Financial institutions via their association, Ethiopian Bankers Association (EBA), have been persisting the Addis Ababa City Administration to access plots at the heart of the city for their huge skyrocket buildings.
Under Takele Uma’s administration about couple of years ago, the banks had reached an agreement with the city administration to access plots of land at the so called financial district area of Addis Ababa at the surrounding of the National Bank of Ethiopia (NBE) to construct huge buildings.
The city administration and Ethiopian Bankers Association (EBA) agreed to be provided with plots for the financial institutions under the aim for the later to construct high rise buildings.
After the agreement, banks had tabled their proposal to the administration to receive the plots.
However, so far the only beneficiary under the new initiative was Enat Bank which received 4,800 square meters in front of Yobek Building around NBE, according to the information Capital obtained from members of the association.
Despite the details it is still under development and Enat, which does not have its own head quarter, has targeted to construct a 35-storey building.
Despite some the banks have their own headquarter buildings around the stated location, the initiative had also included them on the aim that their demand would growing more and thus have the capacity to erect symbolic facilities for the beatification of the capital city.
About a year and half ago, the city administration had given a green light for Dashen Bank to secure a 900 square meter plot at the back of its current 21-storey headquarters that is located in front of NBE for further expansion, but Capital learnt that 400 square meter of the stated plot has been provided to the City Health Bureau.
President of the Bank, Asfaw Alemu, confirmed the situation, but he said that it is under talks with the city.
“We had discussed with the Health Bureau and there is no problem from their side. If we shall secure the 900 square meters, we shall construct a further huge facility that will also solve the current parking problem and access to water,” he told Capital.
Under the plan the bank has targeted to drill water well at the area to solve the current water problem there.
Regarding other banks the initiative is so far not sealed.
Members of EBA told Capital that they had discussed with the current Deputy Mayor Adanech Abiebie of the City Administration that she gave a direction to continue the plan.
“However the Deputy Mayor has given a direction to accelerate the process, but the administration is not going at the required pace,” they said.
Due to that the association is insisting the administration to finalize the process.
Banking for space in the Central Business District
T-bills’ triumph closes financial loopholes
The market determined treasury bills (TBills) has continued to mushroom leading to the expansion of the stock to 58.9 billion birr as of the end of the first half of the budget year.
The National Bank of Ethiopia (NBE) that introduced the market determined TBills in December 2019 has also commenced the bills with maturity of 364 days in the second quarter of the 2020/21 financial year.
The latest Public Sector Debt Statistical Bulletin of the Ministry of Finance (MoF) indicated that during the first six months of the financial year, net issuance of TBills with different maturity was about 35.22 billion birr.
MoF under its bulletin said that participation of government and private owned commercial banks on the TBills market shows an improvement compared to the previous two quarters.
It has been disclosed that the government reintroduced the TBills under market determined approach on the financial sector reform.
MoF had also indicated that it will use the resource to fill the budget deficit by reducing direct advance from NBE. It added that reducing direct advance, which is also known as money print, contribute to control the inflation.
Under its first and second review of the Extended Credit Facility and Extended Fund Facility the International Monetary Fund (IMF) early this week has stated that the financial sector reforms have progressed, with the development of a treasury bill market reducing the need for monetary financing of the budget.
Under the newly introduced TBills with maturity of 364 days that commenced in October 2020 about 3.38 billion birr accepted in the times, while the offered was 9.9 billion birr.
From the total outstanding 974.7 billion birr public sector domestic debt as of December 31, the TBills share is 58.94 billion birr of over six percent from the total share. This was 2.59 percent in the past financial year.
In the stated period, the country service was USD 991 million for international creditors. Of which the central government share was USD 143 million. Out the total public sector external debt service during the last six months, USD 847.73 million was made by SOEs, while from this the share of non-government guaranteed debt service (Ethiopian Airlines and Ethio Telecom settled) was USD 367.9 million.
Under Debt Service Suspension Initiative (DSSI) that the G20 countries agreed to support eligible countries to suspend service to mitigate the impact on vulnerable economic from of COVID 19 Ethiopia has benefited.
“Currently we are not making any external debt service payment for our Bilateral Creditors of Central governments as per the G20 DSSI,” the MoF bulletin said.
“During the period (July 1 ,2020 – December 31 ,2020) as an eligible country of DSSI initiative, has suspended the external debt service payment of central government to its bilateral creditors which amounted to USD 96.52 Million which was about USD 14.9 million for the period May 1, 2020 – June 30,2020,” it added.
