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Month: May 2024

Africa Day: Building businesses that improve African lives.

Posted on by Web Master

As we mark Africa Day, people and organisations commit themselves to making a positive difference for the continent. Building a business model that improves lives is the most effective way to achieve this, writes MultiChoice Africa CEO Fhulu Badugela.

As the continent celebrates Africa Day on 25 May, two business priorities come into sharp relief; Businesses must remain profitable to survive, but they must also deliver a net benefit for society.

A unifying purpose

At MultiChoice Africa, we strive to achieve this balance by aligning around a single unifying goal – enriching lives. It’s at the heart of our value proposition of delivering entertainment and services to our customers through technology.

While we aim to be the entertainment platform of choice for African households, we also want to enrich their lives by making a significant contribution to economic development, in the spirit of Africa Day.

MultiChoice also enriches lives through our role in developing Africa’s contemporary cultural heritage, having been entertaining, informing and empowering African communities for more than 30 years.

We also continue to offer value to our customers by using the latest technology to enhance accessibility, and boosting the number of platforms we offer as we develop our hyperlocal strategy of authentic African content for African audiences.

Authentic storytelling

Developing that content allows us to reshape the African narrative through the stories we tell. Through our hyperlocal approach, we not only develop film and television industries in multiple African markets, but we also allow African people to see their stories told by their own people in their own languages.

After 38 years’ operating across the continent, MultiChoice Africa now produces more than 6 000 hours of local content a year, in 40 languages, across 50 countries, reaching more than 100 million people every day.

Our 17 local channels share homegrown shows, in regional languages, on platforms like Africa Magic, Mzansi Magic, Akwaaba Magic, Maisha Magic, Pearl Magic Prime, Abol TV, Kwenda Magic, Maningue Magic and Zambezi Magic.

This has significant cultural and psychological impact. It’s hard to quantify how much it improves someone’s quality of life, when they see their own culture, values and aspirations reflected in the content they consume.

Smash-hit local shows across the continent not only create opportunities for local filmmakers and actors but has also help to showcase African stories on a global platform.

Recent successes have included family drama Sinia, crime drama Danga and Tuko Talk on Tanzania’s Maisha Magic Plus. In Kenya, the Showmax Original crime procedural Crime and Justice is highly popular, while Uganda’s Pearl Magic Prime features drama series Chapterz.

On Zambezi Magic, Wanilata is a reality dating show; while Our Perfect Wedding Zambia is a staple on ONEZED, alongside telenovela Ubuntu, with Afaf, Kuchit, Zuret , and Ye Rekik Menged providing riveting drama on Ethiopia’s Abol TV.

In West Africa, the Akwaaba Magic channel in Ghana is the home of the popular Dede, the story of a naive rural teenager, while Africa Magic channels feature appointment-viewing successes like Date My Family Nigeria and Idols Nigeria.

In Southern Africa, locally produced hits include Zuba and Ten Tamanga Street on Zambezi Magic, O Rio Mahinga on Kwenda Magic, and Maida, Date My Family and Our Perfect Wedding Mozambique on Maningue Magic.

We also strive to ensure we have a pipeline of talented, qualified African creators entering our industry, by investing in training and development through our pan-African MultiChoice Talent Factory (MTF) Academies.

Multiplier effects

Our group’s content investments have had major economic multiplier effects on the continent, employing 3 042 full-time staff, and making enormous contributions to the local economies.

In Nigeria, the Africa Magic channel now produces 700-1 000 hours of original content every year, and buys even more independently produced local content through its online content-licensing portal.

In Ethiopia, MultiChoice has commissioned and licensed more than 138 Ethiopian films and TV shows within two years, for its hyperlocal Abol channels. In Botswana, MultiChoice has delivered local shows alongside MTF skills-transfer partnerships with the Botswana Department of Broadcasting Services.

Longevity through alignment

In every market, MultiChoice Africa also makes a material contribution to the economy through tax revenues, investments in broadcasting technology and sponsorships of local sports leagues, such as SuperSport’s coverage of Zambia’s MTN Super League.

MultiChoice maintains a strong market position due to its established brand presence, extensive content library, and investment in local programming. Our focus on innovation and customer satisfaction has seen us build resilience in a rapidly evolving media landscape.

