Under the direction of National Bank of Ethiopia (NBE) financial firms are in rush to know their customers ahead of the deadline in February 2022. Accounts that do not have the required profile shall be transferred to the regulatory body.
In the past few weeks banks have been approaching their customers through different communication tools like text message (SMS), phone call or media announcement to appear at their branch and recheck their accounts information.
Bank clerks that reside in different banks’ branches told Capital that the new scheme has become an additional workload for them since the number of account holders who are visiting branches are growing by the day.
“The new scheme has imposed further burden on our day to day activity,” a clerk said.
The clerk explained that despite being in a branch that is not regarded as a big branch with regards to the number of account holders, the numbers of visitors have continued to increase in the past few weeks.
“Our bank has already called all its customers to visit their branches. We will also give a call for customers if they do not appear in the coming weeks,” another bank clerk that works on the branch located around Bole Medhanialem told Capital.
She said that the bank called all of its accountholders regardless of customers having the required document like photo and ID with the bank, for a thorough check.
One customer that Capital interviewed for instance said that he received an SMS from the bank that he has a deposit account with, and went on to visit his branch. “However I have learnt that all the required profile was already filled when I opened the account years back and I have proved that on my latest visit to my branch,” he explained his case.
The work load mainly on big banks is very huge according to bankers since their bank account holders are in millions, while the story of Commercial Bank of Ethiopia (CBE) is different owing to its large customer base.
One of the clerks that Capital talked to at one of the state giant CBE branches said that the number of customers visiting in relation with the latest announcement has an unprecedented flocking of customers at their doorstep.
CBE has over 34 million accountholders. Recently Yinager Dessie, Governor of NBE, said that in relation with last year’s currency change an additional 7.2 million bank accounts have been opened. It is estimated about 60 million accounts are opened across all banks.
The new rush is followed by the NBE directive of knowing your customers (KYC) and customer due diligence (CDD) that issued in August 27 which became effective the same day.
The directive, ‘requirements for undertaking account based transactions and ensuring of regulatory limits directive No. FIS/04/2021’ on its preamble stated that KYC and CDD practices are critical to ensure proper identification of customers, appropriate assessment and monitoring of transactions including ensuring of proper compliance to regulatory transaction limits set by NBE.
It added that the implementation of KYC and CDD shall combat illegal and unauthorized transactions.
Thus the directive ordered banks or microfinance institutions and payment instrument issuers to have relevant information of their customers.
Article five sub article 5.1 for instance stated that in opening a deposit account, a financial institution shall at a minimum record comprehensive customer profile that allows it to acquire adequate knowledge of the customer and identify suspicious transactions in a relatively easy and swift manner. “To this end a financial institution shall use annex I, which is part of a directive as a sample on how financial firms register customers profile, of the directive as a minimum standard for account opening at all time in a manner that ensures consistency across the financial industry,” it added.
NBE has given six months starting from August 27 as a transition period that financial firms capturing required customer profile from existed and new customers and configuring existing system in a manner that would enable a financial firms to issue unique customers ID and introduce centralized account opening approval. The transitional period includes loading of the information to the financial institution’s system.
For those who failed to comply with the requirements of this directive the penalty would be from 20,000 to 100,000 birr that differ as per the britches, while other administration measures shall be applied.
According to the information obtained from bankers, the account of those who do not have the required profile shall be transferred to the regulatory body.
Workload becomes hefty as financial firms hasten to identify customers
ECA annual review highlights major achievements with long-term value to member states
The Economic Commission for Africa (ECA) has concluded its annual and fourth quarter (Q4) Accountability and Programme Performance Review Meeting (APPRM) and preparation of the 2022 Annual Business Plan (ABP) under the theme: “Strengthening Accountability and Joint Planning and Delivery to Advance Impactful Interventions”.
The four day meeting held virtually in Addis Ababa, Ethiopia on December 14 – 17, was officially opened and led by the UN Under-Secretary General and ECA Executive Secretary, Vera Songwe.
Songwe said ECA is looking at how to strengthen its strategic directions (build, formulate, design, advocate, and integrate) in the context of the UN Secretary-General, Antonio Guterres’ Common Agenda that aims to promote realization of Agenda 2030.
The Executive Secretary noted that 2021 has been a difficult year because of Covid-19 pandemic that has led to the loss of some ECA staff members and thanked the staff for their commitment on delivering their work despite the challenges.
“As an institution we are on the right track. We are proud of ourselves of what we have done. Looking forward we need to challenge ourselves on whether we are doing the right things so that we can do more and much better,” said Songwe.
A report on the Executive Secretary compact presented during the meeting indicates that as an institution ECA has made progress and is on the right track on its performance in terms of achieving the programme objectives, delivering reforms and delivering as a leader in the UN. The session also learnt of progress made in key audit recommendations, timely completion of end of cycle evaluations and other indicators of achievement.
Said Adejumobi, ECA’s Director of the Strategic Planning, Oversight and Results Division outlined a number of key achievements, such as the launch of the Liquidity and Sustainability Facility (LSF) at COP26, the global climate conference held in Glasgow, Scotland. Through this mechanism, African governments will save $11 billion in borrowing costs in the next five years, while fostering greener investments and sustainable development.
Further, ECA had spearheaded the organization of the multi-stakeholder Africa Business Forum in collaboration with the Government of the Democratic Republic of Congo and other private sector partners. Held in November 2021 in Kinshasa, the Forum was based on solid technical analysis that will foster the development of a robust Battery, Electric Vehicle (BEV) and renewable energy value chain and market in Africa, echoing ECA’s continued push to industrialize through value addition and opportunities to improve livelihoods.
