Sunday, October 12, 2025
Home Blog Page 3016

An insurer’s insight

Staff Reporter
-
0
An insurer’s insight

In the last two years the new reformist government of the country has made different economic reforms that have made changes in the financial institutions such as banks and insurances. Experts have been giving their own suggestions regarding the reforms. Asseged Gebremedihn is an experienced manager with a demonstrated history of working in the insurance industry, skilled in System Monitoring, Technical Assistance, Management, M&E, and Project Management. Strong professional he earned an Executive Master of Business Administration (EMBA) focused in Business Administration and Management, from Addis Ababa University. Currently Asseged is Deputy Chief executive officer of Global Insurance Company which is one of the oldest insurers in the country. Capital talked Asseged about the current structure of insurance companies in the country. Excerpts;

Capital: What is your view on the development of the insurance sector in the country?

Asseged Gebremedihn: Ethiopian finance sector is a century old sector and the insurance sector has been operating for half century and has passed in different ideologies. Ethiopian insurance company, the first insurer, was established in 1976. In the imperial period, foreign private insurance companies had been supplying the service which follows the developed world insurance policy. In 1987 when the sector opened for private investors other insurance companies started to get in and operate in the sector.
The development of the sector can be described as latent since it cannot be said that the insurance sector has developed as it did in the beginning, as it has less contribution to the total GDP of the economy which is 370 billion. Insurance companies do not even represent 10 percent of that contribution. The general growth premium is about 11 billion birr which is really a small share in the East Africa share. Insurance in Ethiopia is controlled under the national bank regulations. Some expertise suggests this has also blocked the sector’s development whilst others suggest that the market is free for competition and there are representatives at the board.
Also recently, following the economic reforms in the country which is becoming more liberal, there are certain movements which could have positive effects on the development of the sector.

Capital: Recently, the National Bank of Ethiopia has published different directives regarding to the insurance sector including the investment share directive. What are your views on the regulations?

Asseged Gebremedihn: Insurance company proclamation and directives have for the last 20 years been stagnant, that is, no insights were done for the past two decades. However, recent reforms of the government have resulted to more liberalization and transformation which can have better effect on the development of the financial sector. Government is on process of liberalizing its development organizations and Ethiopia is going to be a member of the world trade organization. Following this, government is in a transforming and

(Photo: Anteneh Aklilu)

liberalizing mode. The economy, insurance and banks could be more effective in liberalized markets, since it creates competition among the actors. National bank investment directives states that one financial institution to have healthy operations, they should have enough hedge capital before investing.
Currently insurance companies invest only on three sectors, namely; fixed time deposit, buying treasury bills and on real-estate sector. This helps to increase their asset by participating in long term investment however this is not enough as the stated investments are becoming more of traditional options. However, it would be better if the investment policy is linked with the national budget allocation and economic growth of the country. Since the economic and the population size is increasing , Ethiopia’s regional integration and role in east Africa is developing, insurance companies investment should not be specifically limited on only the three. The more relaxed liberal market system would increase short term and long term investments options to insurance companies. For example, in short term investment capital market is on the rise so they can be profitable by investing on short term investment on the other hand, life insurance pension fund which is long term investment options and also on real-estate development by creating what is called friendly societies is also profitable. Banks and insurers may also invest money on high profitable options. Share companies are increasing in the market so insurance companies can invest on this. Therefore, being cognizant of these factors we should have a wider approach to investing. The three traditional investment options are becoming old investment options especially when inflation rate is increasing. Therefore, investments should have greater return than the inflation rate otherwise it is not a good option. Thus it is clear that different investment portfolios should be designed to engage the insurance companies.
Ethiopian insurance landscape is changing after the new leadership under Prime Minister Abiy Ahmed came to the power. For example, recently, someone who has patent can get loan from the bank to make the innovative idea real and insurance companies also give insurance guarantee. Moreover, there is a huge potential for cattle and livestock because livestock has been set as a moveable property so banks can give loans and insurance companies can give insurance coverage. This is a major shift on the sector since more than 80 percent of our population is depending on agriculture and cattle. This is a major shift for both sectors, that is, the insurance and the agriculture since investment is being increased.
Now days there are some hopeful new freedoms that will allow us to work with small business and agricultural companies, and since more than 80% our economy is based on agricultural business it’s a win-win for both parties. Furthermore, competitive and preferable banking systems are also in the market i.e. Islamic banking systems. Merchants who have high influence in the business sector and have a reserved approach to insurance systems because of their religious beliefs have also been addressed to by our insurance. Our insurance company provided the first insurance service called ‘TAKAFUN’ and since its launch it has grown to a 1.3 million economy size. In this system, if you buy the insurance service it will allow the user to become a shareholder. In conventional insurance risk is transferred to the insurance whilst in TAKAFUL the risk is shared. The participants share risks according to the mutuality and they build their own plan that is called ‘mutual protection’. They can also place the risk in interest free banking governed by sharia laws. Since interest free banking is existent in Ethiopia, any business can get this service.

