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NBE to table ten-year financial sector roadmap

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The National Bank of Ethiopia (NBE) disclosed that it has drafted a ten year financial sector roadmap that will be tabled for discussion soon.

During the CEO Forum organized by Precise Consult, National Bank of Ethiopia Governor, Yinager Dessie said that the roadmap will show the path of the financial sector in the coming period.

“We have developed the draft for the roadmap that will be tabled for discussion in the near future before implementation,” he told business leaders who gathered for a breakfast discussion at the Sheraton Addis on Friday December 18.

“We are going to envision what the financial sector would look like in the coming decade,” he explained. “If we have that vision it will be clear what we shall do next for the coming two years, five years and ten year,” he added.

He said that the next reform mainly should focus on the financial sector because it is a backbone for the whole other sectors development.

It is recalled that a week ago the Council of Ministers had endorsed a ten-year economic plan that will be applied until 2030. In this plan the government has set massive changes in the economy including the financial sector, while Yinager did not give details about the financial sector roadmap, on whether it would consider opening up the sector for foreign investors or not.

He underlined that the government has made changes to its direction for the last couple of years under its Home Grown Economic Reform Agenda (HGERA) regarding development path and access to finance arena.

The governor said that in the past the government had been the major beneficiary regarding to project financing that is mainly sectored from loan, which created macroeconomic imbalance and massed up the macroeconomic policy that should be corrected under the coming years development plan.

“Under part of the correction process the government decided to focus on projects accomplishment than commence new public project. Due to that in the past two years the private sector secured huge amount of money mainly from public banks than the government,” he said.

He added that it will continue in the coming years ahead, “we will continue to finish the ongoing public projects than allocating fresh loan, while to fill the development demand the government is working on Public Private Partnership and joint venture schemes on infrastructure developments.”

As one of the top priorities in the reform, Yinager mentioned that the forex roadmap development was crucial to improve the forex management regime.

He said that the roadmap has shown how the Ethiopian forex management looks like.

“The roadmap shows the step we should take in the coming two to three years and we have already taken some measures,” he added. He hinted that the sector will be more relaxed in the coming years through different step.

Regarding expanding the financial inclusion implementation, the Governor said that the NBE board has approved the financial education strategy besides other massive reforms that it is undertaking.

“In the years to come we will do some more reforms in the financial inclusion and one of that is creating huge awareness among the public about the financial sector, products and sector services,” he said regarding the financial education strategy.

“Awareness creation is a crucial component that we will work with other partners,” he added.

Regarding the Diaspora to invest in the financial sector the Governor said that there is huge progress mainly in the under formation banks.

He said that the lease financing, that is also opened for foreigners’ companies, the government is expected much more participants since it has huge potential, whilst the movement in this sector is very slow.

He said that on lease financing directive, studies are carried out to improve it on the aim to attract more investors on the sector.

Old currency still in use in Tigray

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Despite the demonetization of the old birr notes ending on Tuesday December 15 both the old and new currency are in use in Tigray region currently.

The government had introduced the new currency on September 14 and the currency change has been conducted for three months until December 15. These enabled the government to collect huge amount of money into the banking system and expand the saving account.

Meanwhile the demonetization continued until Tuesday while transacting on the old currency had ended as of December 1st.

Information Capital got indicate that although the old currency transaction and demonetization had ended nationwide, both currencies are in service in Tigray region.

Information indicated that currently most of the towns in Tigray have calm down and activities have gone back to normal.

The interim government in the region also announced that as of Sunday December 13 it has commenced its official work in the region and called civil servants to start their work as of Monday December 14.

Since the law enforcement measure started banks in the region had ceased their operation.

Information from Tigray however indicated that currently both old and new currencies are in use in transacting, while some entities refuse to receive the old money.

Senior officials at the National Bank of Ethiopia said that the central bank planned to give a briefing about the circumstance this week; however it is postponed due to unforeseen reasons.

