Ethiopian Bankers Association (EBA) has asked the government to intervene on the latest measure of National Bank of Ethiopia (NBE) on suspending some banks from issuing bank guarantees.
NBE, the regulatory body, had suspended some banks on providing different bank guarantees for their clients in relation with reaching their maximum limit.
Bankers, who demand anonymity told Capital that members of EBA, which represents bank presidents’ had discussed the issue in their meeting to which they arrived to a consensus that the government must intervene on the case since the issue is not only aligned with the regulatory body.
According to the information, most of late comers and one long established bank; in total six, have been suspended by NBE to issue a guarantee.
“Conceivably these banks had provided huge amount of guarantee with less response and that is the responsibility of NBE to control them, but the government should also understand their contribution to the economy because of the guarantee they provide,” one bank president, whose firm is not part of suspended banks, commented.
He argued that these banks have been contributing towards the country’s development since majority of the guarantees have been given to projects that are owned by government. “If such kind of service was not provided by banks, developmental projects may have not gone as per the target,” he added.
Other big bank leader also said that the motive of the intervention that EBA demanded is that the government should understand the market and current situation in the country.
Projects have been in difficulties with associated instability in some area that contributed for delays. “For instance projects like roads are carried out in different corners of the country including remote areas, which is highly vulnerable to fall victim, thus pressurizing contractors to become unable to run projects as per the agreement,” he explained.
According to experts in the banking industry, similarly inflation has badly affected projects; meanwhile price evaluation from clients mainly from government has not been coming in appropriate time. “The price escalation has also contributed for delays on projects,” they explained..
Bankers said that as a result the government should be part of the problem and at the same time contribute its part for the solution.
Capital sources indicated that the letter that was sent to the federal government via EBA was issued about a week ago. However, so far there has not been any response from the government side.
Recently, contractors had claimed that they have fallen victim to the decision of NBE after it took measures on the banks.
Contractors via their association, Construction Contractors Association of Ethiopia (CCAE), said that for the last couple of months CCAE has written letters to acquire solution on the areas including; price escalation, financial transaction and restriction on some banks to issue guarantee for bid and projects.
They said that since January, NBE has suspended few banks from issuing bid guarantee and advance payment bank guarantee and performance bond for projects.
“Because of NBE’s decision, contractors are unable to use the extra amount on their collaterals that are already controlled by the suspended banks,” Yusuf Mohammed, member of Board of Directors of CCAE, said.
“Based on the measure of NBE, contractors shall not participate on bid that requires bid guarantee bond besides accessing advance payment guarantee,” Girma Habtemariam, President of CCAE expressed.
Some of the banks included under the NBE temporary suspension are; Enat, Abay, Wegagen, Addis International, Lion banks.
EBA pleas government for intervention on bank guarantee suspension
CONSOLIDATING THE HORN
Consolidating the Horn from the outside is all the rage in the twilight of the modern world system. Before looking at the economic imperatives of consolidating the Horn from the inside, (citizens/member countries) we will look at the ‘all of a sudden interests’ emanating from the outside. There are two opposing camps working towards this consolidation project. One is represented by empire and its associates in MENA (Middle East & North Africa). By empire, we usually mean the triad (Samir’s word; God bless his soul), the US, Western Europe and Japan. Here, the strategy is more or less known; it is to maintain the global status quo with the reigning hegemon intact at the helm. The other is the interest pursued by the new ascending powers spearheaded, for the most part, by China and Russia. The SCO ensemble (Shanghai Cooperation Organization) is probably the real representative of this new gathering force!
The BRI (Belt and Road Initiative) of the Chinese is a massive undertaking that can potentially rearrange the current world order. It envisions integrating economically (hence, culturally, etc., etc.) the continents of Asia, Africa and Europe. The Eurasian project is already underway and the SCO is going to be the main vehicle for this project. The Eurasia land mass contains the largest known deposit of fossil fuel (including natural gas), to say nothing about other natural resources. It is also home to about 45% of the total human population. The BRI is going to be an integrated economic system that is going to rely, mostly, on road and rail networks. To recall; Russian and China are land based powers. These countries are now determined, more than ever, to leverage their physical geography to advance a global system that will have its center of gravity more towards the east. The stakeholders in this new system will be the numerous states and their population, as they will be critical to the functioning of the whole amalgam. Therefore, as far as the new ascending new project is concerned, multi-polarity is already baked in. This inclusively encompassing project, on its own, can have a stabilizing influence amongst the numerous nations that have been in conflicts for centuries. Geography is going to become destiny, again!
