Tuesday, February 11, 2025
Home Blog Page 5

Bridging Continents

0

In an exclusive interview, Jandyr Ferreira dos Santos, the Brazilian Ambassador to Ethiopia and Permanent Observer of Brazil to the African Union, shares insights on the evolving diplomatic relationship between Brazil and Ethiopia, the significance of Brazil’s presidency of the BRICS, and the potential for enhanced cooperation across various sectors. With 72 years of diplomatic ties, the two nations are poised to deepen their partnership, particularly in the fields of agriculture, technology, and cultural exchange. Ambassador Ferreira dos Santos emphasizes the importance of collaboration in addressing global challenges while highlighting Brazil’s commitment to supporting Ethiopia’s development goals. As both countries navigate their roles within the Global South, the ambassador outlines a vision for a resilient future built on mutual interests and shared values. Excerpts;


Capital: How would you assess the current state of diplomatic relations between Brazil and Ethiopia and what areas do you believe hold the most potential for growth?

Jandyr Ferreira dos Santos: Brazil and Ethiopia established diplomatic relations 72 years ago and ever since have enjoyed very friendly relations. We have been gradually deepening our ties, increasing our bilateral trade and establishing cooperation initiatives in different fields. The reopening of the resident Embassy of Ethiopia in Brasília in March 2023 marks a significant milestone in the process of strengthening bilateral relations between our countries. It embodies the willingness of both nations to enhance their diplomatic engagement. The embassy’s presence in my capital underscores Ethiopia’s commitment to expand its bilateral relations with Brazil. For many years, Brazil and Ethiopia have collaborated across various fields, including trade, investment, and development cooperation. One particularly promising area of collaboration is agriculture cooperation, in which we are set to expand our already existing engagement through the signing of a MoU between the Brazilian and Ethiopian ministries of agriculture this year, which will provide the platform for establishing technical cooperation projects aimed at boosting agricultural productivity and ensuring food security for our nations. Agriculture has the potential to be a cornerstone of Ethiopia-Brazil relations. Another initiative that is worth mentioning is the cooperation project called Cotton Ethiopia developed by the Brazilian Cooperation Agency (ABC), whose objectives are to provide training in cotton crop management and to implement technical demonstration units (UTDs), which aim to test the adaptability and performance of the varieties used in the country. The technical cooperation between Brazil and Africa in the cotton sector is Brazil’s most important cooperation program in the continent, which has contributed to increasing the income of farmers involved in the projects and improving the living conditions of local communities.

Capital: As Brazil assumes the pro-tempore presidency of BRICS for the fourth time this year, which areas your country intends to focus on?

Jandyr Ferreira dos Santos: On January 1st Brazil assumed the pro-tempore presidency of BRICS for the fourth time, guided by the motto: “Enhancing the Global South Cooperation for a More Inclusive and Sustainable Governance”. Two pillars and five central objectives will guide the Brazilian presidency. The pillars are reform of global governance, and cooperation within the Global South. Under these pillars, the Brazilian presidency will pursue five central objectives: i) Monetary and Financial System: diversification of payment methods and platforms and use of local currencies to promote trade and investment; ii) Artificial Intelligence (AI): promotion of inclusive and sustainable governance of AI to generate socioeconomic development; iii) Climate Change: financial architecture appropriate for the climate change regime; iv) Global South Cooperation: multiply cooperation projects aimed at inclusive and sustainable socioeconomic development, with a focus on access to the health system; v) Institutional Development: strengthen the BRICS structure and its cohesion, ensuring the effective integration of new members. Brazil expects Ethiopia participation in all of the more than 100 meetings scheduled to take place online and in person in Brazil, as well as the visit of PM Dr Abiy Ahmed to Brazil in July to attend the BRICS Summit.

Since the creation of the term BRICS, the original members have increased their share of global GDP. In 2003, the economies of Brazil, Russia, India, China and South Africa together accounted for just over 20% of global GDP in PPP (at current prices); in 2023, the grouping increased its share to 33% of global GDP in PPP, totaling approximately US$60 trillion. Considering the recent accession of Indonesia and the five members that joined in 2024 (Saudi Arabia, UAE, Egypt, Ethiopia and Iran), the BRICS share of global GDP increased to approximately 39.3% in 2023. The IMF projects that, in 2024, all BRICS countries will have shown positive economic growth, with rates ranging from 1% to 6%.

