Birhan Bank plans to double its paid-up capital in the forthcoming general assembly, to catch up with adapt to change and aggressively compete in the financial sector. The bank achieved the target of its paid-up capital of 2 billion birr a year early than anticipated.
Birhan Bank marked their ten-year anniversary with the motto: “Fruitful Years, Bright Future” at the Ethiopian Airline Skylight Hotel on November 26, 2019, in the presence of the Central Bank governors, shareholders, and dignitaries from financial institutions.
“Increasing paid-up capital is top of the agenda in the coming general assembly as we are always striving to grow, compete and work in accordance with international standards,” Gumachew Kussie, Chairman of the Board of Directors said.
Abraham Alero, President of the Birhan Bank says they are improving the economy by financing economic activities, creating jobs and attracting hard currency.
So far, over 20 billion birr has been injected to the economy over the last ten years which has proven successful in creating indirect jobs via investment, in addition to the direct job opportunities, created for over 4,000 employees.
As part of being socially responsible, the bank participated worked on the Sherger beatification project adding that they plan to incorporate a business model with bettering society.
Birhan Bank also has paid over half a billion birr in profit tax into the national economy over the last 10 years. They stand first in the number of shareholders, and this has paid many dividends to the 15,000 shareholders.
Birhan was a pioneer in banking operations with a core banking system which has integrated the banking business with a central data base to improve customer service.
The bank also invested in ICT infrastructure at a cost of three million USD using an IBM equipped data center facility to take advantage of the digital economy.
“Modernizing ICT will be a priority so that as telecom technology catches up with the rest of the world we can provide more convenience for customers,” Kumachew adds.
The bank expanded to over 200 branches. They have total assets of 19.2 billion birr and 15 billion birr in deposits. 
Established in 2009 with an authorized capital of 300 million birr, and paid-up capital of 95.7 million birr, the current paid-up capital has reached 2 billion birr and is expected to double during the upcoming general assembly expected to be held in the middle of next month.
During the occasion, the bank awarded certificates of appreciation to a dozen people for their contribution of 10 fruitful years.
As the National Bank figure indicates, as of June 2019, the total assets of the financial system were about 1.5 trillion-birr equivalent to the 70.2 percent of Ethiopia’s Gross Domestic Product.
Birhan Banks to double paid up capital
Major concerns with govt building projects report finds
CoST Ethiopia, a firm looking into transparency in Ethiopia’s construction industry reports many problems that have wasted taxpayer’s money
The report covered the Addis Ababa National Stadium, a conference hall and support facilities for the Ministry of Foreign Affairs, Jinka and Hawassa airports, The Ethiopian Civil Service office, an apartment complex for federal Supreme Court Judges, and the Urban Integrated Land Management Building project; during a day-long session on Thursday with Members of Parliament and other stakeholders at the Intercontinental Addis Hotel.
Yaregal Ali, CoST Assurance Professional said the went through the entire process of construction; from feasibility studies, bidding processes, recruiting consultancy services and overall project performance.
“The country is investing a lot of money in construction: from the Grand Ethiopian Renaissance Dam to houses, roads and government offices,” said Wedo Ato Deputy Commissioner of the Anti-corruption Commission.
CoST was Established 10 years ago with the support of the World Bank Group and DFID. Also in 2009 there was a proclamation under the Procurement and Property Administration, requiring public disclosure of construction costs for government projects.
The report cited several major problems. Some projects had no completion date.
The Federal Sport Commission which involved in the Addis Ababa National Stadium was unable to produce a tender document, or explain their criteria for selecting consultants. This makes it difficult evaluate the over two billion birr project.
The Jinka and Hawassa Air fields had better ratings as the Ethiopian Airline Group has a dedicated department strictly supervising the projects. However, it was not finished on time because of additional work. Their disclosure rate was 78,9 percent which is better than other clients.
Still there was questionable activity.
“The strong and dedicated infrastructure team at the Ethiopian Airline group that had supervised both consultants and contractors, made an usual price deduction in the cost,” Yargal pointed out.
Government handling of construction projects in Ethiopia has been criticized for corruption.
Absence of documentation and records showing the sequential process of construction proceedings failed to be completed and many projects cost more than budgeted and took longer than expected.
“They don’t have recorded files that could explain why they failed to carry out the projects on time or within the allocated budget. No government institution manages to provide completed information about the tender process, contractual agreements, the procurement process and service contact fee setups,” Yaregal said.
The construction project for the Ministry of Foreign Affairs Conference Room and facilities, for instance, cost 57 million birr more than expected when it was completed – increasing the cost from 147.8million birr to 205 million birr as the project had problems in design review, contract administration, and contract supervision, the study reported.
“A document or information about government projects should be recorded and kept for at least ten years, but what we have encountered is the opposite,” The Board Chair said.
“Ethiopia is billions in debt; we should not tolerate these types of problems and the government should commit to tackling transparency in public infrastructure projects from conception through implementation,” Eyasu stressed.
Chinese investor establishes e-trading in Ethiopia
Ethiopia plans to boost trade by introducing the modern trading platform, eWTP (electronic World Trade Platform).
In relation to his second visit to Ethiopia the Alibaba Group co-founder, Jack Ma witnessed with PM Abiy Ahmed the signing of three memorandum of understandings to establish an eWTP Hub in Ethiopia, which is second in Africa after Rwanda.
The agreement includes developing the hub, training and inclusive digital trade.
The first major initiative for the eWTP partnership in Ethiopia will be the development of a multifunction digital trade hub to serve as a gateway for Ethiopian products to China, a center for cross-border e-commerce, trade within Africa, and a training center.