If there is a learning in this, it is that when the interests of all stakeholders are aligned, then better business makes for better lives. As we once more mark Africa Day, we look forward to continuing to provide Africa with quality entertainment content, and opportunities, in ways that improve lives.

GRIPPING DIPLOMATIC MANEUVER

Posted on by Kirabon

A handshake between Foreign Minister Taye Atsqeselassie and his Saudi counterpart, Prince Faisal bin Farhan bin Abdullah, seems to have concluded a meeting in Riyadh last week. The backdrop to this meeting includes Ethiopia’s ongoing efforts to repatriate its citizens from Saudi Arabia, a process that has been in motion since 2018. In April, Ethiopia’s Foreign Ministry announced plans to repatriate around 70,000 people, continuing efforts to return “citizens who are in a difficult situation.” According to the International Organisation for Migration (IOM), more than half of the 750,000 Ethiopians residing in Saudi Arabia entered the country unlawfully.

Saudi Arabia is known for its strict immigration rules, and the hardships Ethiopian migrants face have been severe. A report from Human Rights Watch in August 2023 disclosed that Saudi border guards killed at least hundreds of Ethiopian migrants and asylum seekers trying to cross the Yemen-Saudi border between March 2022 and June 2023. Taye’s visit to Saudi Arabia is seen as part of a broader strategic move to diversify Ethiopia’s international alliances and fortify ties with the Gulf countries. During his trip, Taye met with Hassan Moejeb Alhwaizy, the board chairperson of the Federation of Saudi Chambers (FSC). Last week’s visit followed a high-level delegation led by Deputy Prime Minister Temesgen Tiruneh, who discussed bilateral cooperation with Prince Faisal about a month and a half ago.

The winds of diplomacy under Prime Minister Abiy Ahmed’s administration appear to be shifting, forging new connections and reinforcing existing ones in the Gulf region.

Celebrating Inflation “Triumphs” While the Economy Gasps for Air

Posted on by Kirabon

For a long time, the debate among Ethiopia’s policymakers and those in the academia centred on the effectiveness of monetary policy measures in impacting the real economy, particularly inflation. In a country where the majority live on a subsistence rural livelihood and a significant segment of the population operates within the informal economy, it was unsurprising to witness a silent consensus. The central bank was viewed as helpless in using interest rates to tame inflation, leaving fiscal policy as the primary tool for macroeconomic stabilisation.

However, recent developments suggest a shift in this paradigm.

Central Bank Governor Mamo Mehiretu and his team at the National Bank of Ethiopia (NBE) appear to have overturned this long-held view. Unlike his predecessors, Governor Mamo chose to take the liberal orientation of central banking, setting targets for inflation and prioritising price stability as anchors of his policies. No other central banker dared to commit publicly to clearly defined goals.

Inflation, which has plagued Ethiopia for decades, showed a noteworthy retreat, dropping to 23.3pc in April 2024 — a marked decline of 10 percentage points compared to the same period last year. The Governor and his team appear to be on track to meet their goal of reducing year-on-year inflation to below 20pc by July this year. Their moderate success can be attributed to stringent monetary policy measures, including lowering broad money growth from a high of 58pc last year to 28pc last month. Finance Minister Ahmed Shide also reported to federal legislators that his government has curtailed its direct borrowing from the central bank.

However, this aggressive position on monetary tightening demands closer scrutiny beyond policymakers’ celebratory rhetoric. It offers little reprieve for average Ethiopians, whose purchasing power is eroded while job opportunities dwindle.

Indeed, a reduction in the monthly inflation rate is often seen as a positive development in a productive economy, typically driven by manufacturing advancements that boost the supply of goods. However, when price drops stem from reduced credit availability amidst stagnant supply levels, the benefits to household consumption are inconsequential. The potential for recession looms larger, with the sharp contraction in available credit to the private sector threatening more harm than sustained growth.

Despite inflation figures receding, wages remain stagnant, and the Birr continues to depreciate against a basket of major currencies such as the Dollar, Euro and Pound Sterling, leading to negligible changes in household disposable income. The government’s shift from direct central bank borrowing to increased domestic borrowing to finance its budget deficit has crowded out the private sector. As a result, the limited credit available is funnelled into the state treasury rather than finance new capital projects or employment opportunities.

