Sunday, September 14, 2025
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Happy new year – again

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With the opportunity to celebrate both the Gregorian and Julian calendars’ new year in our fair nation, we also have the opportunity to reflect twice per year on how effective we are in doing our business and on what we can improve. The arrival of the new year will inspire many to realise that we have entered a new era indeed, in which Ethiopia is beginning to prosper and stand out in terms of development and growth. We have a full year ahead of us again, to lay the foundation for real change, to be remembered as a new beginning.
That sounds exciting and promising but just saying it is not going to make it happen. It takes action to make it happen and the way we have been doing things so far really need to change. It also takes the efforts of many to make it happen. The government alone cannot make it happen and neither can the private sector, the church, donor organizations or individuals for that matter. It needs a massive make over of the way we do things if you ask me. If we want different and better results, we need to do things differently. We cannot expect things to improve if we keep doing things the same way as before.
Over the past few years we saw a remarkable improvement in services and infrastructure in this city and I believe in other parts of the country as well. There is a danger however for this progress to deteriorate again and return to more frequent power cuts, poor road works and no progressive improvement in telecommunications and internet services to mention just a few. Interestingly enough these are essential ingredients to attract investors and to make the nation tick.
Last week for example I noticed workers erecting a barbed wire fence on the middle kerb of one of the roads in the city centre. The purpose I guess was to prevent pedestrians to cross the road over the middle section of the road, where tree seedlings were planted. The material used to support the barbed wire was short sticks or branches, stuck into the ground. I remember wondering how long this construction would last and indeed the next day a stretch of some 25 metres was already taken down. A week later, most of it has been destroyed. What a waste of money. Why do we keep on doing things in the same pathetic way and expect a good result? Also, every day on my way to work I used to pass a bridge, which was too narrow to accommodate the flow of traffic. It is for this reason that the construction of a new bridge began, next to the old one, promising better days to come. At a certain moment the construction came to a stand-still, while the old bridge was not maintained, causing more jams every day as its potholes got deeper and deeper. The way road users reacted to such developments was not encouraging either as they got more aggressive in pushing their way through. I have noticed a growing sense of selfishness in general as promises are not kept and the interests of others are ignored. It is “Me first, then you.” If these are the first days of a new year, things need to change indeed. So what can be done? What is it that needs to change? Here follow some suggestions – in no particular order of what I think can be done differently individually, socially and corporately.
dowingI could go on but looking over the table it is really all about respect, mutual benefit, efficiency and effectiveness instead of selfish short term gain. It is about making a choice, a conscious decision to want to make a difference and take responsibility so that we will get better results over time.

Happy new year!
Ton Haverkort

People Power

Gemechu Waktola (PhD) is executive founder and CEO at the i-Capital Africa Institute and Assistant Professor at Addis Ababa University (AAU). He has taught courses on strategic human resource development, managing change and organization and human capital at AAU. Capital’s Muluken Yewondwossen talked Gemechu about i-Capital Africa Institute and its recent financial summit, Excerpts;

Capital: What is I Capital and why did you establish this organization?

Dr. Gemechu: Even though I came up with the idea there were partners and co-founders when the organization was formed in 2015. Our studies were related to organizations, developing an effective business, managing and developing capital. We began working on a consultancy service to help us ask better questions and understand how companies can be more competitive and effective in the future.

So we decided to establish a consultancy service for public or private organizations. We believe that organizations need to work on human development. Often, businesses believe the way to success is to invest in high tech equipment or infrastructure but in reality developing the skill of human resources is vital.gemechu-waktola-2

We focus on four major areas, a platform for knowledge sharing and critical voices, human capital development, advisory services, and data. We take research based practices and share the knowledge with industries to enhance their policies or practical activities. We also work on developing skill sets through our human capital development packages and management trainings. Most of the packages are undertaken via international partners like the International Financial Corporation (IFC), the private sector wing of The World Bank.

Unlike other countries it is difficult to get data in an organized fashion from most companies in Ethiopia. This makes it difficult to analyze past experiences and develop future strategies and better policy  or new products, so we work with companies to get better data as well.

Capital: The private sector has been growing but lack of managerial skills is still a major challenge. Many businesses are run by traditional methods as opposed to considering new knowledge or research what are you doing about this?

Dr. Gemechu: Knowledge is not what has driven the Ethiopian economy. For example the civil service institutions have ample employees, but we do not get innovative service and the bureaucracy strangles many since advancement is not based on competency, capacity, skill and character. Proactive based knowledge and skills have to be improved, you see this in businesses that come from abroad. Local businesses have to enhance the knowledge and skills of their employees to compete. For example if you do not really have a grasp of technology and how to operate it you can’t be competitive. Funding is less of an issue than this. Figures indicate that existing finance is 10 times higher than the total GDP of the world so the challenge is how to manage the finance based on the talent of change agents. Local business must learn to value talent.  Our human capital conference is designed to emphasize this.  We want to encourage people to recruit top talent.

Capital: You’ve held several major events. Two weeks ago the I Capital Africa Institute carried out the second Annual East Africa Finance Summit at the Economic Commission for Africa. What was the main objective?