In international trade, all original BRICS members, including South Africa, have increased their presence, jumping from an aggregate share of almost 18% in 2003 (at current prices) to 22% in 2023. With the accession of Indonesia and the five new members in 2024, BRICS’ share in international trade reached 26% in 2023. Intra-BRICS trade has grown significantly since the beginning of the 21st century. If in 2000, the values ​​were close to US$ 17 billion, in 2020, they reached US$ 334 billion, attesting to the complementarity of the economies.

In terms of population and territory, BRICS represents 49.5% of the world’s population (with a growth trend above the global average), 38.3% of the world’s territory and has members on 4 continents (America, Asia, Europe and Africa). In the area of ​​energy and natural resources, BRICS represents 43.6% of world production and 44% of world oil reserves; 38% of world production and 54.7% of world natural gas reserves; 78.5% of production and 76.5% of the global consumption of natural coal; and 72% of the world reserves of rare earth minerals.

Capital: What initiatives are being pursued to enhance economic cooperation between Brazil and Ethiopia, especially in sectors like agriculture, technology, and renewable energy?

Jandyr Ferreira dos Santos: Given the increasing global interconnectivity, the future of Ethio-Brazilian relations is very promising, with significant potential for expansion and deepening of our partnership across several areas. In this context, the Embassy of Brazil in Addis Abeba with the support of the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) organized a multisectoral business seminar in December 2023, which brought together business leaders and government officials to explore opportunities for collaboration between Brazil and Ethiopia. The event highlighted the potential for enhancing economic ties and promoting Brazilian exports to the Ethiopian market and vice versa.  In the years ahead, there is considerable scope for enhancing trade and investment flows between our two countries. Ethiopia’s growing market, its position in the African continent, and its diverse investment opportunities are fully aligned with Brazil’s expertise in sectors such as agriculture, clean energy, and technology. As both nations prioritize agricultural development, there is significant potential for deepening cooperation in agricultural innovation and technology transfer. Ethiopia can benefit from Brazil’s expertise in areas such as precision agriculture, crop management, and biotechnology, which can help address food security challenges and boost productivity. The future of Ethio-Brazilian relations is ripe with possibilities. By focusing on areas of potential expansion, Ethiopia and Brazil can build a deeper, more resilient partnership that leverages our shared strengths and contributes to both nations’ development goals.

Capital: With the arrival of the first Brazilian agricultural attaché to Ethiopia do you believe her appointment will lead to advancements in the trade and cooperation between Brazil and Ethiopia as well as contribute to Ethiopia’s agricultural development?

Jandyr Ferreira dos Santos: The newly arrived first Brazilian agricultural attachée to EthiopiaMrsFabiana Alves is a highly skilled professional whose work in Addis Abeba marks a significant step forward in the strengthening of Brazil-Ethiopia relations, particularly in the agricultural and agro-industrial sectors. Her expertise will complement the work of our embassy staff, and she will be pivotal in advancing technical and scientific cooperation between our two nations. We can expect a high commitment from her to expand joint research projects, technical training programs and knowledge sharing in areas such as sustainable agriculture/farming practices, bio-inputs and low-carbon agriculture and resilient crops. Additionally, she is also committed to enhancing cross-border trade, especially giving support to the private sector involved in production and trade, as well the public sector in the creation of disease-free zones, disease diagnosis and surveillance and animal and food traceability. Brazil holds a global leadership position in tropical agriculture and is one of the world’s leading agricultural exporters. There is an untapped potential for Brazil’s agricultural products and processed foods in the Ethiopian market, in particular vegetable oils, ethanol, sugar, meats, dairy, canned foods, and bakery products. On the other hand, Ethiopia exports high quality agricultural products to Brazil, with emphasis on Ethiopian coffee, considered one of the best in the world. As Brazil is a large consumer of coffee, demand for higher quality beans has increased in recent years. Additionally, Ethiopia exports spices like pepper and cardamom, which are highly valued in Brazil for their distinctive flavors and culinary qualities.  Furthermore, Ethiopia’s recent entry into the BRICS grouping presents new opportunities for Brazilian agribusinesses to explore investments in Ethiopia’s agricultural and bioindustry sectors, further deepening our economic ties. As BRICS cooperation strengthens, Ethiopia’s position within this group will enhance Brazil’s engagement with Africa, creating avenues for both nations to collaboratively tackle global agricultural challenges.

