Ethiopia ranks 15th overall in the Electricity Regulatory Index which measures the level of development of African electricity sector regulatory frameworks against international standards and best practices.
The Electricity Regulatory Index (ERI) for Africa is a product of the Power, Energy, Climate Change and Green Growth Complex of the African Development Bank (AfDB). The 2021 Electricity Regulatory Index, an annual report, covered 43 countries, up from 36 in the previous edition, and assessed their impact on the performance of their electricity sectors. The index covered 3 countries in the North Africa region; 14 in West Africa; 6 in Central Africa; 7 in East Africa; and 13 in the Southern Africa region. The report measured the level of development of electricity sector regulatory frameworks in African countries and the capacity of regulatory authorities to effectively carry out their relevant functions and duties.
Uganda is the top performing country in this year’s ERI. Along with Uganda (0.823), Kenya (0.688), Tanzania (0.669) Namibia (0.663), and Egypt (0.609) are the top five performers of the ERI 2021. “These countries have well-developed electricity regulatory frameworks, and their regulators have the capacity and do exercise the necessary regulatory oversight and authority on the regulated entities and on the sector and are, therefore, able to achieve measurable outcomes,” the index report stated.
As the report stated, access to electricity remains low in Africa. About 600 million people live without access to electricity supply. Although more than 75% of countries have mechanisms in place to increase access to electricity, most rural electrification funds are provided by governments and NGOs. This underscores a lack of attraction for local and foreign investors in this segment. The low level of development of mini grids and off-grid services hinders the needed rapid increase in access to electricity.
“Where governments are unable to provide all the funds for rural electrification, the tariffs must make room for the recovery of funds made on rural electrification. This ensures the full recovery of such investment to encourage private sector participation in the sector. The development of mini grids, off-grid and stand-alone systems can accelerate access to electricity in rural areas. Incentives and facilities must be granted to utilities and other promoters,” cited the report.
Among the 2021 key report’s highlights are that regulatory independence is one sub-indicator where African countries have room to improve in and in 93% of sampled countries, governments, and stakeholders exercise influence over regulatory authorities. In terms of regulatory substance, participating countries scored lowest on adequacy of their tariff setting and frameworks, as well as licensing frameworks when compared with best practice. According to the report, the average performance on economic regulation has continued to decline since 2018.
A third of countries surveyed indicated they lack methodologies to determine tariffs; another 40% rely on tariff methodologies that do not include key attributes such as automatic tariff adjustment and tariff indexation mechanisms and schedule for major tariff reviews.
Ranking 15, Ethiopia has recorded a regulatory government index 0.738, Regulatory substance index 0.780, electric regulatory index for government and substance 0.759, regulatory outcome index 0.426, and electric regulatory index 0.569.
The report recommended Medium-Term Interventions (3-5 years) for Ethiopia by prohibition of the regulator CEO from holding other offices in the government and prohibition of the appointment of commissioners who are previously staff of a regulated company. Moreover, it advised for parliament to approve the level of the annual regulatory fees and levies charged by the regulator, and for the average level of salaries of regulator staff to be at least equal to those of utilities.
Ethiopia ranks 15th in AfDB’s Electricity Regulatory Index
New App to help improve adolescent, youth health
A mobile application, Yenetab that helps contribute to adolescent and youth health and life skill literacy was launched. The mobile application was developed by The Consortium of Reproductive Health Associations (CORHA) together with United Nation Population Fund (UNFPA) and the Ministry of Health (MoH).
Director, Maternal, Child Health and Nutrition Directorate at Minister of Health Dr. Meseret Zelalem during her statement reiterated how the mobile app will help youth to access credible information on their health, sexual and reproductive concerns as well as life skills information during this time of COVID-19.
‘‘The development of the new app is particularly timely now when young people are not able to freely visit youth-friendly centers as they normally would due to restrictions arising from the coronavirus pandemic’’ Dr. Meseret noted.