Understandably, the sentiment among many Ethiopians contradicts the official narrative of the road to price stability. Imported goods, largely paid-for forex obtained through the parallel exchange market, reflect the Birr’s value eroded, making any reported deceleration in inflation seem irrelevant to the average consumer. Policymakers must weigh the consequences of crowding out the private sector against the benefits of reducing external loans and operating within a tight monetary policy framework.

Historical parallels offer insights into the complexities of using monetary policy to keep inflation at bay during economic uncertainties.

The 1974 recession in the United States, driven by the Federal Reserve’s tight monetary stance, demonstrates the risks of aggressive monetary contraction. The Fed’s actions, including a major deceleration in money growth and rising interest rates, exacerbated economic decline. Policymaking under uncertainty requires a delicate balance, and the Federal Reserve’s failure to adjust its approach in response to deteriorating economic indicators was a regrettable misstep with painful outcomes.

Ethiopia’s current situation mirrors these challenges.

The Central Bank’s measures, though aspiring to curb inflation, risk undermining economic growth. Higher interest rates by commercial banks reduce consumer spending and business investment, slowing GDP growth. Although less responsive to monetary policy changes than the industrial and service sectors, Ethiopia’s reliance on agriculture confounds the impact of monetary tightening. High interest rates slowed industrial and service sector growth, affecting overall economic performance.

Empirical analysis shows the importance of boosting agricultural output to achieve durable price stability. In an economy where the share of agricultural production in the GDP represents 30pc, its growth negatively affects inflation, indicating that increasing production can help to respond to inflationary pressures effectively. Conversely, growth in the service sector and money supply positively relates to inflation, implying that these sectors drive consumer prices.

Data from the Ethiopian Economics Association (EEA) unveils these dynamics. Efforts to control inflation through monetary tightening may have stabilised prices in the past but also slowed economic activities. In the decade beginning in 2010, Ethiopia’s GDP growth rate fluctuated, corresponding with periods of stringent monetary policy.

Supply-side constraints further exacerbate inflationary pressures. Ethiopia faces issues such as low productive capacity, limited access to land, high import tariffs, and domestic conflicts. These factors, combined with excessive money supply and corruption, are believed to drive inflation upward. Demand-side constraints include monetary and fiscal instability, low savings, high lending rates, and contracting investment.

The redistribution effects of inflation have also widened the gap between different income groups. Households in lower-income groups suffer welfare losses disproportionately. The disparity deepens relative poverty, particularly in Gambella, the Southern, Afar, Oromia, and Tigray regional states.

Addressing these issues requires comprehensive policy interventions derived from the political-economic worldview of the political leadership at the helm of political power. It should be no less disturbing to see that the incumbent Prosperity Party (PP) has never articulated the political economy of its persuasions for public debate.

Ethiopia’s experience also reveals its economy’s structural transformation. The service sector’s rapid growth, outpacing agriculture and industry, has further strained supply-demand balances. In the 2023 fiscal year, the services sector recorded a growth rate of 7.9pc, three times larger than the agriculture sector. Its share in the GDP growth was 3.1pc, while the agriculture sector’s share was two percent. This shift from agriculture-led to service-led growth has increased aggregate demand faster than supply, leading to inflation.

Recorded examples demonstrate the broader implications of monetary policy during such structural transformations of an economy. The Federal Reserve’s approach during the 1970s recession — marked by a rapid deceleration in money growth — can offer lessons for Ethiopia. Policymakers must avoid the extremes of over-tightening or excessive expansion and aim for a flexible and data-driven approach responsive to changes in economic conditions.

The Federal Reserve’s actions, particularly its restraint on money growth and interest rates, were initially justified given the economic data available for policymakers at the time. However, as conditions worsened, a more aggressive monetary expansion was needed. The failure to adjust deepened the recession, demanding a balanced policy response.

Milton Friedman’s wisdom that the choice should not be between inflation and unemployment but between unemployment now and later should resonate among Ethiopia’s macroeconomic policymakers. Efforts to curb inflation by curtailing banks from lending more than the 14pc cap on their previous year loans’ ceilings could trigger deeper economic downturns in the future. The trade-off between suffocating businesses and taming inflation can be managed carefully to avoid irreversible economic damage, such as bankruptcies and underinvestment in capital.