Ethiopia is also eligible for the grant assistance under Catastrophe Containment and Relief Trust (CCRT) of IMF.
Based on the November 2020 G20 communiqué on Common Framework (CF), a discussion is currently been undergoing with different development partners.
Under its review, the IMF backed Ethiopia’s plan to rework its debt under the Group of 20 common frameworks as it reached a staff-level agreement with the government on credit facilities. “To strengthen debt sustainability, the authorities aim to lower the risk of debt distress rating to moderate by re-profiling debt service obligations,” it said on its review statement.
During the last six months new external loan agreements signed by Central government with IDA, Italy and Dansk SK.B amounted to USD 333.87 million, and as per the non-concessional borrowing limit there was no non-concessional borrowing except Ethiopian Airlines, which signed agreements with its commercial creditors’ that amounted to USD 326.02 million.
Total External Public debt disbursement during the last six months was USD 900.11 million.
Total Public Sector Debt stock as of December 31, 2020 stood at USD 54.5 billion, compared to the revised June 30, 2020, debt stock which was USD 55 million.
Out of the total public sector debt, as at December 31, 2020, total external debt amounted to USD 29. 7 billion compared to June 30, 2020 USD 28.86 million. The increment in External Total Public Debt compared to June 30, 2020 is relatively higher which can be partly explained by exchange rate variation of USD, a relatively higher depreciation of USD specially against SDR and EUR.
New leaders. Same old story
The past few months I really struggled to motivate myself to write on anything. Just couldn’t make it! Corona, cricket, economic slowdown, inflation, famine, the Tigray war, elections, vaccine… did not help. By the way let me confirm that I am running for City Council of Addis Ababa. To be honest many say I have no idea what I am doing. But since I showed myself willing to go along with all the Arat Kilo aspirants I take full responsibility for my action.
So, dear readers, here I am trying to slowly come back and share with you my puny reflections. As always I like to write about what interests me most, so this time I’ll touch on politics and my mama.
We all know, like all things in nature, rulers age and crumble. Power corrupts them. Wealth weakens them. Over time, each generation becomes greedier and less competent. Check out the EPRDF Party and its reincarnated Prosperity Party. The later a reborn from the EPRDF ashes is like a Phoenix. The Phoenix is a bird with splendid colors in the Greek legend. Whenever it’s destroyed, it’s said to rise from its own ashes. According to legends it always returns to its initial state.
Here is a simple historical equivalence, the expression of the phrase “The king is dead. Long live the king”, which originated in the 1400s in France when young Charles, I believe, took over from his recently deceased papa, Charles VI. All could rest easy. Though he was a whole lot like the old dead guy, someone new was now in charge.
In the same way, the passing away of EPRDF gave way to its own reincarnation as Prosperity. Just check it out:
Prosperity uses the same offices, albeit with new colors and furniture.
Prosperity retained the same structures and advanced similar policies as the old one.
Prosperity is more feminine (I suppose this is about diversity).
Both EPRDF and Prosperity were fond of exercising brute force to accomplish limited aims.
The old and new parties settle old scores like earlier times.
When Prosperity began operating, it mostly used the same people from the old party; they had merely switched allegiance from EPRDF to Prosperity.
Prosperity uses all the resources and assets of the old party (I doubt if it [Prosperity] agreed to assume the liabilities of the old party?
Anyway, the old and now the reincarnated parties, have one major goal, shared among them, they all want to keep the “system” going… and use it to shove more and more status, wealth and power in their own direction.
The whole thing will surely end badly.
Now, to my mama, who is 94 and lived in her Bole house for over 40 years.
Last month my mama received a half page note from the Kifle Ketema administration to start preparing to vacate her property (some 40 owners were also concerned) for the “expansion” of government blocks and the building of a residential home for a top official. In the quest to build their empires, justify their existence and gain more power and control over land for which they paid not one red cent, they trample private civil liberty and violate common law justice, just like that.This is the second time my old lady is thrown out of her residential home in her 60 years as a resident of Addis. Each time rebuilding her life one step at a time; and now, at 94, she’s about to be thrown from her sweet home again and, most probably, die disoriented.
What will my mama and all her neighbors do?
What could they do? The responsible thing would be to take these self-righteous government thieves to court. But that would require hiring lawyers… and costs lots of money. One way or the other, the government would get the land. That’s the law.