Capital: How important is cultural exchange in fostering better relations between Brazil and Ethiopia, and what programs exist to promote this?

Jandyr Ferreira dos Santos: Brazil and Ethiopia share many common values. It is worth remembering that most of Brazil’s population declares itself to be of African origin. This growing movement of self-identification with Africa proves that we are proud of our mixed origins and identify many of our cultural traditions, be it in terms of religion, food, music or sports as being of African origin. In this sense, I believe there are plenty of opportunities to collaborate with Ethiopia in culture. Two years ago, for example, we brought to Addis Ababa Brazilian chef Dadá, from the city of Salvador in the Northeast of Brazil, for a food-week. Dadá’s food has a very distinctive African flavor which was highly appreciated. At the end of January this year, the embassy launched the cultural project “Brazilian Tunes in Addis”, which brought renowned Brazilian musicians to Addis Ababa for performances with a view to strengthening cultural exchanges between Brazil and Ethiopia. The event provided a valuable opportunity for the local public to experience the unique sound of Brazilian music. The Brazilian duet composed by the musicians Ivan Sacerdote and Felipe Guedes had a performance held in the prestigious Fendika Cultural Center on January 28, which was open to the general public. Guest Ethiopian musicians were invited to perform together with the Brazilian musicians during part of the presentation.

Capital: In what ways can Brazil support Ethiopia in achieving its various development goals?

Jandyr Ferreira dos Santos: Brazil recognizes the importance of fostering a strong diplomatic and economic relationship with Ethiopia to support its development goals. Brazil can offer support in several key areas, such as agriculture and food security, in which Brazil has extensive experience in innovation, particularly in tropical agriculture; also renewable energy, area in which Brazil has a strong track record, particularly in biofuels and hydropower; and finally trade and investment, which could strengthen bilateral trade relations and encourage Brazilian businessmen to invest in Ethiopia and Ethiopian entrepreneurs to invest in Brazil, which could provide economic benefits and accelerate development for both nations.

Capital: Given Brazil’s leadership in environmental issues, how do you envision collaboration between our countries in addressing climate change and promoting sustainable practices?

Jandyr Ferreira dos Santos: Brazil and Ethiopia are parties to the main multilateral agreements on climate change, such as the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. Ethiopia shares our concerns regarding the impact of climate change in our planet, especially in developing countries. Brazil, which is a major player in multilateral negotiations on climate change, has recently committed to reduce greenhouse gas emissions by 37% by 2025 and by 50% by 2030. Brazil also stands by its conviction that solutions to the climate global crisis demand sustainable development, aiming for carbon neutrality, an increase in the capacity of adaptation, as well as risk reduction. Under the Brazilian presidency of the BRICS this year, my country put forward the motto “Enhancing the Global South Cooperation for a More Inclusive and Sustainable Governance”. Moreover, the Brazilian presidency will also encourage the coordination of efforts on environmental and climate change issues, with a view to the active participation of developing countries at the COP 30, which will be held in the city of Belém in Brazil next November. Brazil will also prioritize strengthening the financial architecture focused on the climate change regime, especially adaptation and mitigation projects in the area.

Capital: How do Brazil’s foreign policy objectives align with those of Ethiopia, and what are the key areas of mutual interest?

Jandyr Ferreira dos Santos: Brazil’s foreign policy objectives align with those of Ethiopia particularly in areas of development, peace, and international cooperation. The state visit of President Luiz Inácio Lula da Silva to Addis Ababa last February symbolized the proximity of the two countries in the context of the Global South and underscored Brazil’s recognition of Ethiopia’s strategic importance on the global stage, highlighted with the admission of the country as a BRICS full member. President Lula’s visit not only reinforced our bilateral relations but also highlighted Brazil’s dedication to fostering closer cooperation and mutual support. During the visit, President Lula engaged with Prime Minister Dr Abiy Ahmed to review issues on the bilateral agenda, such as cooperation for development, promotion of trade, and international themes of common interest. The two leaders paid particular attention to the fight against hunger and poverty; the protection and development of forests; the fight against climate change; and the reform of international organizations. Still in February 2024, President Luiz Inácio Lula da Silva attended the African Union Summit, which highlighted Brazil’s commitment to strengthening ties with the African continent. In his speech, President Lula reinforced the opportunities for cooperation between the countries of the continent and Brazil and asserted that, during the Brazilian presidency of the G-20, which took place during 2024, the three central axes of the group would be social inclusion, fight against hunger and poverty and reform of global governance. We were honored that the African Union became a full member of the G20 during the Brazilian presidency of the group.