Capital: In recent times, establishment of ethnic and religion based financial institutions is becoming familiar do you think this could have a positive impact on the sector?

Asseged Gebremedihn: Establishment of ethnic and religion based financial institutions can be in some ways tactful and also impactful to the great majority. These establishments can consider the financially ignored so to speak. Branding has its own impact, for example when you say ‘GLOBAL’, the name itself indicates that our company is inclusive.
Some firms choose to put country names in their names and this in some instance shows their target group. For example interest free banking was linked with the Islamic religion but we see that Christians will likewise use the service. Therefore it may appear to be limiting in target groups but it may also bring a common ground of addressing services.
The world is increasingly becoming competitive and any start up bank and share companies should consider their company name strategically, because the business has international touch in nature. All indications in business show that we are operating in a global arena. Our company also acknowledges this thus we are all inclusive as we strive to be internationally competitive.

(Photo: Anteneh Aklilu)

Inclusivity is key and essential. We all are worki9ng towards the 2030 vision and when we see our country in comparison to other such as our neighbors in East Africa, they have a huge banking industry in terms of for example turn over and technology.
Therefore naming should note be done to discriminate or alienate but to bring inclusion so as to grow both the company and the economy.

Capital: In the developed world the role of insurance companies on risk management and assessment is high, how do you see this in our country’s context?

Asseged Gebremedihn: The role of insurance companies on risk management assessment, in developed countries is to make a big influence in their county`s fundamental risk. They provide individual consulting services as they magnify the risks, look into fidelity factors and also disaster incidents in their analysis.
Personally, in Ethiopia insurance industry history there is not much practical work assessment and researches on the predictable huge risks which may happen in the country. But focus must shift to this research and assessment. I recall 7 years back in Dire Dawa there were huge floods that led to great losses. Also around Kolfe, there was a huge incident and we lost 123 people and more so recently the huge floods in Tana have been tragic. The government must therefore work to provide a strategy that is through including it in the research and assessment in its annual budget strategy. The government should work therefore cohesively with insurance companies before the damage happens. This cohesiveness has worked in countries such as England too.
Insurance association’s and professionals associations must also look into updating their system in alignment with leading global systems on their relevant business sectors as they seek to provide input to their stakeholders on risks. These data analysis will go a long way in aiding the insurance companies.
As insurance we are also working in pre-risk assessments such as fire accidents if a company wants to buy insurance we will assess the pre-risk by fire engineers on what the physical hazard could be, how the work flow looks like, the production process, safety and we give a reporting on the same.
We also provide PVT (Political Violence and Terrorism risk), like political dissections like tax change, currency change, terrorist attacks and instability or unrest. These pre-risk aids on getting business back to business when such cases arise. This goes to minimize potential future damages.
I personally recommend and encourage that for the overall insurance industry to grow focus of risk management and assessment should really be tackled in academic institutions so as to create more awareness at the grassroots level. Furthermore, we should all consider the benefit of insurance in our day to day lives and business.

