The Ethiopian Grain Trade Enterprise (EGTE) which distributes wheat to Ethiopia’s nine regions and two administrations is running out of stock due to delayed procurement of wheat from abroad.
The Enterprise had been distributing 640,000 quintals per month to trade bureaus, universities, and prison administrations and has only 50,000 quintals remaining in its stock which has caused them to delay this month’s distribution.
Currently four million quintals of wheat are under the procurement process but it will take over two months before this reaches EGTE.
EGTE, out of concern, has requested one million metric tons of wheat as a loan from the Emergency Food Security Reserve Administration (EFSRA).
However they have not gotten a response, so the Agency has made a second request, this time to the National Disaster Risk Management Commission (NDRMC) which did approve an unspecified amount of wheat.
Due the shortage EGTE cut the supply of wheat by 50 percent last month. They have also been purchasing wheat from the local market for between 1,000-1,200 birr per quintal.
A source at the Enterprise told Capital that shortages of bread and other products could occur if wheat is not loaned out or procured faster.
“Several months ago we cut the supply of wheat by 25 percent but we recovered soon because of the speedy procurement process but now it has slowed down and our stock is almost empty. There is only a small amount reserved for universities, defense and prisoners in jail. We are waiting for NDRMC to save us from our current problem.’’
Under normal circumstances regions and administrations receive the following number of quintals of wheat per month: Oromia (125,305), Amhara (72,550), Tigray (66,417), Addis Ababa (168,000). Somali (21,716), Afar (2,875), Gambella (20,700) Beneshal Gamuz (20,001).
EGTE sells the wheat at 550 birr per quintal to the trade bureaus who in turn sells it to the flour factories and then finally to the bakeries.
Last January the government canceled a 2.6 billion birr contract awarded to Pakistan based Shakeel & Company to supply 400,000 metric tons of wheat because they didn’t provide a performance guarantee and subsequently didn’t supply the wheat.
Last March, the Public Procurement & Property Disposal Service, PPPDS, opened a tender to supply four million quintals of wheat. The tender includes 10 lots, each with 400,000 quintals. Of this amount 500,000 quintals are expected to be supplied this fiscal year and the rest during the next fiscal year. Currently, two million quintals of wheat on its way to the country but is facing delays at port of entry. Those two million quintals were supplied by, Promising International Trading, (800,000 quintals) and Hakan Agro Industry (1.2 million quintals).

The new Prime Minister, Abiy Ahmed, invited leaders of opposition parties, civic organizations, and social activists to dinner at the Presidential Palace. He said work should be done to strengthen political parties and build democracy.
Notable opposition leaders like Ledetu Ayalew, Bekele Gerba, Dr. Merarra Gudina, Girma Seifu and Prof. Beyne Petros came to the dinner along with celebrity athletes, Haile Gebreselassie, and Keninessa Bekele.
“For a long time there has not been a strong habit of holding talks and working together for a better democracy in Ethiopia. We have chosen the gun instead of discussions, we have chosen our own way instead of consulting each other. We know through history that division threatens our foreign security. We cannot create a better country unless both government and opposition parties work together for a better democracy.’’
“The truth is plain, that we cannot register sustainable economic growth unless we build a strong political and democratic system in our country, ” he added.
As a government we have a bigger motivation than ever before to see strong political parties because we believe that healthy competition is the key to democracy when strong ideas come, it helps us to do a better job,” he said.
The PM urged opposition parties to come with good ideas instead of wasting time on resentment.
“Creating a new government by force does not benefit anyone, wise people improve something from what they have and transfer it to the next generation. We don’t have to start from zero, we must continue from where we are and we all have the responsibility to do that which will benefit our country. After two years there will be an election and the government will do its best to carry out a free and fair election. More than ever before this is the right time, when we need strong opposition parties and we urge you to continue your discussions with the ruling party which you have already started, we need you to come up with a new sprit to build a strong nation,’’ he said.
“It is a good thing to be interested in working with us. There is a lot of work to be done. I fear that Dr. Abiy’s own party will challenge his attempts to bring change,” an opposition party member said.
Dr. Merera Gudina, leader of the Oromo People’s Congress (OPC) appreciated the new PM’s initiative to work closely with opposition parties .
In related news the PM also traveled to Jijiga and Ambo where he promised that the government would work harder to widen the political space.
He said: “this has been a tragedy that should never have taken place and we will work to find sustainable solutions within a very short time, we will support those who have been displaced as well,” speaking on previous internal conflicts between regions that left many displaced.
During his speech at Ambo Stadium the PM said: “Ambo should be a tourist attraction not a site of violence and we will work hand in hand with the people to achieve this.” Thousands welcomed the PM in Ambo by wearing t-shirts sporting his picture.
The PM was also in Mekele last Friday. He spoke glowingly about the patriotic Tigryans who devoted their lives to freedom. “Tigray is the symbol of Ethiopia. We had an ancient civilization during the times of Axum, a philosopher like Zereyakob was born here and a hero like Meles Zenawi is the fruit of this region. Like they did it before the Tigrynas should work hard to develop their country, democracy and economy .”

Ethiopia’s banks have reported an increasing amount of non-performing loans, Capital learnt.
Sources from financial firms told Capital that the ratio of NPLs have increased, reversing the previous trend. The National Bank of Ethiopia (NBE) recently issued a new rule, mandating that the NPL be less than five percent of the outstanding loan. However according to information Capital obtained, the ratio of NPLs increased since the government devaluated the birr by 15 percent against major hard currencies.
According to experts it is now more common for debtors to not make their payments on time and there have been more defaults. This has occurred after the central bank issued a directive limiting banks’ outstanding loans by 16.5 percent compared with the preceding year, if the person they are loaning the money to is not engaging in an export related business. Furthermore, according to sources in the financial industry, some smaller banks have already maxed out on the amount of loans they are allowed to disburse.
“If a debtor knows they are not going to be able to get a new loan until next year they are less likely to use the money they earn to pay off their loan,” experts explained.
Sources at the financial firms, including higher officials agreed that this is occurring in private banks, although they declined to give more details.
“Even though there is a five percent limit on NPLs before this trend started in most banks you would only see three percent of NPLs, an expert in the financial sector said. He explained that the current condition may affect the youngest banks. Larger banks have more capital, allowing them to follow the National Bank’s 16.5 percent directive.
The private sector has claimed that the new law hinders it from obtaining adequate loans while they are also facing a shortage of hard currency.