But wait, who are the servants…
Isn’t the primary purpose of the new Prosperity administration – a capitalist by inclination – to protect natural rights. Isn’t the right of private property a fundamental right of a free society because it enables people to be truly free and independent of their government? My understanding is that such governments do not abuse their powers to take their citizens homes, businesses, or land. We have all seen that the use and abuse of government power is a slippery slope; the more power the government obtains, the more it tries to grab.
For many years my mama slept well at night knowing that no thief could appropriate her land in any arbitrary manner unless it was purchased at market value. “The government would make a fair offer to compensate your property”, the officials explained. That was the law. But we all know that officials have regularly cut unfair deals based on low-ball offers based on substandard estimates of property values, abusing the government’s extraordinary power to take properties from private citizens.
Alas, land or property titles mean nothing when governments can arbitrarily and forcefully use laws and ‘policy’ to disenfranchise property owners. At least the Derg dictators have the ‘integrity’ to nationalise assets and land by direct means – using guns and force – and openly at that. My mama and all the other mamas of Ethiopia who owned properties then, knew with certainty that the asset was lost and yet maintained the hope that one day it will be retrieved by force or by justice.
And we finally remind dear readers that it is neither homelessness… nor climate change… nor youth unemployment… nor Covid-19 that will crash Prosperity’s Ethiopia.
It’s unearned arrogance. And tribalism that causes conflict and violence, to be more precise.
The king is dead, long live the king.
Dashen Celebrates its 25 year dash in banking
Dashen Bank, which is a pioneer on introducing new services on the sector expressed that it will celebrate its quarter of a century anniversary with different events in complement with introduction of new services in the banking sector.
The bank that is one of the first three private banks since free market was reintroduced in early 1990s has announced that it will have eventful months in the coming half year.
The company that opened its door as of January 1st 1996 said that it will celebrate the 25th anniversary by undertaking; panel discussions correlated with the financial sector, corporate social responsibility, recognizing the years with partners and staffs and introducing new services on the sector besides revitalizing the coming years with new energy.
The celebration started as of February 25 mid day in the ceremony held at the head quarter area and thanksgiving event ran through the afternoon at Sheraton with the presence of Yinager Dessie, Governor of National Bank of Ethiopia (NBE). On the same day the bank has provided free transport via 20 city buses for the capital city dwellers in relation to its anniversary celebrities.
From various celebration activities the bank has planned to engage on tree plantations in the coming rainy season at Ras Dashen Mountain, the highest peak in the country that the bank backed its name for its brand.
During the press conference held on Wednesday February 24, Asfaw Alemu, President of Dashen Bank, said that the bank has decided to establish a unique link with the mountain, due to that several programs including corporate social responsibility projects will be undertaken there every year.
He said that the bank will reaffirm its position on introducing new services for the sector.
Dashen was the pioneer in introducing ATM and debit card banking as well as international cards like Visa and MasterCard to the Ethiopian market.
Asfaw said that few have come up with new digital platform such as cobranded card that links Queens Supermarket and Addis Home Depot.
The digital platform enables smooth trading by settling any sales services done through the bank by the stated two retail companies that are under the Midroc Investment Group.
He said that the bank has been in the market as a pioneer in introducing edge cutting products and services on the market including mobile and internet banking that will continue with better upgrades with the new version.
“Within the coming six months we will introduce new services,” he says, “We will expand the co-branding card with other companies. New services related with remittance will be emplaced in the near future.”
“We are now engaged on a milestone investment to introduce massive products on technology bases,” Asfaw said, while he declined to give details.
The President has also commented on the financial intermediation which NBE allowed banks to access foreign currency as intermediary of hard currency for their customers in the country.
“The NBE directive has a target to ease the hard currency shortage of the country due to that we are assessing the opportunity but it is premature to give details,” he said.
The bank that was formed with 50 million birr authorized capital and ten branches at its inception now has 450 branches under 12 districts, 10 forex bureaus, 350 ATMs, and 2.5 million account holders. Its asset has expanded to 67 billion birr and its capital has reached 8.6 billion birr. It is also one of strongest banks in interest free banking business.
The bank in now in partnership with KPMG for a strategy formulation and implementation consultancy of its five year strategy plan and 10 year road map.
Under the plan, the bank envisions to be one of the best banks in Africa.
