The state owned Commercial Bank of Ethiopia targeted to earn 8.8 billion birr profit by the middle of this fiscal year. However, they are far behind that goal because hard currency earnings have been lagging. This is largely due to the recent devaluation of the birr and poor export earnings.
According to data that Capital obtained, 3.67 billion birr was earned during this time and hard currency exchange was 28 percent of that amount.
Sources at the bank told Capital that the recent birr devaluation led to a one hundred million birr loss.
“The LC which was open before October for exporters cost us four birr per dollar because they bought the dollar from us at 23 birr but the devaluation caused the dollar to be sold at 27 birr. The other reason is our bank has not been earning a large amount of money from exports, previously over 60 percent of exports passed through our bank but now it is less than 30 percent,’’ the source said.
Capital tried to reach CBE’s communication officer but to no avail.
“Savings and collections from loans are going well in a majority of our branches which is positive news for the bank and as you know the some of the profit goes to the government for development so if we don’t make a lot of profit it affects development.’’
The source also added that the National Bank of Ethiopia rejected CBE’s plan to allow its customers to use 40 percent of their export earnings to import unrelated items from the export work they do in order to earn dollars.
NBE redirected CBE to follow the old plan that required customers to fully use their export earnings on importing items related to their work in order to receive hard currency.
With the current procedures imported items that are paid for with hard currency and pass through CBE get a commission of 1.5 percent and the National Bank of Ethiopia also obtains the same percentage.
In the last fiscal year CBE earned close to 32 billion birr in revenue. Of which the gross profit before tax is 14.6 billion birr. The bank has collected USD 4.5 billion via remittances export trade and other businesses.
CBE half year profit way below target
Digital in 2018: Report shows fast growing internet use in Africa
According to the Digital in 2018 Report released recently, there are 16.4 million Internet users in the country with Internet penetration at 15 percent. Out of those 3.6 million are active social media users. The report states that well over half of the world’s population is now online, with the latest data showing that nearly a quarter of a billion new users came online for the first time in 2017.
Africa has seen the fastest growth rate with the number of Internet users across the continent increasing by more than 20 percent year on year.
Data on Ethiopia shows that annual growth for Internet users is at 37 percent and the number of active social media users is growing by 20 percent. Findings show that majority of Ethiopians access the Internet from a mobile device. Top three most searched teams on Google are ‘Facebook’, ‘News’ and ‘Ethiopian’.
According to the report, much of this year’s growth in Internet users has been driven by more affordable smart phones and mobile data plans. More than 200 million people got their first mobile device in 2017, and two thirds of the world’s 7.6 billion people now have a mobile phone.
Data also shows that more than half of the handsets in use today are smart devices, so it is increasingly easy for people to enjoy a rich Internet experience. Social media use continues to grow rapidly and the number of people using the platform in each country has increased by almost one million users everyday during the past 12 months.
More than 3 billion people around the world now use social media with 9 out of 10 of those users accessing their chosen platform via mobile devices.
Sugar’s bitter pill continues
Sugar prices and shortages still sour Ethiopia’s urban markets; but the Sugar Corporation, the sole manufacturer and importer says it is supplying enough volume.
The price escalation and shortage of the sweet has dogged the country for the past several decades as production and imports have failed to meet up with the growing demand and since the beginning of the Ethiopian New Year it has become one of the nation’s major issues.
Even though the problem has not gone away industries that use sugar as an ingredient in their products say they are getting enough to continue production. Gashaw Aycheluhem, Public Relations Head of the Sugar Corporation, told Capital that most of the sugar factories are undertaking production as expected while others just started recently.
He said that Metehara, Wonji, Kesem and Fincha factories are actively operating, while Kuraz 2 and Arjo Dedessa are the others which recently commenced production after the heavy rain that halted their production in the past few months.
“Kuraz 2 which began a trial test in March last year stopped production for six months because the rain affected the sugar cane collection process but since the end of last December the factory has commenced production,” he explained.
He said that Arjo Dedessa also started production, but he declined to give a specific daily production volume.
He also stated that the recently procured one million tons of sugar was imported by four different consignment periods.
“The first batch is 250,000 quintals and is already being transported from the port at Djibouti,” he said.
He said that every month the corporation is delivering up to 600,000 quintals of sugar for three different potential end users; regional customers, consumer associations in Addis Ababa and the manufacturing industry. These are the three end sugar users according to the Sugar Corporation. Gashaw stated that the Sugar Corporation is delivering the sweetener, but it is still scarce for industries and consumers.
A representative of a candy manufacturer who did not want to be mentioned told Capital that for the last several months his company is getting half of the usual quota that it secured before. He also stated that the limited supply has affected their production.