Capital: What is your vision for the future of Brazil-Ethiopia relations, and what are the most significant challenges you anticipate in achieving that vision?

Jandyr Ferreira dos Santos: I am very optimistic about the future of Brazil-Ethiopia relations as our countries share a common vision of building a robust partnership and a mutually beneficial cooperation. We aspire to strengthen our bilateral ties across various sectors, including trade, agriculture, and cultural exchange, fostering a relationship that supports sustainable development and regional stability. Brazil aims to increase trade and investment flows with Ethiopia, creating opportunities for both countries and contributing to economic growth. Regarding sustainable development initiatives, Brazil and Ethiopia have synergies to collaborative projects in renewable energy, and technology transfer, which could be instrumental for both countries to achieve its development goals while sharing mutual expertise.

NBE set to revise non-performing loan ratio amidst surge in mobile lending initiatives

0

The National Bank of Ethiopia (NBE), the country’s central bank, is expected to revise the maximum ratio of non-performing loans (NPLs) for financial institutions participating in its digital lending program. Dashen Bank, a leader in mobile lending through Ethio Telecom’s Telebirr super app, is awaiting NBE’s approval to launch mobile lending on its new platform.

Currently, NBE regulations require Ethiopian banks to maintain their NPLs below 5% of their total loan portfolio. This mandate forces banks to actively manage their loan portfolios to ensure compliance.

However, banking industry analysts argue that the government should reconsider the NPL cap if it is serious about achieving its financial inclusion goals.

They suggest that the NBE is aware of the need to relax these regulations, especially for mobile lending initiatives.

Experts have mentioned that the regulatory body is reevaluating its directives in this regard.

Yohannes Million, Chief Digital and Information Officer at Dashen Bank, emphasized that mobile lending is crucial for financial inclusion and is gaining traction in Ethiopia.

He highlighted that Dashen Bank, a frontrunner in technology-driven banking and mobile lending, has disbursed over 14 billion birr in loans through Telebirr, the country’s first mobile financial services app.

Yohannes confirmed that the NBE recognizes the necessity of reconsidering the NPL cap for loans issued under mobile money programs.

He stressed the importance of expanding access to credit, stating, “One of the key reasons to increase the number of borrowers is the Telebirr scheme.”

Yohannes pointed out that while the number of bank credit accounts had stagnated at around 400,000 for many years, the figure has now surged to millions, including many with very small loans. He underlined that a society familiar with accessing credit, repaying loans, and engaging in business transactions is vital for driving economic development.

To promote greater financial inclusion, Yohannes urged the government to create a more favorable environment for the financial sector by lowering NPL requirements for tech-based microfinance schemes, as seen in other countries, including neighboring nations.

He argued that a higher NPL rate would not adversely affect the banking industry, as increased public familiarity with credit systems would lead to better repayment practices. “When the public gains experience, it becomes easier for them to use and repay credit rather than defaulting,” he explained.

Yohannes also noted that digital payment systems are increasingly used for taxes and public service payments, which reduces the likelihood of defaults. He added that individuals who fail to repay loans would be blacklisted, preventing them from accessing similar services in the future. This, he said, would encourage responsible borrowing and repayment behavior.

In addition to its collaboration with Telebirr, Dashen Bank has recently launched its own Super app, the first of its kind in the banking sector, which will also provide mobile lending services.

Yohannes stated that one of the bank’s main objectives is to encourage customers to rely more on digital platforms instead of visiting branches for their banking needs.

The Super app includes a variety of innovative banking and payment solutions, along with customer chat functionality, all designed to simplify the user experience.

“The majority of the solutions on the platform are globally competitive, and its features are cutting-edge,” Yohannes noted. He also mentioned that the app has been well-received since its launch, and Dashen Bank is committed to leading the way in introducing neo-banking services to the public.

Currently, 50% of Dashen Bank’s customers no longer visit branches due to the convenience of its technology-based services.

