The steep rise of coffee prices draws massive benefits to Ethiopia as the global prices are on pace to set a new record in the trading days of November.
The International Coffee Organization’s (ICO) report for October 2021, which is the first month of 2021/22 coffee year, revealed the monthly average composite of the organization standings at 181.57 US cents/lb (pound, which is about 0.45 kg).
The price increment shot 71.5 percent compared with the same period of last year, while registering a spike of 6.8 percent as compared to 170.02US cents/lb in September 2021.
ICO stated that the average price of October 2021 is the highest since the mark of 182.29 US cents/lb recorded in February 2012.
However the indicator price of ICO composition for November 23 shows the price shooting up to 206.99 US cents/lb with 3.6 percent increment compared with the preceding trading day.
These price levels during the coffee year 2020/21 marks a significant recovery from the low levels experienced over the three preceding coffee years.
The ICO statement indicated that the total shipments of all forms of coffee over coffee year 2020/21 (October 2020 – September 2021) amounted to 129.03 million bags (one bag is 60 kg), an increase of 1.3 percent compared with 127.36 million bags during coffee year 2019/20.
This coffee year is also expected to register more records for different reasons. ICO said that the uncertainty created by weather-related shocks and potential disruptions in trade flows from stricter pandemic-related measures has become a serious threat to the regularity of green coffee supply.
Ethiopia has also stated that it has already registering massive increment on the earnings in the past for months of the budget year, while the product that traded in the stated period came from the past crop season. This year’s harvest is coming out mainly from November.
In the first four months that is traditionally the lowest season for coffee export, Ethiopia earned USD 417 million that is 34 percent higher than the projection set by Ethiopian Coffee and Tea Authority. The authority estimated that the country shall earn USD 319 million which was USD 107 million lower compared with the actual achievement.
Similarly the volume of coffee exported in the four months until the end of October has climbed by 18 percent compared with the expectation. In the period, the authority projected to export 92,107 metric tons of coffee, while the actual export registered 108,608 metric tons that exceeded by 16, 000 metric tons approximately.
Recently, Adugna Debele, head of the authority told Capital that the market situation indicates that the country shall easily earn over a billion dollar at the end of the year. In the last budget year, the country secured USD 907 million from coffee export, which is a record for the country. Coffee is the major source of hard currency from the country’s commodity export.
Global coffee prices see new highs benefiting Ethiopia
National Warehouse Receipt System officially launched
Ministry of Trade and Regional Integration launches a national Warehouse Receipt System /WRS/, a legal regulatory framework for licensing and overseeing warehouses that can store the product of farmers and other value chain actors. The ministry has launched the system after 18 years since the Warehouse Receipt System Proclamation was legislated in 2003.
“Modernizing the marketing system in the agricultural sector, improving product quality and reducing waste as well as improving access to finance are work needed to be done to increase productivity. In this regard, as the experience of many countries shows that Warehouse Receipt System is a modern system to reduce the problems in the trading system and for the farmers as well to create a better financial supply for agricultural producers,” said Endalew Mekonnen State Minister of Trade and Regional Integration on the launching event held on Friday November 26, 2021 at Hyatt regency hotel.
The regulatory body will be established under the Ministry and be tasked with supervising the development of the warehouse receipt system and issue a certificate of competence to warehouse operators, inspectors and agricultural product certifiers.
The regulator will also have an advisory board, which will be comprised of representatives from the ministries of Trade & Industry and Agriculture, the National Bank of Ethiopia (NBE), the Ethiopian Standards Agency, the Federal Cooperatives Agency, the Ethiopian Bankers Association, the Association of Microfinance Institutions and the Ethiopian Chamber of Commerce & Sectoral Association.