Getachew Birbo, Head of Moha Soft Drink, told Capital that in the past year and a half the supply of sugar has been relatively better than the preceding period. He said that their monthly demand is 3,000 quintals, but currently they are getting 2,200 quintals per month.
Gashaw thinks that the current shortage of their soft drinks is related to distribution methods by consumer associations or regional offices. “Distribution is the responsibility of other relevant bodies,” he said.
Currently the price of sugar is over 40 birr per kg if it is available in the market. The stated price is about three times the original price.
Consumers and some service sector professionals are complaining about the shortage. Some in the service sector including big hotels and cafes say they are unable to serve hot drinks due to lack of sugar. Customers stated that it is common to see a sugar shortage in cafes.
According to users the price of soft drinks at retail markets has also increased. Shop owners say this is because of the soaring price of sugar. However, manufacturers have denied there is an increase. According to the Sugar Corp public relations head, the sugar factories Metehara, Wonji, Fincha, Kesem, Arjo, Tendaho and Kuraz 2 have a sugarcane crushing capacity of 5,000, 6,250, 12,000, 6,000, 8,000, 13,000 and 12,000 tons per day respectively. But this does not indicate the current actual production, only their capacity.
Even though the government had plans to construct and commence production of ten new sugar factories during the first GTP (2010-2015), almost all of its projections failed.
In the past year Tendaho and Kesem that commenced over a decade ago and Kuraz 2, which was constructed by the Chinese company have been finished.
Most of the others were managed by MetEC a state industry developer. Some of these have been delayed of have performed weakly. The government has stated that sugar would be a major source of hard currency, but that has failed to materialize.
Jubilation, defiance as activists, political prisoners released
Celebration filled the air as the 746 prisoners were released on February 14 from the maximum security Kality prison. Prisoners including Andualem Arage, Eskinder Nega and Abebe Kesto, were released after protests in Oromia and Amhara region rocked the country over the past two years.
Abebe told Capital that the people set them free. “It is the peaceful struggle that sets us free.”
Eskinder also said that the struggle for freedom will continue. “I will start the peaceful struggle now not tomorrow,” he told Capital.
Andualem also said that he is happy that he is free. “The struggle must continue. Better things should come for all of us and a bright sunshine of democracy must shine in Ethiopia,” he said.
Their relatives and supporters surrounded the main prison gate in the afternoon cheering them as they walked free.
On February 13, Oromo Federalist Congress members including Bekele Gerba, Gurmesa Ayano, Adisu Bullala and Dejene Tafa were also released in hopes of reconciliation.
Bekele Gerba, secretary general of the Oromo Federalist Congress (OFC), was arrested in December 2015 after mass protests broke out in the Oromia region over accusations that farmers were being forced to sell land with scant compensation.
He was held initially on terrorism charges, later reduced to incitement to violence.
Outside Ethiopia, the international community reacted in a positive yet cautious manner. German Chancellor Angela Merkel spoke to Prime Minister Hailemariam Desalegn via phone on Monday, February 12. Her office stated that the chancellor welcomed the fact that Ethiopia had released a large number of political prisoners since the start of the year and encouraged the premier to take further steps in opening the country democratically.
The EU reacted similarly. “The release of thousands of prisoners in the past couple of weeks, including the journalist Eskinder Nega and the leader of the opposition Andualem Arage is a step in the right direction. It’s particularly important in view of this year’s local elections,” an EU spokesperson told. “We believe that the grievances expressed by the political protesters should be addressed through an inclusive dialogue with the opposition and all the components of civil society.”
The rights group Amnesty International which had been campaigning for the release of the prisoners appealed to the government to change its method of dealing with political critics. “We hope the release of this courageous journalist [Eskinder Nega], along with hundreds of other prisoners, heralds a new dawn in the Ethiopian government’s handling of political dissent, a dawn of tolerance and respect for human rights,” said Amnesty’s deputy regional director Sarah Jackson in a statement.
“The authorities must also take steps to reform the legal system under which arbitrary detentions and torture of dissidents have been allowed to flourish.” A good way to start, Jackson said, would be by reforming the country’s anti-terrorism law. “If the Ethiopian government is serious about turning over a new leaf, it must order an impartial and independent investigation into allegations of torture and other ill-treatment of prisoners,” she stated.
In addition to the prisoner release, state prosecutors also dropped charges against several government critics. Bloggers Befekadu Haile and Natnael Feleke of the website Zone 9 were arrested four years ago and accused of inciting violence through their work.
Major protests over the issue of land initially broke out in 2015. Oromia, the country’s largest province, surrounds the capital Addis Ababa and the government had proposed expanding the city’s development boundaries into Oromia. In October 2016 the government declared a state of emergency. This gave the government the power to detain people and restrict the right to free speech or to gather publicly, as well as, the right to deploy the army.
(Compiled from agencies)