“The app is intended for those who wants to improve their knowledge on youth health, sexual and reproductive health issues as well as life skills, though it is specially tailored for young people. It is a multi-functional application that offers youth important information about their health engagingly’’ she added.
Yenetab mobile application is composed of different navigation tabs that include different segments discussing puberty, relationships, sexual and reproductive health, substance use, and skills. There are also tabs where users can contact the call center to ask questions which are then responded to by an expert. The different tabs were recommended by information and technology experts who the mobile application developers worked with together with a consultant during its development.
Combining accessible five local (Amharic, Afar, Tigrigna, Afan Oromo and Somali) and English with a youth-friendly gem is indispensable in an environment where young people are looking for real information about their health. Yenetab mobile application can have the potential to help adolescents and youth learn new things. The mobile application is an educational platform that allows youth to consult from the comfort of their home and benefit from the advice of the app, right where they are.
Nib Bank, Insurance and Gasha avail revolutionary insurance cover
A multimillion birr insurance coverage that will boost the life class of business embarks through a tripartite deal between financial firms.
The new scheme which is a premium financing scheme was introduced by Nib International Bank, Nib Insurance Company and Gasha Commission Agent plc and is set to provide affordable insurance coverage for public transport providers.
The initiative that was developed by Gasha and accepted by the two Nibs shall include thousands of vehicles to be included on its insurance coverage and shall also provide life insurance for the customers.
It is stated that the inclusion of the life class of business is a game changer for the insurance industry in general since the life business is very small in Ethiopia against the experience for other countries.
At the tripartite agreement and lunching ceremony held on Thursday December 9 at the head quarter of Nib International Bank, Belay Tulu, Director for Insurance Supervision Directorate at National Bank of Ethiopia (NBE), described the initiative that shall boost the life business.
Yonas Belay, Business Development and Planning Manager at Nib Insurance, told Capital that under the new scheme thousands of vehicles engaged on public transport will be included, while the premium will be covered by the bank and customers shall settle their duty at the bank every day on the platform that is established for the scheme.
He explained that the scheme would be key for financial inclusion since it includes several individuals who were not included in the insurance coverage, “we provide insurance coverage, the bank provide the finance in advance and customers who will have account at the banking are saving for their insurance coverage in every day manner, which is boosting saving.”
Yonas said that the new scheme is a game changer in the industry that is worth hundreds of millions of birr.
Zufan Abebe, President of Nib Insurance, said that the insurance company that has half a billion birr paid up capital has established a dedicate branch to manage the new coverage that shall manage thousands of customers.
Yonas explained that the insurance company has fully prepared to manage the new operation in terms of officers and office.
“We have ample capacity to serve the crowd that is expected to come under the new insurance coverage,” he added.
Abel Hailemariam, owner and CEO of Gasha, which is a financial focused company, said that his company has been engaged in detail study on how the cars, mainly public services provides to be included on the insurance coverage that is ill on the sector compared with other insurance businesses.
He said insurers are not interested to play with motor insurance particularly on vehicles with high mobility like minibus and small taxes since they are highly vulnerable to accidents which directly affects the income of insurance companies, “due to that, they impose huge amounts of rate as a premium for such vehicles that is unaffordable and discouraging for car owners.”
“Besides that as per the business experience in the country to be insured clients have to pay yearly insurance coverage and besides that according to the NBE, the regulatory body, directive advance payment of premium is a must, which narrows the loophole to come up with credit alternatives on the sector,” the CEO explained.
On the new scheme Gasha is coming with the idea that the bank will settle the premium on behalf of vehicles in advance and vehicle owners shall re pay on daily basis.
“Most of the stated type of vehicles is excluded from insurance coverage except the mandatory third party insurance, while most of such kinds of cars are major source of income for drivers, owners or their family,” Abel says, adding, “but these assets that may be bought after long saving or by families for their children to support their life and at the same time economic pillars and job for many Ethiopians are endanger.”