Through the scheme by storing their produce, farmers and other depositors can preserve their produce from the high levels of post-harvest loss that Ethiopian agriculture currently suffers from. Additionally, the scheme will improve the quality and safety of the stored produce, and – by accessing bank credit secured against the stored commodity collateral – avert distress selling soon after harvest when prices tend to be lowest. Moreover, the WRS will help the entire value chain overcome high current working capital constraints to more efficiently access and aggregate raw materials, a key requirement to help Ethiopia achieve its vision for value addition through agricultural industrialization.
The Ministry of Trade and Regional Integration has established a WRS Regulatory body within the Ministry for purposes of warehouse licensing and oversight which will be governed by the WRS Proclamation No 372/2003. The Ministry has partnership with different stakeholders and development partners from the cooperative, agro-industrial, logistics and financial sectors to pilot the WRS in the coming agricultural season. Since 2017, the International Financial Corporation /IFC/ has been supporting the Ministry to implement the system through a partnership known as the Collateralized Commodity Finance (CCF) Project.
As part of this work- the stakeholders have put in place enabling regulations, established a national agricultural warehouse standard with the Ethiopian Standards Agency, liberalized the warehousing sector in partnership with the Ethiopian Investment Commission to enable Foreign Direct Investment, and performed capacity building with farmers and their cooperatives, other value chain actors such as agro-processors, and financial institutions.
Five cooperatives have been selected from Amhara and Oromia regions for the pilot project and two agricultural producers will participate in the test. The application is mainly for selected agricultural products such as wheat, maize, teff and beer barley.
Depending on the market situation, in addition to the above mentioned actors additional interested agricultural producers and actors could be allowed to participate by covering their own expense.
Optimized by the Ethiopian Commodity Exchange alongside the national pilot implementation, the Receipt Credit system is also operating in selected cooperatives and agricultural producers from the Southern, Amhara and Oromia regions trading corn, soybeans and chickpeas through the ECX.
WRS has been established in a wide range of African and international countries – for example, South Africa, Malawi, Tanzania, India, China and the United States of America – as an integral part of the institutional framework to enable the efficient financing and marketing of agricultural produce.
Dashen revamps its structure through new appointees
In order to meet the revised strategic plan and fill the vacant senior positions, Dashen Bank has given multiple appointments for its staffs. Moreover, new chief positions have been presented in the new structure.
The bank that recently announced its marvelous performance in the 2020/21 financial year now disclosed that it filled four out of five vacant senior management positions.
Dashen disclosed that following the introduction of the bank’s revised strategic plan and revamped organizational restructuring as well as departure of two senior officials to newly formed banks, it has appointed senior officials on various positions.
“With a long history of nurturing talent with its trademark ‘growing own tree’ principle, Dashen filled four senior vacant positions by experienced young bankers from within the bank,” it said on the statement sent to Capital.
It has also added a senior digital banking officer from the state owned financial giant Commercial Bank of Ethiopia.
As per its expectation to get a green light for the senior positions from the regulatory body, National Bank of Ethiopia, the bank tabled its request which has got approval.
As per the new appointment, Ayele Teshome will now lead as the Chief Banking Business Officer. This position was run by Henok Kebede, who recently went to Amhara Bank as CEO to lead the new bank that was established with a record number of huge shareholders. Ayele brings a wealth of experience spanning three decades in the banking industry and served Dashen as Director for Banking Operation and Central Processing.
According to the statement of Dashen, Eyerusalem Wagaw former Deputy Chief Officer for Human Resources has been assigned as Chief People Officer, which is a new position that popped up after revising the strategic plan. Eyerusalem started her banking career with Dashen Bank about 18 years ago which draws an in-depth inside understanding of the bank.
The former Deputy Chief of Interest Free Banking (IFB), which is one of the successful operations of Dashen, Mesfin Bezu has also been promoted to Chief of IFB position on the latest senior management assignment. Mesfin brings 21 years banking experience with Dashen to the table drawn from leading the IFB from inception which has been able to fetch huge success on this new segment banking business for Ethiopia.
The other new chief position, Strategy and Innovation Officer, saw the bank appointing Mulugeta Alebachew, who served Dashen for the past 18 years in various capacities and before the latest appointment had served as Director for Strategy and Innovation Department.