The new currency notes that have enhanced security features and other distinctive elements replaced the 10, 50 and 100 bill notes and an additional 200 birr note was introduced.

The government disclosed that 2.9 billion notes with the value of 262 billion birr have been printed. For printing the money the government paid 3.7 billion birr which on average means 1.275 birr per note.

Capital’s effort to get additional information from RedwanHussien (Amb), State Minister and Spokesperson of the State of Emergency in Tigray  andMuluNega, Head of the Interim Government was unfruitful.

Tigray’s regional officers to be replaced

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The interim government of Tigray region has said it has started working to replace all high post officers of the federal and regional bureaus from the previous administration as part of its reorganization of the region.

Mulu Nega, CEO of the new interim government told Capital that the new administration started replacing bureau officers working in higher positions of the government structure in the region however other civil servants will maintain their position.

Mulu added that most of the higher officers in both governmental and regional offices were appointed by the TPLF group and there is fear that they are working for the group.

It has now been well over a month since the law enforcement operation was started in Tigray and the government since November 29 announced that it has successfully completed its military offense after controlling the town of Mekele from the leaders of Tigray Peoples’ Liberation Front /TPLF/.

In light of all of these, one of the mandates of the interim government is reorganizing the government structure in the region by cooperating with independent and neutral scholars and political parties operating in the region.

Mulu told Capital that the interim regime is working on replacing older TPLF administration structures and last week the new regime had appointed a new mayor for Mekele city, the capital of Tigray.

The Interim Administration has prepared its charter to re-establish new Regional and Zone cabinet structures but Woreda councils and Kebele administration will continue.

“The establishment of the interim administration aims to ensure the benefits of the people of Tigray and sustain lasting peace by restructuring the preceding administration system,” the CEO said. Beyond restoring peace in the region the new administration is planning to facilitate credible and participatory elections to be held in Tigray Regional State.

“The acceptance of the people to the new government is overwhelming,” Mulu said. The CEO has been saying the government will work on public relation and communication in the region to separate the people from the TPLF ideology.

The immediate action of the interim government is resuming social services not properly functioning at the moment, including education, health and so forth, in collaboration with the federal government, sector ministries and other stakeholders.

“We are working to restore the social services in the region, in some places these services have been restored while in some places it’s a working progress since in some other places the infrastructure has been damaged by the TPLF,” Mulu told Capital.

Mulu explained that TPLF had damaged different infrastructures in the region which will take a long time to repair nevertheless the new government is working aggressively with the people to restore the operations of the offices including schools.

Collection of firearms is another task that the provisional administration will be undertaking – and it is something given priority in the interests of peace in the region.

Prime Minister Abiy Ahmed also visited Mekelle to meet with the new regional government leaders and commanders of the Ethiopian national Defense Forces. He reaffirmed that the government is committed to the reconstruction of the region and called on the people of Tigray to cooperate in the effort to bring what he called criminal elements to justice.

On Friday December 18, the government had announced a 10 million birr bounty for anyone who disclosed the whereabouts of members of the leaders of the TPLF group.

UNEQUAL EXCHANGE & DEBT

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Unless we Africans bury our perennial naiveté once and for all, we are going to perish, literally! First and foremost, we should fully recognize that the reigning global order is not set by us, nor is it primarily intended to benefit our sheeple (human mass). It is time Africans understand the intricate workings of the world system that continues to polarize human existence, both at the level of the individual as well as countries.

Unequal exchange is a permanent pillar of the modern world system. The North extracts resources, financial or otherwise, by employing skewed systems of exchanges! The value of currencies in the global South rarely appreciate vis-à-vis the currencies of northern countries. The economic model that we blindly follow cannot and will not allow our currencies to hold their values against the currencies of the north through time. One can visualize ‘unequal exchange’ by just looking at economies using PPP (purchasing power parity). When goods are priced using PPP, the effect of unequal exchange becomes very clear. Same kinds of goods/services have different prices, depending on location. In the north, prices tend to be dear compared to southern countries. This difference is essentially what is extracted from southern countries on a continuous basis. Going through the analytics of this thesis is certainly beyond the scope of this column. Suffice is to say, this massive loss is 3 to 5% of OECD’s GDP, on annual basis! This is where the actual structural inequality/polarization of the global system resides!