In addition, ECA made significant contributions in response to the COVID-19 Pandemic as a partner on the African Vaccine Acquisition Trust (AVAT) that aims to increase manufacturing and distribution of vaccines on the Continent. Other milestones include the 2021 African Economic Conference in Sal, Cape Verde, the launch of the ECA Young Economists Network and a coding camp that trained hundreds of young girls in Cameroon.
“Joint, planning and delivery is a ‘work in progress’ for ECA. There is need for more cross collaboration among the SROs on programmes like regional integration, trade, implementation of African Continental Free Trade Area (AfCFTA),” said Adejumobi.
Looking forward to 2022, the meeting articulated six possible areas of collaboration. These are: economic integration (AfCFTA); macro-economic policies (debt, macro-modeling and development planning); Private sector development; climate change; migration; data and statistics.
“The AfCFTA project needs to incorporate the free movement of persons, goods and services in its work. Without free movement of persons, trading and investments cannot be readily accelerated. Hence, ECA needs to work on this urgently, with the involvement of civil society,” urged Adejumobi.
On the issue of migration, the meeting stressed the need to recreate the narrative on the regional and global discourse from an economic perspective. “The global orthodox perspective on migration is quite negative, which sees migration as a burden, liability, and anti-developmental. Whereas migration has historically being central to human and societal development,” he said, and added that the migration project should explore intra and extra-Africa migration in the areas of labour, skills, investments, and employment in creating a new narrative.
The meeting also agreed on deepening the Commission’s work on strategic projects that are germane to Africa’s economic diversification. These include battery manufacture, renewable energy and just energy transition, and air transportation, which is important for reaping the benefits of the AfCFTA.
Rising from ruins: Gov’t to create a system to reconstruct war stricken areas
The government announces that it will establish a system to mobilize resources for reconstruction work at the war destructed areas.
The issuance of restoration bond has been recommended as an alternative source of rebuilding the areas that were smashed by the TPLF terrorist organization, which expanded the attack in two regions before it was engulfed by the national forces.
On the latest Addis Wog, a dialogue platform hosted by the Office of the Prime Minister regularly, Ahmed Shide, Minister of Finance (MoF), announced that the government is working to mobilize resources for the reconstruction work.
He said that comprehensive assessment will be carried out by the committee comprised of relevant bodies including; Macroeconomic Committee, MoF, Ministry of Planning and Development and a committee that engages on emergency response, chaired by the Deputy Prime Minister.
Ahmed stressed that the reform that was undertaken in the past three years has played a crucial role to the resilience in the conflict.
He reminded that despite the conflict in the past budget year, the economy was able to grow by 6 percent, while massive destruction transpired on the country’s resource.
“This budget year, mainly in the recent past few months the damage covered wide areas and was very huge which affected the economy in different forms which requires massive work from all sides,” he said, adding that the activities in other parts of the country is registering promising success even showing better performance compared with the preceding year.
The economic reform works will continue in connection with the rebuilding of damaged public properties and infrastructures including utilities and providing emergency support.
Ahmed said that the comprehensive assessment of the damage shall help to understand the effect in detail of the area affected by the war, “the assessment shall help to plan for the response.”
He recalled that MoF has already drafted a supplementary budget that is already tabled to the Council of Ministers and expected to be sent to the parliament for endorsement.
The supplementary budget shall have a portion to instigate the recovery and reconstruction works.
Designing the recovery and reconstruction program is finalizing to access USD 400 million from the World Bank, while under the disaster risk management program preparation work is undertaking to access additional USD 350 million, “these sum with the support from other bilateral sources shall be a resource for part of recovery and reconstruction work.”
The ‘build back better’ will be the principle on the reconstruction work of the damaged and destructed livelihood of the society in the conflict areas. Ahmed said that the recovery and reconstruction program shall takes up to five years due to the severity of the damage.
He also stated that new macroeconomic reforms shall be introduced which will have an inclusive and strong development in the country.
He said that for successful rebuilding concerted efforts is required by every citizen including the Diaspora.
At the dialogue, Alemayehu Seyoum (Prof), economic expert, suggests the government to consider issuing ‘restoration bond’ as alternative to mobilize resource for recovery and reconstruction work that will be carried out in the near future.
Ahmed responded that the government will have multiple views to mobilize resources for the reconstruction work.
The financing strategy would be properly done but the level of damage, which shall be known under comprehensive damage assessment, shall be understood, “when we have detailed knowledge about the damage, we shall have the cost estimation.”
At the event the introduction of ‘national service’ has got an attention on the aim to create a disciplined society.
He concluded that coordination of government bodies, partners and the society in general is crucial to come out with success on the upcoming reconstruction and recovery works.
Celebrating world Arabic language day
The Councils of Arab Ambassadors in Addis Ababa and the Economic Commission for Africa celebrated the world Arabic language day on Thursday December 23, 2021 at the United Nation Conference Center.
The language day aims to promote and celebrate multilingualism and cultural diversity, as well as the equality of languages used in the organization and agencies.
Head of mission of the league of Arab states in Addis Ababa, community of Arab states, Council of Arab ambassadors and others attended the event.
World Arabic Language Day is observed to honor the Arabic language, which is spoken by over 400 million people globally. The day has been celebrated since 2012 to mark the adoption of Arabic as the sixth official language of the United Nations by the UN General Assembly.
Besides promoting the language, art exhibitions and promoting Arab foods was been part of this year’s celebration in Addis.