The Federal Reserve’s rigid approach, pegging the federal funds rate within a narrow band, was found to contribute to the money stock’s procyclical behaviour. A more flexible approach, unshackled from rigid interest rate pegs, could have allowed a responsive monetary policy. The central objective should have ensured money growth aligns with long-term price stability while supporting economic activities.

Ethiopia’s lessons from past monetary policy missteps are clear. Governor Mamo and his advisors are wise to balance inflation control with economic growth, ensuring that their measures do not undermine productive capacity or aggravate supply-side constraints.

Degrees of Disconnect

Posted on by Kirabon

Landing a dream job in electrical engineering felt like a given for Meseret Dereje, a 28-year-old graduate from Meqelle University. Five years of rigorous study painted a clear picture in her mind – a “high-paying”, “stable career” awaited. That was four years ago. Although Meseret has submitted countless applications, she has only secured two interviews in her field.

“They either require skills beyond my current level or years of experience I just don’t have,” she said.

Meseret has taken on various jobs, from managing a family-owned cafe to freelancing at a payment collection company. She is currently pursuing a Business Administration degree, hoping for better prospects. But the ultimate solution, she fears, lies far from Ethiopia’s shores.

“I’ve lost hope,” she told Fortune.

Her trials reflect a national issue. There is a sharp contrast between the expectations of employers and young entrants making it into the labour force. Thousands of fresh graduates emerge from universities annually with a loose grasp of theoretical concepts and practical skills.

The average time between completing education and finding work in the country is estimated at around 12.4 months, according to research by the Policy Studies Institute, which reveals that most who found quick employment leveraged connections or were equipped with stand-out skills.

With a 13pc labour mismatch annually, some have opted to join the informal labour market, where they dictate their work hours. One of them is Jabez Solomon, a civil engineering graduate from Dire Dewa University nearly six years ago. He once found employment that aligned with his field, but it was far from what he envisioned.

“They were giving me jobs that an illiterate person could do,” he told Fortune.

Jabez felt the tasks assigned were repetitive and lacked challenge. Discouraged by a lack of mentorship, inadequate wages, and hostile relationships with his employers, he also found the 9-5 schedule clashed with his desire for more flexibility. He opted to drive a family-owned car for a taxi-hailing company and remains regretful of spending five years in a university.

“I decided that working for another person does not suit me,” he said.

Ethiopia has nearly a third of the population in a working age group (18-35). A major portion is employed in the informal sector, which stands at 86pc nationally and hovers around 25pc in the capital. They cite a lack of formal job opportunities, access to education and training, and restrictive labour regulations as reasons. Meanwhile, Policy Institute experts observe most graduates lack proficiency in industry-standard software programs or practical applications of their knowledge.

The 47 public higher education institutions in the country acknowledge the difficulties in teaching the necessary skill set in the fresh graduates they churn out each year.

According to Jemal Abafita (PhD), president of Jimma University, the issue goes two ways. He said the stagnant curriculum needs to be updated based on industry needs while employers should help new graduates integrate into the new environment with training.

“Some treat new graduates like an additional expense,” he said.

The growing mismatch between graduates’ qualifications and employer needs is a concern for many businesses. For years, Hailu Yohannes, founder of Revolution Engineering, has struggled to find suitable mechanical and electrical engineering employees. The three-year-old company designs maintains and installs electrical equipment for industrial businesses.

During job interviews, Hailu often found applicants lacking fundamental knowledge of basic electrical principles or struggling to interpret blueprints, even though they had high grades. He attributes this gap to a potential disconnect between the university curriculum and the practical needs of the industry and worries that graduates might be expecting faster career advancement.

“All they care about is getting a huge salary,” Hailu told Fortune

Hailu has shifted to hiring experienced people on a short-term contractual basis.

“While I value fresh perspectives, our line of work requires commitment,” Hailu told Fortune.

The contrast between employers’ expectations and young entrants in the labour force is not limited to Ethiopia. A recent study in the United States found a high frustration rate (79pc) among employers, concerning Gen-Z employees (aged 27 or younger). About 21pc were fired within their first week, for reasons cited as a sense of entitlement, poor motivation, and lack of productivity.

