The Development Bank of Ethiopia (DBE) announced a significant reduction in interest rate to its customers to help them ease away the effects of the corona virus.
According to Haileyesus Bekele President of the Bank, the bank has made 4 to 5 percent interest rate reduction which it has been charging between 11.5 to 12 percent. “The reduction is for three month starting from April,” the president said.
The reduction on interest rate is different based on the vulnerability of the sector to the crises, which is 7.5 percent to hotel, tour operators and poultry farms and 8.5 percent for other sectors and industries.
According to the president because of the reduction the bank will lose more than 460 million birr and also due to the pandemic the bank failed to collect 1.5 billion birr loan in payment terms.
“If the situation continues the bank will continue the reduction for additional time,” the president said.
In addition to the interest rate reduction DBE has cut off additional payments for other services including letter of credit service charge and decided to reschedule and postpone loan settlement period.
Also to stabilize the market and solve the problem of hard currency shortage to buy commodities the bank has given out 2 billion birr to consumer cooperative unions.
So far the bank avails 49 billion birr total loan for more than 2,200 projects all over the country. Recently the Council of Ministers approved to increase the authorized capital of DBE to 28.5 billion birr by adding 21 billion birr.
The state owned development financial institution is supervised by the Public Financial Enterprises Agency and supports developmental projects mainly agricultural, industrial, manufacturing and foster the investment of private capital for productive purpose. One of the mandates of the bank is the provision of development credit to viable priority projects along with technical support through mobilizing resources from domestic and foreign sources.
Priority area projects financed by the Bank include commercial agriculture, agro-processing, manufacturing and extractive industries. DBE also extends a special line of credit for borrowers that operate in the textile, garment and leather and leather product industries. As an additional special line, the Bank offers credit for the procurement of raw materials in the pharmaceutical industry and to companies that supply products to corporate government entities.
DBE join others in reducing interest rate
New proclamation to ease energy development investments
A draft amendment for ‘Geothermal Resource Development Proclamation No. 981/2016’ that will include the exemption of taxes is tabled to parliament. The draft amendment will consider the energy development as other mining and petroleum investments.
The preamble of the draft amendment of the proclamation stated that the amendment aims to improve incentives for companies who are engaged in the investment of energy, which consume huge amount of resource.
The proclamation is not also fit with the licenses given under mining works and legal frameworks that were signed before the enactment of Geothermal Resource Development Proclamation, according to the preamble of the draft amendment.
It added that the behavior of geothermal development works has correlated with the work of other mining and petroleum development that needs similar tax calculation and the proclamation needs to add required incentives for the sector.
The title of part five of the proclamation ‘Administration, compensation, exemption from customs duties, license fees and environmental safety’ has changed by ‘administration, compensation, exemption from customs duties and taxes, income tax, license fees and environmental safety’.
Currently seven companies have received a geothermal development license and are undertaking the exploration work. From the stated licenses two companies have agreed with the government on ‘power purchase agreement’ and ‘implementation agreement’ to commence the development.
Africa records over 200,000 COVID-19 cases
COVID-19 continues to spread in Africa since the virus was first detected on the continent in mid-February 2020. More than 200,000 cases have been confirmed so far, with more than 5,600 deaths. The pandemic is accelerating – it took 98 days to reach 100,000 cases and only 18 days to move to 200,000 cases.
Ten out of 54 countries are currently driving the rise in numbers, accounting for nearly 80% of all the cases. More than 70% of the deaths are taking place in only five countries: Algeria, Egypt, Nigeria, South Africa and Sudan.
South Africa is the most affected, accounting for 25% of the continent’s total cases, with the Western Cape and Eastern Cape provinces reporting high number of cases and deaths daily.
More than half of the countries in the continent are experiencing COVID-19 community transmission. In many cases this is concentrated in capital cities, but cases are spreading into the provinces.
“For now Africa still only accounts for a small fraction of cases worldwide,” said Dr Matshidiso Moeti, World Health Organization (WHO) Regional Director for Africa. “But the pace of the spread is quickening. Swift and early action by African countries has helped to keep numbers low but constant vigilance is needed to stop COVID-19 from overwhelming health facilities.”
Many countries were quick to make difficult decisions and put in place lockdowns and key public health measures such as promoting physical distancing, good hand hygiene and testing, tracing of contacts of people with COVID-19 and isolation of cases. With the support of WHO and other partners, governments also rapidly started to scale up health workforce and laboratory capacities, and to set up points-of-entry screening at airports and border crossings. These public health and social measures have been effective in slowing the spread of COVID-19 in Africa.
In recent weeks, countries began relaxing lockdowns to resume some economic and social activities. The shutdowns have come at considerable socioeconomic cost.
“Stay-at-home orders and closing of markets and businesses have taken a heavy toll, particularly on the most vulnerable and marginalized communities,” said Dr Moeti. “So, the need to balance between saving lives and protecting livelihoods is a key consideration in this response, particularly in Africa.
Easing restrictions should be a controlled process and needs to be coupled with ensuring that widespread testing capacities and mechanisms are in place. These steps need to be constantly adapted according to the trends in the data and maintained until the pandemic is contained or there is a vaccine or treatment for COVID-19 which is accessible to everyone.
As countries ease restrictions, health authorities will need to ensure continuity of essential health care services while also resuming the full gamut of routine health services.
UN calls on governments to help landlocked neighbours
Well-functioning transit transport services and procedures are essential to ensure people in landlocked developing countries have timely access to medical products and basic goods during and after the crisis.
When borders around the globe close, every country suffers, but those without territorial access to the sea are affected in unique ways, said a United Nations statement urging governments to provide smooth transit transport for landlocked neighbors.
Issued on 9 June by six UN agencies, the statement warned that economic and social conditions in many landlocked developing countries (LLDCs) – often the poorest in their regions – are worsening rapidly due to COVID-19 lockdown measures and international restrictions on the movement of goods and people.
On average, these 32 vulnerable nations lag behind the world average by 20% in the UN’s human development index. One-third of their 440 million inhabitants live in extreme poverty, 51% face food insecurity daily, and 40% lack access to electricity.
“The impacts of a combined lockdown measures, health pandemic and a global recession will likely halt or potentially even reverse LLDCs’ progress towards the Sustainable Development Goals and the aspirations included in the Vienna Programme of Action for the LLDCs for the Decade 2014-2024,” it said.
The Vienna programme of action was adopted by the international community in recognition of the complex challenges facing LLDCs and their special development needs.
The statement was signed by the heads of UNCTAD, the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), and the UN’s regional economic and social commissions for Africa (UN ECA), Asia and the Pacific (UN ESCAP), Europe (UN ECE) and Latin America and the Caribbean (UN ECLAC).
Even in normal times, functioning and efficient transport networks and procedures are crucial to connect these vulnerable nations to world markets, as their exports and imports must transit through at least one neighbouring state and often have to change the transport mode – making trade much more complex and costly.
“In these unprecedented times, there is an even more urgent need to ensure smooth transport of goods to and from these countries,” the statement said.
It added: “Transit transport is critical for LLDCs in both the short-term health response to the crisis by ensuring the delivery of much-needed medical equipment and basic goods, and the long-term economic response by facilitating trade and access to global markets and spurring economic pick-up post COVID-19.”
In addition to asserting the UN’s readiness to continue its support to LLDCs and their trading partners, the statement pleaded for decisive and immediate action to help landlocked developing countries while continuing to protect global public health.