2020-USHERING GLOBALIZATION’S END

Staff Reporter
-
0
2020-USHERING GLOBALIZATION’S END

The last decade clarified a whole lot of things about the prevailing world order, including its globalization mantra. The ideology of neoliberalism, aggressively promoted by globally entrenched interests and which was/is deemed to be beneficial to all and sundry, proved to be only a gimmick to dispossess the already disfranchised, both in the north and global south. To be sure, globalization has always been a lopsided arrangement employed by the powerful to goad the gullible sheeple (human mass) into relentless immiserization. We can probably take the formal establishment of the WTO (World Trade Organization; Marrakesh, Morocco, 1995) as the apex of the prevailing globalization or as we never tire of calling it ‘polarizing globalization’; to genuinely reflect its very essence!
From the outset, the poorer countries of the world system did not have much of a say in the setting up of WTO. WTO and its binding rules were and still are anathema to ‘developmenatlism’, if we can still talk about such a thing. The protracted negotiations that took the better half the last century, under the various GATT Rounds (General Agreement on Trade and Tariff: Geneva Rounds, Tokyo Rounds, Kennedy Rounds, Uruguay Rounds, etc.,) were never meant to favor developing countries. If anything, they were meant to stifle alternative developmental trajectories. When the 3rd Ministerial of the WTO collapsed in Seattle, Washington in 1999, the global status quo was shocked to its core. The establishment assumed that all countries would go along, willy-nilly, with whatever is proposed by the core countries of the system, namely the rich countries of the OECD. Even at the very 1st Singapore Ministerial, WTO’s honchos tried to introduce critical issues that were beyond its presumed prerogatives (investment, government procurement, etc.) These, so-called Singapore issues, were intended to systemically undermine the policy making mechanisms of nation states. These issues were so intrusive they ended up being rejected even by some of the core countries of the system!
WTO bullying was so blatantly disruptive, the prediction was, it will not have much staying power. The ‘Battle of Seattle’, within the very womb of the system, came as a shocker to the privileged elites of the world system. In Seattle, African states, led and advised by committed activist intellectuals, in collaboration with some countries of the global south, literally stopped the globalization train on its track! A quarter of a century later, WTO has become as insignificant as League of Nations. Trump, by refusing to name judges to WTO’s appellate court has already signaled his stand vis-à-vis the WTO. To a large extent, his action has rendered WTO ineffective! If truth be told, WTO, as the so-called ruled based trading system is/was anything but. The whole intention of the WTO was to impose the rules of the powerful core countries onto the poor of the periphery. Naturally, such a regime cannot be sustained for long, but since banksters do not think ethically or even reasonably, they tend to push their agenda mercilessly and always behind the curtain!
Don’t forget; it is always the banks, mostly hidden from prying eyes that spearhead all economic activities in the world! All the phony capital decimating the environment as well as destroying the painstakingly institutionalized social compacts is, by and large, the direct/indirect actions of banks. Such evils are facilitated by a financial mechanism called ‘Fractional Reserve Banking’, which we have been incessantly incriminating as ‘the worst ‘non-violent’ crime of the millennium’, using the word ‘non-violent’ rather lightly! The WTO, along with its numerous regulations/rounds, etc., set up to enforce ‘rule based’ global trading regime is now in tatters. Frankly speaking, WTO will not be missed! See Walden Bello’s article next column. Today it is not only the poor of the world, but the sheeple of the rich countries as well that is fighting back against the various unfair regimes, economic or otherwise, imposed by the criminally inclined global elites!
At the end of the day, it is the truncated globalization of late modernity that is at the root of almost all problems the world is witnessing today. When there is free movement of capital, while the other main ‘factor of production’, namely labor, is confined within the boundary of its nation-state, polarization is the inevitable outcome. In today’s globalization, capital has been let loose and is quite free to roam around the world looking for cheap production locales, while human labor is restricted to its domicile. Capital gets the reward, while labor gets the short end of the stick. This is the root cause of polarizing globalization and that is why the movement against it is not only based in the countries of the poor, but also in the countries of the rich. In the poor countries the freely roaming capital extracts its surplus and expatriates it to tax free jurisdictions/tax heavens, mostly via a corporate trick known as ‘internal transfer pricing’. The big companies like ‘Apple’, ‘Google’, ‘Microsoft’, etc. hardly pay taxes, anywhere! On the other hand, labor, within the rich countries can no longer negotiate with such flitting mobile capital, as it can always pack and move somewhere looking for cheap labor! As a result the working stiff within the rich started to lose ground, hence; Brexit, Trumpism, the Yellow Vests (and the new additions), etc. All these are symptoms of a globalization gone wrong; very, very, wrong!
The rise of China, despite or because of WTO, proved difficult for the old metropolitan powers to come to terms with, to say the least. Today, trade wars between ascending and declining powers, is the rage. On the part of empire, various pretexts are being concocted to keep the old lopsided regime going, while resistance (from within and without) is mounting. Let’s hope the old revolutionary’s axiom will not come to pass. “Fascism is capitalism in decline.” Vladimir Lenin. Good Day!