“If any accident and damage occurred on a single car the effect is very massive for those, whose life is dependent on it, due to that insurance coverage is a must,” he elaborate showing the reason why the new scheme was introduced on car owner’s side.
On the other hand, the source of finance for the insurance coverage that will be hundreds of millions of birr shall be supported by financial firms, who are willing to be part of the idea.
According to the plan, a bank shall cover a premium of many cars for the insurer, while beneficiaries would resettle their payment on daily bases through the bank account that they opened on the bank, which paid for their premium in advance.
The study indicated that to cover the annual premium the maximum daily payment amount for a vehicle, which is mainly engaged on daily income, as 45 birr.
On this scheme Nib Bank shall easily expand the customers base, saving, other banking services. “Beyond interest earning bank customer base will be massive because of the scheme,” the study indicates.
“For insurers it can be expressed by a single word; bonanza. As per our study for instance if an insurer covers 10,000 vehicles under this scheme the premium would be 125 million birr or if the number of cars shall be 25, 000 the amount of premium is over 312 million birr,” the CEO explained.
“Insurer shall manage this with a single poll and since the poll includes huge customers their benefit also is very significant,” he added.
Gasha will benefit as a facilitator on service charges.
For vehicle owners they will be safe from any risk, and shall settle their premium in long term arrangement, “while the major benefit of car owners would be that they enable to use their assets to access finance.”
“Insurance coverage is a must to access finance from may be banks or micro finances, meanwhile at the current stage such kind of vehicle owners have neglected to make their cars as collateral because of the insurance issue,” Abel cited the current condition as he explained how the new scheme will empower them to access finance.
African Insurance nets 51 mln birr in profit
African Insurance Company, one of the oldest insurers in the country, concludes its financial year with net profit growth; despite its total income showing slight reduction.
The annual report of the company which was formed in 1994 indicated that in the 2020/21 financial year it has amassed almost 51 million birr in net profit after tax with the increment of over five million birr compared with the preceding year.
A year ago the company earned 45.7 million birr which has now increased by almost 11.5 percent to stand at 51 million birr.
The total comprehensive income for the year stood at 51.9 million birr up from the 50.4 million birr in the 2019/20 financial year.
According to the annual report, the company’s gross profit before tax for the reported year stood at 59.4 million birr showing increase from 58 million birr, a year ago.
As of June 30, 2021, the insurance company, which is one of the strongest insurers, saw its total asset reaching 1.44 billion birr. The company which has two high rise buildings in the capital city at South Africa Avenue of Bisrate Gabriel and Africa Avenue, Japan Bole (HQ), is one of the biggest firms in terms of asset.
The report of Africa Insurance indicated that at the end of the financial year the company’s paid up capital has expanded by 24 percent to reach 224 million birr up from 180 million birr a year ago, while its total capital and reserves stood at 366 million birr.
According to the annual report the company’s total income stood at 581 million birr showing decrease from 604 million birr in the 2019/20 financial year. Similarly for the year the net claims incurred in the 2020/21 financial year has reduced by almost 13.5 percent.
Gross claims amounting to 380.5 million birr was paid during the financial year with respect to the general insurance business and 8.9 million birr for life insurance beneficiaries.
According to the annual report, the net claims paid in the 2020/21 fiscal year, show that it is 10 percent lower than the preceding year for general insurance business, and the life business payment has also dropped by 18 percent.
During the financial year, the gross written premium income stood at 602.4 million birr from both life and general insurance businesses, while the general insurance share was 584 million birr.
The annual report indicated that the total premium generated was higher than last year’s same period by almost 29 million birr or 5 percent.
In total the company expenses stood at the 513 million birr with almost six percent reduction compared with the preceding year of 544 million birr.
The reduction on net claim incurred and the total expense in general shall support the company to register profit growth though the net earned premium and investment and other incomes reduced.
For the year, the net earned premium has stood at 445 million birr with 5.9 percent reduction compared with 471 million birr of a year ago.