Dr. Gemechu: In the knowledge economy we have to include the experience of many. That is why we call it the East African Summit.  We wanted to learn from others in our region. It was a public private partnership co-organized with public universities and other public institutions. Last year was our first time running it and we came up with a central theme of building competitive and cooperative financial institutions in the region. Participants came from Kenya, Germany, the US, and other areas.

Several impressive papers from Kenya and the National Bank of Ethiopia were presented. One difference between Kenya and Ethiopia is that they believe in innovation first followed by regulations whereas in Ethiopia the reverse is true. Insurance, innovation and human capital were also discussed in the sessions. The implementation of a capital market that Ethiopia experienced about a century ago was also reviewed.

This year we focused on ‘preparing for tomorrow building a proactive finance sector in East Africa’. Things are changed frequently, there are many disruptions. There were 13 papers presented and a policy roundtable held.

Capital: Similar issues came up in both summits; merging, regulating the insurance industry and a secondary market. Why do you think this occurred?

Dr. Gemechu: Well the issues keep coming up because they are not adequately resolved. For example the capital market problem was mentioned at both summits because it is a key issue and there has been some progress for example this year there is more data showing a cost benefit analysis of establishing a stock market.  The lack of a stock market has affected projects and finance in the country. An organized and well structured secondary market would benefit the private sector. Mergers were mentioned by an expert from South Africa saying they would enhance regional competitiveness.

Capital: What is your perspective on this specific issue?

Dr. Gemechu: I believe in market power as opposed to forced mergers but the capital requirement will force banks to merge. The economy needs strong financial institutions.

Capital: What are the points raised regarding insurance businesses in Ethiopia?

Dr. Gemechu: The insurance sector got a lot of attention in the session.  The consensus was the central bank was not the right body to govern the insurance industry. Lack of creativity and innovation are others concerns.  Competiveness depends on premium prices. Lack of new products and skilled labour are major challenges the insurance sector is facing.

Capital: What else have you been doing?

Dr. Gemechu: In addition to the financial sector, we have a knowledge sharing platform and we have cement, concrete and energy events. The other major event that we are directly involved in is the continental human capital development platform. Our main intention is not to facilitate these events; instead we look at them as our main products. Networking and trust are crucial in the business so we hold these events to develop these networks. When we develop other products we will increase our trust and network. The knowledge sharing platform helps us include new products and reach out to potential customers. We have to make people more employable. Jobs are going to change and disappear in the new future so we have to be prepared.

The Islamic Corporation for the Development of the Private Sector (ICD) and African Export-Import Bank sign Line of Financing agreement

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The Islamic Corporation for the Development of the Private sector (ICD) and the African Export-Import Bank (Afreximbank) signed a Line of Financing agreement for a USD 100-million facility.
The USD 100-million facility will be utilized by Afreximbank to provide Shariah-compliant financing to small and medium-sized enterprises (SMEs) in its member countries in Africa. Afreximbank has a solid pipeline of projects in the industrial, communication, technology, healthcare, construction and agricultural sectors that would be financed by the ICD Line of financing.
On this occasion Khaled Al Aboodi, CEO of ICD, commented: “The proposed financing facility is a token of a good partnership between ICD and Afreximbank, with the purpose of supporting private sector businesses with a Shariah compliant facility structure in our common African member countries”.
“This facility will give a boost to our effort to implement our current strategy which prioritizes intra-African trade; intra –African investments and export manufacturing of the labour intensive type,” said Amr Kamel, Executive Vice President at Afreximbank.“It will also promote our knowledge in Islamic finance and provide us with additional manoeuvring capacity in terms of product offerings to our clients.”
“We are delighted that ICD has chosen to partner with us in the pursuit of Africa’s trade development. This collaboration will contribute to, the objective of fostering sustainable economic growth in the member countries of our two institutions, leading to job creations, contribution to export and Islamic finance development, among others,”Mr. Kamel added.
The key economic and financial developmental impact will be, but not limited to; developing private sector, especially SMEs, to help expand the real economic growth based on value creation, and promoting Islamic Finance based on the pipeline of AFREXIMBANK projects.

France signs USD 253 million loan agreement to boost African Development Fund

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The African Development Fund (ADF) has signed a significant concessional donor loan agreement with the Government of France to the tune of USD 253 million as support for the 14th replenishment of the Fund.
Established in 1972, the ADF represents an enduring development partnership between African countries and donors. The Fund is part of the African Development Bank Group and helps to improve the lives of millions of people across Africa through loans and grants to projects and programmes.
Its resources are replenished by donors every three years. The 14th replenishment is intended to mobilize the funds necessary for the period 2017 to 2019.
The acting Vice-President for Finance and Chief Financial Officer at the African Development Bank, Hassatou N’Sele, signed the ADF concessional donor loan agreement with the Deputy Chief Executive Officer of Agence française de Développement (AFD), Jean-Pierre Marcelli, in Paris.
The Agence française de Developpement negotiated and signed the loan agreement on behalf of the French Treasury as part of the contributions of France to the Fourteenth Replenishment of the Resources of the African Development Fund (ADF-14).
The move by France is the first time a donor country would sign a concessional donor loan agreement for the ADF since the Fund management and donors agreed in November 2016 to include a loan component within its financing framework.