China Commodities City International (CCCI) will partner with Alibaba in the development of the eWTP Hub. The Alibaba Business School will implement the capacity building and training portion of the partnership which consists of a number of programs, including specialized programs for Ethiopian entrepreneurs, business leaders and university lecturers.
The hub that would create opportunity for businesses including small sized ones to entertain the trading is expected to increase commerce, the service industry and tourism.
The government has given more attention to the digital economy which was also part of their job creation strategy introduced recently.
Eric Jing, Ant Financial Services Group Chairman and CEO and Alibaba Group Director, said; “we will continue to support the creation of a more inclusive, digitally-enabled global economy, where small businesses can participate in global trade. We look forward to working together with entrepreneurs and SMEs from Ethiopia and other African nations to seize the opportunities provided by the digital era.”
In the inauguration ceremony the Chinese e-commerce billionaire said that this is the beginning that Africa can compete with Europe and America. “In the past, the world was divided into developed and developing nations; in the future, this will change to whether you are e-country or not e-country,” he added.
He said the platform motivates small and medium businesses.
The eWTP Hub is intended to enable cross-border trade, provide smart logistics and fulfillment services, assist Ethiopian small and medium-sized enterprises (SMEs) to reach China and other markets, and provide talent training.
Getahun Mekuria, Minister for Innovation and Technology, said “Monday’s signing of the Ethiopia eWTP Hub is an important step in the development of a digital economy in Ethiopia. This engagement will greatly contribute to trade facilitation and open markets to SMEs not only in Ethiopia but in the wider region. We look forward to continue working with Alibaba Group and CCCI to realize the objectives of the platform which has the potential to transform the lives of many.”
The vision of eWTP is to develop new partnerships, technology and policies to enable more inclusive global trade. The eWTP initiative was accepted as a major policy recommendation of the Business 20 (B20) and officially included in the 2016 G20 Summit Leaders’ Communique.
Huge role for new sugar board
With the goal of allowing private investors to play in the sugar business the government has drafted new rules including creating a board to manage the sector.
Agencies like the Ministry of Finance (MoF) and Sugar Corporation facilitated a consultation on reforming the Ethiopian sugar industry at Sheraton Addis on Wednesday November 27 to talk about upcoming changes to sugar policy.
The country will soon privatize its sugar factories. MoF has already shortlisted ten companies including Ethio Sugar Manufacturing Share Company.
The draft ‘Sugar Industry Administration Proclamation’ that is expected to be ratified before the some sugar factories privatize, magnifies the establishment of the Ethiopian Sugar Board and its operation.
The board will have nine members; three from sugar millers or the Millers’ Association, and one each from growers, out-growers or the Out-growers Associations, Ministry of Trade and Industry, Ministry of Agriculture, Ministry of Finance, National Bank of Ethiopia, and Chamber of Commerce and Sectorial Association.
Experts said the transitional board should be formed first, made up of state organizations. “At the current point the members of the board by default will be government representatives since all sugar production is under government control, there will be a mechanism managing the transitional period,” Bitew Alemu, General Manager of Ethio Sugar Manufacturing Share Company, commented at the consultative meeting.
Some other action steps under consideration are to adjust the excise tax to make domestic sugar production more competitive. The current excise tax is 33 percent. Several participants expressed enthusiasm with this move.
Currently, MoF is revising the excise tax proclamation. Some products will see an increase while others will see a reduction, sugar producers are hoping their taxes will be reduced.
Some experts pointed out to missing issues in the new rules. They wanted incentives for agricultural input products and sugar investors to be included in imports like edible oil investors.
“The policy should emphasize the development issue which may improve production,” Bitew told Capital.
They also noted that the policy focuses on sugar and byproducts but the sugar industry potentially could create about 33 production chains. The draft policy states that the Sugar Board of Ethiopia is empowered and will determine the minimum and maximum industrial price for sugar and sugar products.
“It is acceptable to set the price of sugar or sugar cane since the sector is a political commodity,” Bitew said.
However, he argued that the draft document has extended the role of the board allowing it to set prices for molasses or other byproducts, which is unfair. “In some cases, the millers would get a profit from byproducts since the price of sugar will be set by the board,” the General Manager at Ethio Sugar Manufacturing added.
“Rules like this discourage potential investors,” someone interested in getting into the sector said.
Participants also asked about affirmative action for local investors noting that the policy doesn’t address them.
In his response Brook Taye, Senior Advisor at Ministry of Finance, said that when the Prime Minister announced this policy the task was given to MoF to look into multiple modalities and encourage domestic participants in sugar and other types of business.
“There are local outfits currently working on mobilizing resources to take part in the transition, so I would encourage that kind of activity to continue but in terms of our role we are [working on encouraging local investors and communicating that properly],” the Senior Advisor at MoF, who is also at the forefront of the mega privatization process, explained.
“So, it’s not by policy, we have some responsibility to make sure that there is full participation of everybody including the locals,” Brook said. 
Beyene Gebremeskel, Director General of Public Enterprises Holding and Administration Agency, also stated: “we should be looking into it again and make some concessions.”
The policy stated that the Sugar Board will regulate the industry, administer licensing and registration, promote the industry, prescribe a minimum and maximum industrial price for sugar products, participate in the formulation of policies, plans and programs of the industry, facilitate equitable access to the benefits and resources of the sugar industry, facilitate administration and settlement of disputes, and perform such other functions that are necessary to discharge its functions.
Government representatives said they would listen to suggestions made at the meeting and would implement some of them during the drafting process. There will also be more opportunities for this in the future.
Some factories will be privatized by the fourth quarter of this fiscal year.