Those who saw an opportunity like EthioJobs and Dereja, part of the Africa Jobs Network, are tackling the labour market gap by providing technology-based recruitment and job matching services. They post nearly 500 jobs on EthioJobs weekly, matching over 90,000 job seekers with employers in the past four years.

Siham Ayele, the country manager, identifies universities as a contributing factor with many graduates lacking the soft skills sought after by employers. They launched Dereja Academy eight years ago, to offer training programs designed to equip graduates with the soft skills needed to thrive in the workplace.

“Young people these days have several ambitions,” she said ” but employers accommodate few.”

Siham stressed the importance of mentorship in addressing the needs of both employers and job seekers. She observed a massive change following the COVID-19 pandemic, with a rise in freelance jobs offering flexible hours and quicker pay.

“Companies will have to adjust to the new nature of the labour market,” Siham said.

Recruitment issues pose a major threat companies face in meeting their goals. A recent survey by KPMG indicates that nearly 70pc of East African CEOs expected the rising inflation levels to impact their company’s staff retention rates in the coming years. While the working modalities have shifted to remote during and after the pandemic, nearly 80pc of global CEOs expect a return to more traditional office practices, which was not well received by young employees.

Teresa Dereje, 28, a psychology graduate, has held three jobs for three months each, over the past five years. She leaves after feeling underpaid, overworked, or having long commutes to and from work. She has eventually settled into a position as a researcher at the Ministry of Peace, which offers her constant wage raises, fewer tasks, attentive mentors and more downtime.

“This is the perfect job,” Teresa told Fortune.

While the Ministry of Labor & Skills ambitiously targets the creation of three million new jobs annually, poorly integrated data collection makes it difficult to paint a clear picture of the employment space. One promising solution comes in the form of the Ministry’s ongoing efforts with 1,334 Technical & Vocational Education & Training (TVET) programs. These programs provide students with practical skills and industry-recognised certificates, potentially bridging the gap between what graduates learn and what employers require.

Mulu Keni, deputy director of training & institutional capacity at the Ministry, acknowledges the current mismatch between what universities teach and industry needs. He hopes that the recently formed Linkage Council, tasked with analyzing industry demand, will encourage students to pursue fields with high employability rates.

“The world of work is constantly evolving,” Mulu told Fortune.

Initiatives from Dukem TVET College’s focus on employer needs to ASTU’s industry collaboration and practical skills training, offer a glimmer of hope for addressing the youth unemployment challenge.

The College has enrolled 400 students this year after conducting a two-month assessment of the current labour demand in programs that include woodwork, textile and leather production, electric maintenance and ICT. Zelalem Alemu, the dean, finds stagnant wages to be a barrier limiting how far their graduates advance in career paths based on the assessment of their post-graduate students.

“Many are trying to become self-employed,” Zelalem told Fortune.

Ministry of Education has embarked on a regulatory overhaul of industry-university linkages, offering curriculum and program revisions with hopes of meeting the labour demand. Tesfaye Negewo, head of curriculum & program desk at the Ministry, acknowledges the population growth and the need for improved skills training. He believes the increased focus on practical experience will address the lack of hands-on skills that has plagued graduates in the past.

Institutions like the Addis Abeba Science & Technology University (AASTU), have been ahead of the curve in attempting to bridge the skills gap. Musin Qelil, academic director of AASTU, points to their program that integrates industry professionals into the teaching process. He said industry partners might co-teach specific courses, mentor students on real-world projects, or participate in curriculum development to ensure its relevance to current job requirements.

“We’ve incorporated these changes based on industry feedback and graduate outcomes,” he told Fortune.

Labour market researchers point to a deeper structural economic problem underlying the nationwide skills gap. Jemal Mohammed, an education labour market researcher, argues that heavy reliance on imports contributes to the underdevelopment of innovative and real-world skills. He acknowledges that some imports might be due to factors like global competition and comparative advantage but an overdependence stifles domestic innovation and limits the types of jobs available.

“We are paying for foreign labour through our imports,” he said.

He believes many businesses, lacking a competitive edge due to a saturated import market, require employees only for basic tasks.

Jemal recommends industry-specific investments in education. He recalled China’s experience, which set its sights on a manufacturing-led economy that ignited massive investments in cultivating a capable, skilled labour force. By aligning educational programs with the needs of growing domestic industries, he believes Ethiopia can equip its graduates with the relevant skills and nurture a more competitive workforce.