The BRI initiative also includes our continent. To that end, a corridor or corridors are needed to connect Eurasia and Africa. The best option for this seems to be along the Res Sea coast. Bab-el-Mendeb is a strait between the two continents and has a span of only 20 km! This is another of the choke points of the global sea routes, like the Strait of Hormuz in the Persian Gulf. Directly or indirectly controlling such Straits has been critical to the previous/current sea powers of the world system, namely the British and the American empires. Relinquishing the management of these sea passages to a new multipolar arrangement is bound to undermine the existing status quo, hence, might not be welcomed by empire, to say the least! Be that as it may, the two camps (empire & SCO) implicitly agree on the need to have reliable and permanent security zone around the Strait of Bab-el-Mendeb. In regards to this particular objective, the current war in Yemen is not going to help. To counteract the current situation on the Asian side of the Red Sea, the African coast must be strengthened, per force!
The oil kingdoms and powerful others want to protect this critical sea route, which is used for transporting goods, including oil to Europe and beyond. The Strait of Bab-el-Mendeb is becoming increasingly important as the Strait of Hormuz becomes increasingly volatile. If the Strait of Hormuz runs into potential difficulty, on the account of disagreements between Iran and the US, the only way to get oil out of Iraq, Kuwait, Qatar, Saudi Arabia and the UAE will be via Yemen, Oman or the Red Sea (assuming the northern route via Syria, etc. will remain inaccessible)! The former two might not always be compliant to empire’s desire (for various reasons), leaving the Red Sea as the more realistic option. And for that to happen, pipelines need to be built across the Arabian Peninsula all the way to the Red Sea coast! Far fetched as this might sound, the scenario is being entertained by the rich and the powerful. To this end, a meaningful naval force must also be established in the Horn, to protect the Strait ob Bab-el-Mendeb and the whole Red Sea coast. Amongst others, the ports of Assab and Massawa need to be revived. Even though Somalia has the longest coastline in Africa, assuring the safety of vessels, in its proximity, has become problematic after the collapse of the Mogadishu government in 1991. Besides, Somalia might be a bit off, geographically speaking. Today the consensus (amongst both contending groups) seems to be: the consolidated Horn, backstopped by landlocked Ethiopia, is probably the best option to secure the safety of the Red Sea, particularly the Strait of ‘Bab-el-Mendeb’. This, in a nutshell, is why the ‘sudden’ interest in the Horn, by various parties!
Unless BRI is severely impeded by empire, here we are going to coin a new word, Eurasiafric, will end up becoming the largest and biggest economic zone in the world. With a population of over 50% of humanity and the largest deposits of remaining natural resources on earth, to say nothing about its hardly tapped market, Eurasiafric, can easily reconfigure the existing world system! BRI envisions connecting African countries by road and rail networks, thereby economically empowering many of the poorer nations of the world system in the process. Herein lies the challenge to the global status quo, which is adamantly determined to continue leveraging the ‘good old’ polarizing globalization! The Anglo-American empire needs to asses its geo-strategy, rather soberly. We believe, the current hegemon must try to approach the whole scenario with a spirit of cooperation rather than confrontation. At times, letting go is the best policy! Most importantly, diversity is going to be the only game in the universe of Eurasiafric. Hence, the old model of accumulation that leveraged slavery, colonialism, racism, ethnic-ism, religion, sexism, etc. might well be inoperative in the years to come!
“Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that ‘all men are created equal.’ We now practically read it, ‘all men are created equal, except negroes.’ When the Know-Nothings get control, it will read, ‘all men are created equal, except negroes, and foreigners, and Catholics.’ When it comes to this I should prefer emigrating to some country where they make no pretense of loving liberty. Abraham Lincoln, Speeches and Writings, 1832-1858. Good Day!
Zemen, MasterCard unburden overseas travel with contactless card
In partnership with MasterCard, Zemen bank issued the first ever contactless prepaid travel card in Ethiopia.
Zemen prepaid MasterCard will enable cardholders to use cards with two major currencies namely, U.S dollar and the Euro based on their travel destination.