Debt is another scheme of the world order that systemically disfranchises the gullible. In the current monetary regime of the world system, money is created out of thin air and is disbursed as interest bearing financial product in the real economy, mostly to those connected to dominant interests. This systemic extraction of the sweat and blood of labor (including that of entrepreneurs) is another pillar that upholds continuous polarization. Individuals, corporations and states are all affected by this fraudulent scheme of the global banking cabals. Even ‘developed’ economies like Greece, Ireland, Portugal, Italy, Spain, etc., have fallen through the trap and are made to suffer the consequences of phony money creation and its rampant avarice! We admit; our continent has a dearth of competence to interrogate such subtle and brutal economic arrangements of the reigning world system. Obviously, our pompous elites are not up to it. As a result, our sheeple always find itself at the short end of the stick, so to speak.

To understand and elaborate the prevailing polarizing globalization, Africa’s organic intellectuals must play the critical roles. By organic intellectuals we mean enlightened individuals with commitment, confidence, competence, courage and caliber to create social consciousness, with a view to transform collective existence from the reigning life-destroying trajectory (of the world order), to a more democratic, sustainable, equitable and resilient system! This also implies that we should be left alone (or force ourselves to go it alone) to do what must be done, whatever the sacrifice. This is what the East Asian countries did, to some extent, before achieving some semblance of economic independence. The case of China is probably the best example. Countries in Africa must encourage thoroughgoing independent analyses at all levels. It is instructive to look at the case of South Korea during its transformative years. General Park set up an ‘Economic Development Board’, to lead the whole new initiative. Members of the board were mathematicians, physicists, statisticians, engineers, etc. and it was chaired by the president himself. There were no economists, accountants, managers, lawyers or the likes, in the board. The reason: the task at hand required original thinking, thinking that start from first principles, which naturally reject phony assumptions leading to blind mimicking!

We believe Africa has no choice but to fully engage in more creative ideas. It needs innovative approaches to solve its seemingly intractable problems. It is inevitable that mistakes will be made, but these mistakes will enrich the discourse and add to the whole cumulative experience. As the saying goes, ‘what doesn’t kill you will make you strong’. The western model of accumulation at all cost, is a sick philosophy we should intentionally and forcefully abandon. In its place, life centered ideologies need to be propounded. Exposing the whole truth about the system that is destroying both life and life supports systems of our precarious planet must be agenda number one! In Africa and so far, it is our learned zombies, what we call the Ivy Idiots (‘Intellectuals but Idiots’, in the recently coined phrasing of Nassim Taleb) who have been given ample space to pontificate about the various ‘make believe’ scenarios (present & future) that have no rational basis for their realization. Our lives, increasingly based on material consumption will not bring health, wealth or wisdom. Copy catting unworkable and unsustainable nonsenses, is not only very pathetic, it is also dangerous. Our indoctrinated youth expect a future livelihood that closely mimics what is piped through the stupid box, without realizing that it is all a pipedream! As we never tire of repeating; we need to have another six earths before the rest of the South can have a livelihood similar to that of the North. This is not a matter of opinion; it is a scientific fact!

Even those who have been benefiting from the lopsided arrangement of things are no more secured in their old ways, hence are trying to change or at the very least, rearrange the world system. On the other hand, the multipolar world that is trying to emerge is considered a threat and every aspect of its manifestation is being fought tooth and nail by entrenched dominant interests. The wars in MENA, pending wars in Eastern Europe, South China Sea, South America, are all reminders of where the core values of the status quo lie.

“Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.” Samuel Beckett. Good Day!