Soaring Debt Breeds Sour Solutions

Posted on by Kirabon

Ethiopia’s domestic debt has surged past the 1.2 trillion Br mark, triggering a contentious debate in the federal legislative house. During his nine-month report to Parliament last week, Finance Minister Ahmed Shide faced intense scrutiny from the Standing Committee for Planning, Budget & Finance, which called for attentive management of the mounting debt. Recent data covering a period from 2019/20 to the end of 2022/23 revealed a cautious yet unsurprising uptick in both external and domestic borrowing.

However, the federal government has curtailed direct borrowing from the National Bank of Ethiopia (NBE), seeking alternative financing methods to cover its budget deficit during times of austerity measures and face loan payment defaults to external creditors.

Ethiopia’s public sector debt (including its external obligation) crept up slightly in the six months to December 31, reaching 64.3 billion dollars, a moderate 1.63pc increase. The rise represents 39.4pc of the country’s nominal Gross Domestic Product (GDP), an essential indicator of the fiscal pressures it faces as the administration of Prime Minister Abiy Ahmed (PhD) struggles to manage a growing debt load.

“The economy is wrestling with the challenges of managing borrowing while maintaining growth momentum,” said a macroeconomist, speaking anonymously.

External debt increased modestly by 1.02pc, while domestic debt rose more pronouncedly by 2.12pc. Despite the escalation, Ethiopia’s debt metrics remain within sustainable boundaries as defined for low-income countries. External debt comprises 17.5pc of GDP, comfortably below the cautionary threshold of 40pc.

An internal document from the Ministry of Finance attributed the debt’s sustainability to the government’s “careful debt management strategy,” which it argued is supported by consistent economic expansion. The annual growth rate in GDP was 6.2pc last year, a percentage point lower than government authorities claimed. However, the rate of the economy’s expansion has continuously declined since the 2010s when the GDP was growing by double digits, fueled by massive public infrastructure investments mainly financed by external loans from China and multilateral financial institutions, ballooning public debt.

“The government’s debt strategy aligns with broader economic reforms under the Homegrown Economic Reform Program, aiming to enhance macroeconomic stability and encourage private sector involvement,” says the internal document.

Much of the funds procured through public debt has been allocated to infrastructure, energy, and transport sectors.

The composition of the public sector debt includes commitments by the federal government and those guaranteed for state-owned enterprises (SOEs), as well as non-guaranteed debts of public enterprises such as Ethiopian Airlines. A substantial proportion of the public debt is external loans, with major creditors including the World Bank’s International Development Association (IDA).

In 2021, the federal government established the Ethiopian Investment Holding (EIH), a sovereign wealth fund incorporated to manage state assets and generate revenue independently of traditional fiscal mechanisms. The move, along with the establishment of a Capital Market by mid-2021, marked a shift towards diversifying funding sources and reducing reliance on external debt. The federal government has also leveraged innovative financial instruments like Treasury Bills, which have seen an increase in yield, reflecting a rising cost of government borrowing.

“While this strategy expands the domestic debt portfolio, it also attempted to fulfil the dual purpose of financing government projects and cultivating a local investor base,” said a macroeconomist.

The Ministry’s report attributed this shift to the Development Bank of Ethiopia (NBE) converting much of its debts to Treasury bills and bonds. Despite making 65 billion Br in payments to service domestic debts, this represented only 40pc of the nine-month target. It has sold 88 billion Br in treasury bills and bonds to cover its 139 billion Br budget deficit.

The Finance Minister attributed the growing reliance on Treasury bills and bonds, which have become mandatory for most commercial banks, to being a preferred choice for financing public debt. Despite these measures, debt servicing costs have reached 40.72 billion Br, with 65pc of this paid, reflecting a rising debt stock to GDP ratio of 40.2pc.

“Our biggest risk is high debt servicing compared to our exports,” Ahmed told Parliament, stating the disproportionate burden on the economy.

He hopes that potential debt restructuring under the G-20 common framework mechanism could reduce these high servicing costs and bring debt distress to moderate levels within six years. A critical component of this strategy includes economic reforms, such as a medium-term tax strategy developed with the help of international financial institutions. The debt restructuring deal hinges on adopting an economic reform package prescribed by the International Monetary Fund (IMF), which includes fiscal consolidation, recalibrated balance of payments, tax reform, and addressing disparities between official and parallel foreign exchange rates.

