Ethiopia is taking significant steps to safeguard its water bodies by proposing a new bill aimed at regulating construction and activities along their shores. The initiative comes in response to the lack of an independent legal framework for the protection and management of the country’s water resources, which are currently at risk of severe damage.

The draft bill, titled the Water Body Distance Determination, Development, and Care Bill, has been submitted to the House of People’s Representatives for approval. It seeks to establish clear guidelines that prohibit construction on the shores of water bodies, except for tourism-related facilities. The bill also criminalizes the dumping, release, or disposal of hazardous or toxic chemicals near water sources.

The legislation aims to address the negative impacts of sedimentation, chemical runoff, and other pollutants that threaten water quality, biodiversity, and ecosystem services. It emphasizes the need for sustainable practices to preserve these vital resources.

Under the proposed regulations, no construction activities will be permitted along the shores of protected water bodies, with exceptions made only for specific tourism-related developments. Additionally, vehicles will not be allowed to operate in these areas unless designated entry points are established.

The bill also addresses existing developments near water bodies that may be causing pollution or damage. It stipulates that any such activities must be monitored and regulated by appropriate authorities to ensure compliance with environmental standards.

The Minister of Water and Energy will be tasked with overseeing the implementation of sustainable development practices along Ethiopia’s coastlines. This includes developing guidelines for demarcating protected areas around water bodies and ensuring adherence to the new regulations.

Ethiopia’s water resources have been increasingly threatened by pollution and habitat degradation. The proposed legislation aims to mitigate these issues by establishing a framework for responsible management and protection of water bodies.

The National Bank of Ethiopia (NBE), which oversees the financial sector, reports a significant decline in the proportion of state firms with outstanding credit during the financial year 2023/24. To tackle the issue of nonperforming loans (NPLs), the NBE claims to be collaborating with certain banks.

In its recently published 2024 Financial Stability Report, the NBE revealed that the percentage of state-owned enterprises (SOEs) with outstanding loans and advances from the banking sector decreased during the specified financial year.

As SOEs and regional governments are the largest debtors in the nation, the government has recently decided to prevent them from acquiring new loans, as this has proven challenging for the state-owned financial giant, Commercial Bank of Ethiopia.

The latest report, the second of its kind, notes that the banking industry’s loans and advances remain concentrated due to the historical trend of extending large loans to significant state enterprises and regional governments.

“The top 10 borrowers in the banking sector accounted for 14.7 percent of total loans and advances at the end of June 2024, a notable decrease from 23.5 percent a year earlier when considering large state-owned enterprises,” the report stated.

However, the concentration ratios are significantly lower when SOEs are excluded. The top 10 private borrowers accounted for only 3.5 percent of bank loans and advances.

Despite constituting just 0.5 percent of the total, large borrowers with credit exposure exceeding 10 million birr held over three-quarters (74.8 percent) of all loans from the banking industry, marking an increase from the previous year.

During the reporting period ending June 30, 2024, the overall amount of outstanding loans and advances rose by 14.5 percent to 1.5 trillion birr.

The report indicates that most banks, as well as the banking system overall, are considered adequate, as their NPL percentage remains below the NBE’s threshold of 5%.

However, the report also highlights systemic risks and the subpar performance of certain banks. “Nevertheless, in some banks, NPLs exceeded this minimum. As a result, the NBE is collaborating with them to address the underlying challenges,” it noted.

The ratio of NPLs to gross loans slightly increased to 3.9 percent for the year ending June 30, 2024, up from 3.6 percent in the same period in 2023, but still well below the regulatory maximum of 5 percent.

At the end of June 2024, the total assets of the financial sector reached over 3.4 trillion birr, reflecting a 15.1 percent increase from the previous year. These assets represented 29.5 percent of nominal GDP, down from 37.6 percent at the end of June 2023.

Total bank deposits grew by 15.4 percent, primarily driven by an increase in demand for time deposits, compared to a growth rate of 24.6 percent in the year leading up to June 2023.

The report indicated that loans and bonds expanded by 16.1 percent as of June 2024, a decline from the annual growth rate of 24.3 percent recorded up to June 2023.

It also noted that GDP increased at a faster pace than both deposits and loans during the reporting period.

“As a result, the share of deposits in GDP decreased to 21.6 percent from 24.8 percent at the end of June 2023, while the share of loans and bonds fell from 21.7 percent to 19 percent,” the report elaborated.

The share of loans in GDP remains low in an international context, and there is an objective to significantly increase it in the medium term to reduce credit concentration risk.

Total assets of commercial banks reached 3.3 trillion birr at the end of June 2024, reflecting a growth of 15.2 percent from the previous year, although this increase is lower than the 19.9 percent recorded in June 2023.

The main contributors to the growth of total assets were loans, advances, and bonds, which collectively represented the largest share, accounting for 66.9 percent of total assets.

According to the NBE paper, the ratio of loans to deposits remained stable throughout the reporting period, declining by just 0.4 percentage points to 60.2 percent, while the ratio of loans and bonds to deposits increased slightly from 87.4 percent to 87.9 percent compared to the previous year.

However, these percentages remain alarmingly high, indicating that nearly all deposits are tied up with borrowers, leaving minimal room for significant and unexpected withdrawals.

In adverse conditions, the high ratios could lead to a liquidity crisis, as they result in relatively low levels of liquid assets, the report cautioned.

It highlighted that the increase in lending, particularly to the construction, import, and household sectors, may have contributed to the decline in the liquidity ratio.