Tigray conflict swells as innocent causalities increase

Metasebia Teshome
-
0
Tigray conflict swells as innocent causalities increase

Ethiopian Human Rights Commission has sent an independent group to investigate the situation that unfolded on Monday night at the town of Mia-Kadra in the western part of Tigray.
In light of the situation, Prime Minister Abiy Ahmed has order the Ethiopian defense force to a military engagemenet in the Tigray region after the TPLF was accused of attacking a military camp in the region with attempts to loot military asset. The TPLF denies the attack and has accused Abiy of concocting the story to justify deploying the military.
The so called law enforcement operation has lasted for more than ten days resulting to military offence and counter measures in the northern part of the country both in Amhara and Tigray regions.
The federal government has said the National Air Force is attacking major possible targets, however TPLF has been saying that there have been no air strike in the region and later gave a contradicting statement accusing the federal government for air attacks and military operation in the region. On Friday Debretsion G/Michael president of the TPLF, on his statement said that the government had launched air strikes on Mekelle, Adigrat, Alamata, and parts of the western Tigray region and Shiraro.
“The war is not complete, this is just the beginning, more than 10,000 members of the Northern Command and Defense Forces currently are under the control of the Tigray National Regional State,” said Debretsion.
According to the state of emergency fact check, in the late hours of November 13, 2020, TPLF had fired a rocket towards Bahir Dar and Gondar cities. As a result, the airport areas have sustained damages.
Also the Tigray regional government has accused Abiy’s government for cooperating with Eritrea to attack Tigray region and its people, however, the Eritrean government has announced it as a false accusation.
A statement posted on the Facebook page of the Tigray government said it would win the “justified” war, and added that a fighter will not “negotiate with their enemies”.
On Tuesday, TPLF had announced that Debretsion G/Michael had sent a letter to all political & civic stake holders regarding the current affairs. On his statement, Debretsion said problems cannot be solved through military means; also African Union has the responsibility to bring all political and civic stack holders of the country in to an all inclusive and comprehensive dialogue.
On Saturday, the upper house of parliament has decided to establish a new interim administration allowing the intercession of the federal government and abolishing the existing illegal regional government lead by Debretsion. The interim administration will appoint officials, ensure the respect for rule of law, approve the region’s budget and facilitate the process of conducting elections.
With reports of increasing casualties, concern is rising for the protection of civilians against hostilities. Civilians caught in the cross-fire, especially children, women, elders and the disabled, are of paramount importance to protect. Humanitarian partners have asked federal and regional authorities to facilitate humanitarian access to reach people in need in areas under their respective control.
On Monday, November 9, Amhara regional state has announce a death toll of about 500 civilians in Mai-Kadra town in the South West Zone of Ethiopia’s Tigray Region where both Tigray and Amhara natives live.
As Daniel Bekele, head of Ethiopia Human Right Commission informed Capital, the commission has sent a group of investigators to investigate the situation on Mai-kadra. The commission will compose reports and information to ensure accountability by investigating and gathering evidence of human rights violations committed by any party involved in the conflict.
“One of the concerns of the commission is working to protect civilians and non-participants on the war, and the commission is working closely with different stakeholders to insure civilian protection,” he stated.
“In the current context of the ongoing conflict in the Tigray region, it is important to ensure access to humanitarian assistance and basic services, especially for the safety and protection of civilians who are not involved in the conflict,” he added.
“Therefore, the armed forces involved in the conflict have a responsibility to protect civilians,” says the commission.
Furthermore, the commission has said that it is closely following the government’s crackdown on the conflict in various parts of the country and allegations of discrimination in some areas on the basis of ethnicity.
As the regional government states the mass killing was ethnic based where hundreds of Amhara peoples where selected to death. As of Thursday November 12, Amnesty International in its report confirms that scores, and likely hundreds, of people were stabbed or hacked to death in Mai-Kadra.
The organization’s Crisis Evidence Lab has examined and digitally verified gruesome photographs and videos of bodies strewn across the town or being carried away on stretchers. It confirmed the images were recent and using satellite imagery, and geo-located them to Mai-Kadra in western Tigray state.
“We have confirmed the massacre of a very large number of civilians, who appear to have been day laborers who in no way are involved in the ongoing military offensive,” said Deprose Muchena, Amnesty International’s Director for East and Southern Africa.
“This is a horrific tragedy whose true extent only time will tell as communication in Tigray remains shut down,” he added.
The federal government has accused the TPLF for the massacre in the town for killing civilians; however on Friday TPLF has denied the accusation and the Amnesty report arguing the direct and indirect culprits is the fascist and the terrorist “Abiy Ahmed” who declared war on the people of Tigray.
“The TPLF is violating international child rights provisions and is barring even children from joining the Special Forces,” said the federal government.
Moreover, the federal government is accusing TPLF Criminal gangs for setting up executive networks in Addis Ababa and other parts of the country to instill fear by caring out terrorist attacks.
The Federal police have also announced that they have banned 14 private security agencies from operating illegally. According to the police commission, some private security agencies have recently been set up to carry out attacks on public and government institutions, as well as the recruitment and deployment of security forces, in defiance of their purpose. And the Addis Ababa Police Commission, in collaboration with other security forces, seized 163 firearms, 1194 rounds of ammunition and other assets during a three-day search operation.
On Thursday, November 12, the house of federation has decided to lift up the immunity of 39 members of the house of federation from the 44 members, including Debretsion, president of TPLF. Also the federal police commission has issued an arrest warrant on officials of TPLF. The suspects are said to have been involved in armed robbery, by attacking the national defense and other related crimes. Also seven military officers have been appeared to the court by betraying the nation and attacking the national defense force.
On Friday November 13, the federal government has appointed Mulu Nega as the new administrator of the region, in addition, the chief administrator will recruit and appoint heads to lead executives- an organ of the regional state from political parties legally operating in the region.
TPLF after its announcement of taking control of Tekeze dam on Sunday, on Friday November 13 has claimed that the federal government has bombed Tekeze Dam, however the state of emergency task force has said the information is false and accused them to peddle falsehood for international audience.
The UN and its partner organizations are committed to staying and delivering humanitarian assistance. A casted humanitarian response plan for Tigray region is currently being finalized under the coordination of UNOCHA.
According to UNHCR Sudan, at least 3,400 Ethiopian asylum seekers have crossed the Sudanese border through two border entry points in Gedaref State since the 9th November. Sudanese authorities are reportedly screened the asylum seekers for onward relocation to a reception center in Shagrab camp in Kassala State. 1,700 people have so far been screened and registered. No armed individual will be allowed to cross into Sudan, according to authorities.
On Friday, Prime Minister Abiy has told Members of the Tigray Special Forces to surrender to the Defense Forces within the next three days.
A statement on Saturday also confirmed that in the late hours of Nov. 13, a rocket was fired towards Bahir Dar and Gondar cities. As a result, the airport areas have sustained damages. Details of the incident is currently under investigation.