Ahmed praised the interim debt suspension agreement of 1.44 billion dollars from China and ongoing negotiations for nearly half a billion dollars more as noteworthy achievements in managing the external debt burden, which stands at 28 billion dollars.

“The interim relief was a major milestone for our forex management,” he said.

However, the negotiated debt service suspensions under the G20 Debt Service Suspension Initiative (DSSI), which provided essential fiscal breathing room, ended last year. New rounds of negotiations with private, bilateral, and multilateral creditors are ongoing, the latest being held in Washington, D.C., in April with the IMF. Neither side has reported a deal, though.

According to Julie Kozack, the IMF’s communications director, a final deal has yet to be reported despite signals of “progress” in negotiations.

The federal government’s direct borrowing from the central bank has reduced by 90 billion Br from last year to 57 billion Br. The Finance Minister disclosed a shift towards sustainable debt management, pointing to a 200 million dollars reduction from the 8.6 billion dollars owed by state-owned enterprises to external creditors.

Nonetheless, such a shift in policy gear did little to comfort legislators such as Desalegn Wedajo, chairperson of the Standing Committee. He was concerned with the long-term feasibility of shifting to domestic borrowing as a sustainable strategy to address the budget deficit, hitting a record high of four percent of the GDP.

“This could entail risks soon,” Desalegn warned.

Economists like Atlaw Alemu (PhD) stressed balancing aspirations for tight budgetary control with expenditure prioritisation. He warned against cutting essential public services like education and health while allocating funds to unproductive sectors, particularly under an austere monetary policy.

“Budget deficit financing should not cost the economy’s long-term productivity,” Atlaw told Fortune.

The central bank’s December quarterly report revealed a 26.6pc expansion in broad money supply due to an equivalent increase in domestic credit, offsetting a 43.3pc contraction in external net assets. The Minister acknowledged the need to improve dividend collection from state-owned enterprises (SOEs), as only 27pc of the 2.3 billion Br target was met. The Liability & Asset Management Corporation (LAMC), incorporated to absorb the financial burdens of highly indebted SOEs, has struggled to secure adequate financing.

Finance Minister Ahmed pledged to legislators that no lines of credit would be extended from the state-owned Commercial Bank of Ethiopia (CBE), where he sits as a board chairperson, to SOEs without demonstrable proof of viability in new projects.

Habtamu Hailemichael is a director general of the Public Enterprises Holding & Administration (PEHA), a federal agency overseeing nine SOEs expected to make five billion Birr in dividend payments last year. According to him, funds were held up due to administrative expenses and investment, not an inability to pay. Enterprises like the DBE have restructured their management to reduce high levels of non-performing loans (NPLs) and manage fresh disbursements more effectively.

“Some did not have adequate liquidity,” said Habtamu, referring to the Industrial Park Development Corporation (IPDC).

The remaining 27 SOEs, including Ethio telecom, under the EIH, are expected to partially privatise, floating 10pc of their ownership stake to the public.

The Finance Ministry has finalised budget ceilings for 167 federal ministries, marked by tight allocations to reduce inflation to single digits within two years. These measures include austerity steps like halting new large projects, reducing subsidies, and blocking some payments. State Minister for Finance Eyob Tekalegn (PhD) urged lawmakers to speed up a bill before Parliament to legislate compensation payments for right-of-way claims in development projects.

“We’ve no plans to make all the payments,” Eyob disclosed, addressing controversial right-of-way issues at regional-state levels and advocating for them to self-administer expenses through new legislation.

The Finance Minister urged Parliament that right-of-way compensation laws need revision due to the frequent construction of ‘artificial homes’ in anticipation of federal road projects in regional states.

“We are working to ensure a resilient public finance framework,” he said.

Wondwessen Admase (MP) challenged this, pointing out that communities have been stranded for up to a decade without compensation after being resettled for development projects. Nearly 13 billion Br in compensation claims have accrued under the Ethiopian Roads Administration (ERA), leading to project bottlenecks and delays.

“What will be the fate of these people?” Wondwessen enquired. “It’s not like a new law can be enforced retrospectively.”