“Zemen is known for introducing banking technologies in the country, we are delighted to see this product address our customers’ needs for overseas travel without the need to hold cash,” said Dereje Zenebe, CEO of Zemen bank, adding that the move will pave the way for more E-commerce payments too as customers are able to book their flights and hotel using their card.
In addition to the two currencies, in the future Zemen is planning to work with master card to issue cards for other currencies based on their popular customer destination to add convenience and avoid currency conversion cost.
Card holders are able to load up to 10,000 U.S dollar or equivalent depending on their purpose of travel. All Zemen machines and most ATM accept contactless master card as a result of Zemen’s significant investment and diligent approach to providing contactless solution.
Zemen’s prepaid travel master card include access to all master card points of sale and ATMs in the world as well as platinum insurance benefits which covers card fraud protection and purchase protection.
In addition to Zemen MasterCard, Zemen bank has also launched the next generation mobile banking application in addition to the traditional mobile app functionalities to enable customers to view account information.
Moreover, Zemen customers can self-onboard themselves and be able to get 24/7 instant support through the in app chat functionality by downloading the app from Google play and Apple app stores.
The bank is among one of the pioneers in introducing mobile banking with the then existing technologies. It has now revamped its mobile banking solution knowing fully well the current and future customers needs for harnessing evolving technologies.
App banking customers can access their finance faster and send money to friends and families without any hassle. In addition, financial and non-financial transaction can be initiated on the app which can send instant cash to any recipient at Zemen ATM for immediate needs. Furthermore, customers can access their accounts to get relevant information, plus all digital channels of Zemen bank are seamlessly integrated for customers to initiate a process in one channel and finish in other channel.
Using the app customers will be able to manage cards initiate, Z-cash voucher and collect cash through AT, pay bills and can resolve their day to day banking queries and get information related to products and offers.
The status of Ethiopia’s hunger level
In a peer reviewed report, a global hunger index published by Welthungerhilfe and Concern Worldwide on an annual basis set Ethiopia 92 out of 107 countries in 2020.
Even so Ethiopia has experienced dramatic improvements since 2000 with a GHI scores dropping by more than 27 points from extremely alarming to serious despite it only ranking 92 under the 107 countries in this years GHI-ranked-countries.
In East Africa, Ethiopia ranks 5th out of 9 countries regarding the level of hunger and lies just beneath the average of Africa’s South of the Sahara.
According to the study, Ethiopia despite all progress, about 20 percent of the population is still lives undernourished in which child mortality is still very high.
Child wasting which an indicator of acute under nutrition is very high in Ethiopia, Chronic child under nutrition is thus more pronounced than acute child under nutrition
The GHI highlights the countries that are already suffering from hunger and undernutrition and looks at their long term trends. It therewith points to the areas that are particularly vulnerable to a worsening of the hunger situation.
As the study suggested that the key is to create a healthy and just food environment with fair and adequate income for small holder farmers, fishers, and producers.
Smallholder farmers need to be supported to become more sustainable, resilient, and diversified producers, such as by improving their access to agricultural inputs and extension services, coupling local and indigenous agricultural knowledge with new technologies.
“Local and regional food markets should be strengthened to promote sustainable local agricultural production. Global trade in agricultural products and food should be fair and climate friendly; due diligence along the entire value chain is crucial,” guides the study.
The report was done in order to measure and track long-term trends of hunger on a global, regional and national level. With only ten years to go, this year’s report focuses on how health and sustainable food systems need to be linked to reach Sustainable Development Goal 2 “Zero Hunger by 2030.”
To capture the multidimensional nature of hunger, GHI scores are based on indicators like inadequate food supply, Child under nutrition and Child mortality.
As the report reads on a global level, hunger has decreased over the past 20 years. Many countries have made substantial progress. 46 countries in the moderate, serious or alarming categories have improved their GHI score compared to their 2012 score. Since 2000, Nepal and Cameroon went from alarming to moderate an improvement of two categories. Angola, Ethiopia, and Sierra Leone have decreased their scores substantially by more than 25 points. Although their hunger levels remain serious, this shows that it is possible to reduce hunger.
“Even though the dramatic improvements are too slow (if they continue with the same speed) to achieve the goal of “Zero Hunger 2030” they will be on track. Since defeating hunger is not only possible in theory and these countries should fuel the motivation to speed up the improvements,“ advised the report.
“Perhaps the Progress is way too slow, too many people are still suffering from hunger and undernutrition,“ stated the study.
