on government in connection to the conflict and as part of the follow through had further suspended commitments and expected funds, which affected the government’s target in attaining the first Homegrown Economic Reform (HGER I) and hard currency resources.
Following the recent peace agreement which was signed in November in Pretoria, South Africa between the government and TPLF, the relations with partners, particularly western countries, has been improving.
Efforts are also ongoing from the government’s side to restore expected support to the economy and HGER II reform program which is expected to be introduced in the coming couple of months.
As part of the negotiation, IMF staffs visited Ethiopia as from March 27.
In a statement that IMF issued on Friday April 7, it said that a mission led by Alvaro Piris visited Addis Ababa from March 27 to April 7, 2023, to hold discussions on the authorities’ request for IMF support for their reform program.
The statement quoted by Piris cited, “The IMF team welcomes the authorities’ HGER II, an ambitious reform program that aims to address key macroeconomic vulnerabilities and unleash Ethiopia’s considerable economic potential. We have made progress in discussing the scope for IMF’s support for this reform program.”
It added that discussions will continue in Washington, DC, next week, in the context of the IMF-World Bank Spring Meetings, and in the weeks to come.
According to reliable source, the Ethiopian government is expected to come up with further commitments particularly in political issues so as to get support from the international organizations, which are dominated by western allies.
Sources said that commitments including that stated on the peace deal are part of the expected issues from the government, which desperately needs global support on its side.
Despite the government showing its commitment with regards to servicing its debt, it is demanding debt re-profiling since the debt settlement is growing which in turn has frown to affect the country’s foreign currency resource.
In its latest document, the country’s debt as analyzed by the Ministry of Finance (MoF), stated that discussions with various development partners is underway in response to the November 2020 G20 communique on the Common Framework (CF), which intended to deal with insolvency and protracted liquidity problems of countries; and so far Chad, Ethiopia, and Zambia have made requests for debt relief under the CF.
Recently, Eyob Tekalign, State Minister of MoF, said in an interview with state media, FBC, that countries have been reluctant to see Ethiopia’s case in the past two years because of their direction on the northern conflict. He said that in the latest discussion with partners, consensus has been reached and one of the IMF visit is also part it.
However, the coming week’s discussion that is aligned with the Spring Meeting will be crucial for Ethiopia. According to sources, if some sort of agreement shall not been reached in the coming discussion, the issue shall be pushed on the next joint annual meeting of the World Bank and IMF that will be held in October.
“So the government must show its commitment on the area that partners expected including on the issue that partners demanded from the government in related with the November peace agreement,” sources said.
Experts say that the meeting is not just discussions with the two global organizations, but with those who are behind in support of them.

Lion Bank launches a digital services app called “Alegnta” that allows it to provide digital credit services without collateral.
In a launching ceremony held on April 3, 2023, at the Hyatt Regency Hotel, the bank announced that it has allocated a 500 million birr revolving fund to be used for the digital loan service, which mainly has six different products.
Daniel Tekeste, president of the bank, explained that the service includes Alegnta salary loans, Alegnta for ride and taxi drivers, Alegnta for small and medium enterprises, Alegnta for electronics and furniture purchases, and Alegnta for those who need financial support.
“The bank is partnering with Quantum Technology Solutions on the development of the Alegnta service application, and Alegnta stands to serve citizens who are managed by salary and daily income,” said the president.
The president added that the digital loan service is a collateral-free service and that any customer with a savings account can access the service only by using their mobile phone. According to the bank, the loan approval process is done in a way that takes into account the income status and repayment capacity of the customers, and 500 million birr have been allocated for the purpose.
Sofonias Embibel, Chief Executive Officer of Quantum Technology Solutions, who developed the application, said that Alegnta was made to focus on credit services in consideration of the growing needs of customers. “Although quantum technology has been launched recently, it is now developing several applications for various organizations and financial institutions to make everything simple and convenient for their operation and services,” Sofonias said.
Currently, customers can access loans and make payments to overcome the financial problems that exist in between salary payments on the Alegnta Salary Loan Service, which has been put into operation. It’s been stated that the remaining four credit services will be put into operation until June, and the full operation of this system will benefit the customers of other banks as well.
In recent times, local private banks have been introducing digital lending services, especially in the last year. Although digital payment is gaining momentum in Ethiopia, it is said that it is not enough for the wider Ethiopian society and is still in its infancy.

Ethiopian Customs Commission (ECC) lifts its precondition imposed on automobiles coming from Djibouti.
The commission a few months back had applied a stringent new system that forced incoming and outgoing private automobiles to deposit customs duty and tax of cars at the customs gate, or provision of a bank guarantee to enter Ethiopia’s border and or to Djibouti.
The new scheme was met with much displeasure by Djiboutian citizens who prefer to travel to Ethiopia during the heavy hot summer season as well as for personal reasons or business trip during any time of the year.
Those who Capital spoke to regarding the matter and who in fact have close relatives with Ethiopian citizenship, indicated that in the past such precondition were non-existent in terms of crossing the Ethiopian border and staying in the country.
They stated that the new scheme has become a huge obstacle in their movements in recent months.
However, ECC on the other hand claims that the new system was imposed for due diligence, in order for the commission to know the incoming cars to combat illegal activities in the process.
The commission disclosed that depositing customs duty and tax arrears or bring bank guarantee will allow to control cars that are coming in and out, to leave the country as per the time frame permitted to stay in Ethiopia.
It added that the target was to impose such a system for cars that entered the country with a tourism purpose in order for them not to leave the country without settlement of relevant levy as well as in combating illegal activity.
The issue was heavily raised and discussed upon in the latest joint ministerial committee meeting. At the meeting, the Djiboutian side cited that the new scheme would affect the relationship of the two countries.
The issue had also been one of the agenda items on the meeting of the two countries customs technical committee.
Both sides agreed to apply on another controlling mechanism to tackle the potential problems regarding the concern of ECC.
As per the decision, the two sides agreed that detailed information of automobiles be registered on the system with the data shared between the two countries.
According to the letter that was issued a week ago from ECC, the precondition which was earlier imposed has been lifted.
The letter that was signed by Debele Kabeta, Commissioner of ECC, and sent to ECC branches including in Djibouti and Tadjoura indicated that Djibouti’s Customs and Excise Tax Administration will provide information about private automobiles that enter to Ethiopia.
It added that customs branches are now supposed to fill information on the relevant technologically based system and to follow up the automobiles which leave the country as per the permitted period.
It also underlined for the relevant division of the commission to improve the system that shall share information with Djibouti’s counterpart.
It is to be recalled that Capital recently reported that in the latest meeting had between the two countries, officials also agreed to lift the request for a harmonized system code and area code that was applied by Djiboutian Customs a few months back.