The bank, which is a pioneer in introducing new technology and different digital banking services in the country, has enabled to get Yohannes Million for the new position established under the new strategic plan. Yohannes, who has over 20 years of experience at Commercial Bank of Ethiopia up to vice president position for digital banking, is now assigned as Chief Digital Banking Officer at Dashen.
A week ago on his annual report address, Neway Beyene, Chairperson of Board of Directors, said that the bank reviewed its fifth strategic plan in light of the momentous changes unfolding in the operating environment, “the participatory review process has led to re-articulation of the strategy plan along nine levers for value creations.”
The re-articulated strategy seeks to keep the bank on course for greater competitiveness, sustained growth, and profitability.
Besides Henok, Yared Mesfin, former Chief Corporate Banking Officer of Dashen Bank has left to the newly formed Tsehay Bank as CEO.
Dashen is one of the top profitable private banks that secured 2.4 billion birr gross profit in the past financial year. On the general assembly held last week the bank has approved to boost it’s paid up capital to 12 billion birr in two years time from the current 5.4 billion birr.
NBE approves Amhara Bank’s seasoned VPs
National Bank of Ethiopia (NBE) approves the assignment of five vice presidents (VPs) as per the request from the under formation huge financial firm, Amhara Bank.
On its approval notification on Monday November 22, the central bank has given a green light for five senior positions.
As per the approval, Amhara Bank assigned senior bankers, who came from three different financial firms, on different key positions.
As per the information Capital obtained from sources, Chanyalew Demissie has been assigned as the first Chief Banking Officer at Amhara Bank, while Dawit Teferra has taken over the Chief Information Officer position for the new coming bank.
Kindie Abebe, who has vast experience in the banking industry, has been assigned to lead as Chief Corporate Service; and for the position of Chief Banking Business, Bezuayehu Seyoum has been given the seat.
According to sources, Hailu Moges, will head the Chief Human Resource docket for the new entrant, which is expected to embark on its activity aggressively.
Based on the profile of the new VPs, they bring to the table a massive experience from their previous carrier in the financial industry.
For instance, Chanyalew who has been assigned as Chief Banking Officer has ample learning and service knowledge in the banking industry with almost 23 years work experience at Dashen Bank.
Before he moved to Amhara, Chanyalew served Dashen as Director for Corporate Banking Department for Government Agencies, NGOs, and International Trade Service Department, as well as different services as Acting Chief at the bank, which is one of the top two profitable private banks.
Similarly, the Chief Information Officer, Dawit has various senior position experiences in different financial firms.
He served on managerial and Deputy Chief Executive Officer positions at Wegagen Bank and Premier Pwitch Solution respectively before he moved to the financial giant Commercial Bank of Ethiopia (CBE). Dawit served the state owned CBE as Director of Infrastructure Management before he came to Amhara Bank.
Kindie, who is appointed for the Chief Corporate Service position at Amhara Bank, served Wegagen Bank as Acting Vice President for Corporate Services on his latest post besides different positional services at the bank.
Bezuayehu’s profile indicated that he served CBE for almost 24 years as District Manager before he came to Amhara as Chief Banking Business.
Dashen’s former Director for Talent Development Department Hailu served his former bank for several years in different capacity. He is now assigned to lead the Human Resource as chief at Amhara Bank.
As per the new VPs assignment, the new leaders of Amhara Bank two of each came from CBE and Dashen and one from Wegagen.
It was recalled that Henok Kebede, former Chief Banking Business Officer of Dashen Bank, was assigned as the founding president of Amhara Bank.
With over 6 billion birr paid-up capital, Amhara Bank was established by over 180K shareholders that make the bank one of the companies that have huge shareholders in the continent.
Such amount of paid up capital is also unique for the start-up bank in the country. Despite not opening its door, the value it amassed makes the bank one of the top banks that has huge paid up capital.
The bank is expected to commence operation in the near future.