Yohannes emphasized the importance of encouraging more customers to adopt modern banking systems, which have proven effective in enhancing customer satisfaction. “We aim to continue setting the standard for digital banking in Ethiopia,” he concluded.

Independent media seek fair ad spending amidst financial woes

0

The Ethiopian Media Council (EMC) is advocating for equitable distribution of commercial advertising (ad) revenue to ensure the financial independence of independent media institutions in the country, highlighting a significant imbalance in resource allocation. The EMC emphasizes that while state-controlled media receive over five billion birr annually, independent media outlets struggle for financial survival and lack adequate support. This disparity is viewed as politically motivated, hindering healthy competition and exacerbating media polarization.

Representing numerous media institutions and thousands of industry professionals, the EMC recently presented its agenda for Ethiopian media institutions and journalists to be considered in the national dialogue process. This agenda is the result of extensive research, collaboration, and data collection involving media professionals, academia, civil society organizations, and international partners.

According to Amare Aregawi, Chairperson of the EMC, the agenda reflects a thorough assessment of key challenges and biases within the Ethiopian media landscape. The council has identified 79 key issues, narrowing them down to 19 priority topics and ultimately submitting six major media agendas to the National Dialogue Commission (NDC).

Financial sustainability and advertising fairness are central to the EMC’s proposals, aiming to eliminate unfair ad practices and enable equitable resource allocation and financing for media operations. This reform is expected to foster healthy information competition and fair dissemination, contributing to national consensus.

Another key issue presented to the National Dialogue Commission is “Public Media Management.” The EMC argues that public funds should not be used in ways that disadvantage private media or undermine fair competition. They also raised concerns about regional disparities and governance issues within public media, which they say hinder national consensus.

The NDC, established to address Ethiopia’s deep-rooted socio-political challenges and promote reconciliation, unity, and lasting peace, is seen as a vital platform for these discussions. The media is expected to play a crucial role in promoting national consultations and delivering information to the public.

Additional agenda items submitted to the Commission include issues related to freedom of information, the right to access and disseminate information, gender equality and the status of female journalists, and digital transformation and media infrastructure.

Ethiopia eyes third telecom operator by late 2025

0

Ethiopia’s telecommunications market is poised for further expansion with the anticipated arrival of a third telecom operator by late 2025 or early 2026, according to the Ethiopian Communications Authority (ECA). While the ECA is temporarily pausing the issuance of new licenses in mid-2023, this decision aims to create a more favorable investment environment before welcoming additional global players.

Balcha Reba, Director General of the ECA, explained that this temporary suspension will allow for a reassessment of the current market situation and the implementation of necessary reforms to attract and ensure long-term investment. “Since there are new conditions that require investment, work is being done to see if it is appropriate and to make further improvements if necessary,” Balcha stated. The ECA is carefully evaluating market volatility, the existing regulatory framework, and broader policy factors to attract reputable and qualified operators.

The addition of a third telecom operator is expected to bring several benefits to Ethiopia, including increased competition, improved quality and availability of telecom services, spurred innovation, enhanced network coverage, and reduced costs for consumers.

Ethiopia’s telecom sector has undergone significant changes since 2018, when the government recognized its vital role in the country’s development and embarked on a path towards free markets and privatization. For decades, state-owned Ethio Telecom held a monopoly, limiting competition and innovation. A key milestone in this transformation was the licensing of Kenyan telecommunications giant Safaricom in 2021, marking the arrival of the first private telecom operator in Ethiopia.

Safaricom has experienced substantial growth, reaching an estimated 42 percent population coverage, demonstrating the potential for rapid expansion in the newly liberalized market. This success has informed the government’s decision to introduce a third operator and its current focus on creating favorable investment conditions.

However, previous attempts to issue a second license have been met with challenges, including a lack of satisfactory bids and concerns about political instability. In November 2023, the government reportedly confirmed it had cancelled the process of issuing a third telecoms license due to a lack of interest.

Despite past setbacks, the ECA’s current strategic approach aims to maximize the benefits for Ethiopian citizens by ensuring a strong and competitive telecom ecosystem before welcoming a third operator[6]. In October 2024, Brook Taye, CEO of Ethiopia Investment Holdings, stated that Ethiopia still plans to welcome a third mobile operator due to increased demand for B2B and B2C broadband services. He also revealed plans for Ethio Telecom to list on Ethiopia’s new stock market.