The government stands its ground on trade sabotage

Muluken Yewondwossen
-
0
The government stands its ground on trade sabotage

The government has announced that it will take decisive measure on those who may try to engage on trade sabotage in relation with the current situation in the country.
Ministry of Trade and Industry (MoTI) has disclosed that a taskforce has been established in every region up to Wereda level to control and evaluate the market activity.
Eshete Asfaw, State Minister of MoTI, disclosed that every evening the regions are reporting their daily report on the overview of the market activity in every corner of the country.
He recalled that since COVID 19 occurred in the country the government has been taking strong measures to stabilize the market. The government has taken different level of measures on more than 72,000 traders.
Similarly, in the first quarter of the budget year, different administrational and other strong measures including revoking a license and filed cases to the court have been endowed on more than 13,000 illegal actors.
He said that in the latest development there is a trend on hording products mostly basic needs, ganging up for price increment by group and dropping productivity. “We have taken different measures on this acts and some of the matters have been solved amicably,” he told Capital.
“In these regard there are water bottlers and other factories involved in underproduction and price increment on their production that is controlled by the government,” he remanded the latest attempt occurred in the market.
He added that in collaboration with illegal middlemen there were attempt to increase price on cereals that the government enabled to tackle.
Different market sources including those that evaluate the situation at Merkato, the biggest market center in the country, informed Capital that due to the latest situation artificial price hike has been observed not only at the market places but at industries.
One of the sources that Capital interviewed witnessed that since the government commenced offensive attack at the northern part of the country, that is, immediately after the TPLF forces surprise attack on Ethiopian Defense Force, some industries like food processing plants were found to deliberately slow down their daily sales and preferred to hoard the product at their warehouse.
“On one of the industry, who produce soybean products, that I know and located at Lege Tafo the company preferred to sale very limited amount of product on its daily basis,” one of the sources said.
He argued that the product has huge demand and there is scarcity in the market, while the company has huge stoke at its warehouse.
“Besides slow downing the daily sales the company has increased its price in this past week without any reason,” he added.
Some sources said that some are the traders may have relation with the illegal group of gangs that the government labeled as ‘Junta’ under TPLF.
Eshete said that there are attempts to use the opportunity from some traders but the government is closely following the situation in every region and the capital.
“We are also taking measures on those who tried to abuse the circumstance for instance today (Friday November 13) the Addis Ababa City have taken measures on those who tried to go illegally,” he added.
“We prefer to create awareness and now we do that but if anyone attempts to sabotage on the market the government will never forgive,” the State Minister added.

1...3,0153,0163,017...4,134Page 3,016 of 4,134

EDITOR PICKS

Balancing Risks

Arresting Journalists Is Never the Solution

World Must End Silence

POPULAR POSTS

POPULAR CATEGORY

ABOUT US

 

Capital is the longest-established private English newspaper in Ethiopia

Contact us: info@capitalethiopia.com

+251911637862 | +251944732300 | +251116183253
 

FOLLOW US

© Newspaper WordPress Theme by TagDiv