“While the increased lending aligns with the general policy to promote lending to key sectors of the economy, the NBE continues to advise against exceeding a loan-to-deposit ratio of 85 percent to ensure the sector remains resilient to adverse liquidity shocks,” it added.

By the end of June 2024, only 0.4 percent of the banking sector’s depositors held 58.5 percent of total deposits.

State-owned enterprises are among the largest depositors, contributing to credit concentration.

A limited portion of banks’ liquid assets consisted of high-quality liquid assets, such as cash. As a result, some institutions were facing real-time liquidity constraints.

By the end of June 2024, the financial sector was more sensitive than it had been the previous year. If the same shock had affected 18 banks, they would have been unable to meet the minimum liquidity requirements for June 2023; currently, 20 institutions face this issue.

The total income of the banking sector reached 361.4 billion birr for the year ending in June 2024, up from 297.5 billion birr the previous year.

Despite net income before tax rising by 18.4 percent to 57.9 billion birr at the end of June 2024, compared to 48.9 billion birr a year earlier, the overall profitability of the banking industry decreased slightly, although it is still considered adequate.

Ethiopia has officially launched the second phase of its nationwide polio vaccination campaign, aiming to immunize nearly 6 million children under the age of five. The campaign was inaugurated in Gambella, where senior federal and regional officials gathered to promote the initiative under the theme “The Journey to Zero Polio in Ethiopia.”

The second phase of the polio vaccination effort will target approximately 160,000 children across all districts in Gambella, including those in the city administration and refugee camps. Mikias Alayu, a representative from the Ethiopian Public Health Institute, emphasized the importance of conducting multiple rounds of vaccination campaigns to prevent and control polio outbreaks resulting from vaccine shortages.

In the first round of vaccinations, over 160,000 children in the region received polio immunizations. During this campaign, health officials also conducted surveys for polio-like diseases and other illnesses while reinforcing routine vaccinations and raising community awareness about health issues.

Odjulu Oduru, a representative for the Regional President and Head of the Water and Energy Bureau, highlighted the importance of international and local cooperation in eradicating polio. He stressed that active participation from management and stakeholders is crucial for effective implementation.

Prof. Sileshi Garuma, an advisor to the state minister of health, noted that creating a polio-free Ethiopia relies on community involvement in prevention efforts, routine vaccinations, and integrated home-to-home testing.

Dr. Owen L. Kaluwa, WHO Representative in Ethiopia, addressed attendees at the launch event, acknowledging the collaborative efforts of various partners including USAID, UNICEF, Rotary International, and the Global Polio Eradication Initiative (GPEI). He emphasized Ethiopia’s commitment to eradicating all forms of polio as part of a broader global initiative.

This year marks a significant milestone as Ethiopia joins other countries in commemorating World Polio Day with renewed efforts to combat the disease. The campaign will utilize the novel Oral Polio Vaccine type two (nOPV2) across five regions, including Afar, Amhara, Gambella, Addis Ababa, and Oromia.

Ethiopia has made significant strides in polio eradication since interrupting indigenous wild poliovirus transmission in December 2001. The last reported case of imported wild poliovirus occurred in January 2014, and Ethiopia was certified polio-free by the World Health Organization in 2017.

The ongoing vaccination campaign is part of Ethiopia’s commitment to maintaining its polio-free status and ensuring that all children receive essential vaccinations to protect against preventable diseases.

The Ministry of Trade and Regional Integration (MoTRI) has expressed its frustration over the obstacles hindering the export of khat, a stimulant leaf, and has called for parliamentary involvement in addressing the issue.

In response to questions regarding the government’s market regulation strategy amid current macroeconomic reforms, Kassahun Gofe, Minister of MoTRI, stated during his recent parliamentary appearance that there are 283 checkpoints nationwide, the majority of which are illegal.

He noted that, despite a previous commitment to eliminate these checkpoints, regional administrations continue to encounter challenges.

“Regions have reported the removal of levy collection points; however, our latest assessment indicates that there are still 283 checkpoints across the country,” he asserted.

“These illegal checkpoints hinder the free movement of goods, which negatively impacts the market,” he added.

Kassahun informed the assembly, “We have reported the issue to the relevant government body and expect a resolution, but it is crucial for parliament to play its role in addressing this problem.”

Reports indicate that the movement of khat—a key export that is consumed in eastern African countries such as Djibouti, Somaliland, and Somalia, as well as domestically—has been disrupted by the establishment of checkpoints in the eastern regions and Dire Dawa City Administration for revenue collection.

The central government has been attempting to resolve the issue for several years, but Kassahun claims it persists for various reasons.

He emphasized the need for regional authorities to eliminate their barriers to ensure smooth commodity movement, which would enhance foreign currency earnings for the industry.

Recently appointed as head of the trade sector, Kassahun stated that MoTRI has been collaborating with relevant government agencies to ensure a stable supply of essential consumer goods, both from the private sector and the government, to stabilize the market following the government’s bold macroeconomic reforms, including the introduction of currency floating at the start of the budget year.

“We can take regular action against illegal market actors and increase supply to contain market fluctuations,” he stated.

Kassahun also mentioned that the government has revised its approach to regulating the gasoline distribution industry. He revealed that MoTRI will now oversee 59 oil companies instead of the 1,800 retail stations nationwide.

“The majority of foreign currency earned from exports is allocated to oil imports. We are firmly committed to reducing illicit activities in the oil market,” the Minister concluded.