Legislators like Debebe Admasu echoed concerns about public expenditure control. He questioned the underfunded food budgets for university students and the unspent 20 billion Br set aside to rehabilitate war-stricken areas for a second year. The Finance Minister acknowledged the need to revise the daily food expenditure estimate for university students, currently at 20 Br, and noted that part of the 20 billion Br budget was spent on the Rehabilitation Commission’s efforts in Disarmament Demobilization Reintegration (DDR).

Ahmed told Parliament of the difficulties in administering humanitarian assistance and post-conflict rehabilitation due to ongoing security issues in parts of the country, which impede projects requiring foreign currency payments.

“Ensuring the rule of law nationwide is crucial to raising government revenue,” he said.

Atlaw cautioned that as long as the economy’s productivity remains constrained, the government will continue to compete for available credit with the private sector or rely on newly printed money, restricting potential tax revenue. By increasing the supply of goods, a productive private sector can address inflationary pressures while boosting disposable income through employment, savings, and investment.

“A credit-starved private sector might worsen the macroeconomic instabilities,” Atlaw warned.

He also noted that if the broad and narrow money supplies continue to grow without an equivalent increase in productivity, efforts to reduce inflationary pressures would make little headway.

Resource mobilisation efforts are ongoing, and the Finance Minister disclosed that the conflicts’ impact in the Tigray, Amhara, Oromia, and Afar regional states is being rigorously assessed.

“There were areas left out from the damage assessment,” Ahmed said.

Land Rush Bidders’ Paradise, a Mirage for the Many

Posted on by Kirabon

The long-awaited land auction in Addis Abeba drew hundreds of developers eager to secure prime plots across the city, marking an event in the capital’s urban development evolution. Over nine days last week, the auction presented a market for developers to bid on 22 plots in the recently demolished Piassa area in the Arada District. A total of 295 bidders vied for these “blank canvas” locations, but 40 bids were disqualified for not meeting the requirements, and two plots were withdrawn due to insufficient interest.

The Addis Abeba City Administration floated these plots, with over 90pc concentrated in four major districts.

Nifas Silk Lafto emerged as the most dominant, accounting for 53pc auctioned plots. Other allocations included Akaki Qaliti with 18pc, Kolfe Qeranyo at 10pc, and Addis Ketema at nine percent. The remaining 10pc of the plots were distributed among districts such as Qirkos and Arada. The plot areas varied significantly, with Nifas Silk Lafto offering between 373Sqm and 14,081Sqm.

The auction coincided with the City Administration’s ambitious 48Km corridor development project, which expects to create new plots from recently cleared areas and further reshape the city. The initiative has generated considerable buzz, particularly in zones designated for new projects, including areas near the newly inaugurated Adwa ZeroKM Museum, Doro Maneqia, Mohammud Muziqa Bet, Eri Bekentu, and Qey Bahir Condominium.

According to an analysis conducted by the Urban Centre, an initiative of Yema Architecture, a consulting firm based in Addis Ababa, the auctions’ financial impact is expected to be profound. Incorporated in 2007, YEMA initiated its Urban Centre project as an offshoot of a popular radio show, “Kebet Eske Ketema,” hosted by Mahider G. Medhin.

The relationship between lease income, bidders’ capital, and plot area range vividly depicts the auction’s revenue potential. A pronounced spike in lease income correlates with higher land grade values. The city administration’s decision to require bidders to provide 40pc of their bid as an initial deposit, with the remaining balance payable over five years, marks a shift from previous practices. The city authorities hope to streamline payments and enhance liquidity, moving away from the former 20-year payment period with extensions.

The city administration projects a substantial lease income of 140.4 billion Br over five years, with an initial revenue of 56.2 billion Br, constituting 40pc.

The geographical distribution of the plots shows a focus on neighbourhoods with substantial growth potential. Nifas Silk Lafto, with the highest plot allocation, stands out as a critical zone for future urban development, bolstered by its high land value and extensive plot areas. In contrast, areas like Gulele and Qirkos, with lower benchmark prices and fewer plots, might experience a slower growth trajectory.

Although individual bidders participated in last week’s auction, established companies emerged as the dominant force to reckon with. Banks, insurance firms, and real estate giants fiercely competed for the most coveted plots. In one particular area near Shewa Hotel, adjacent to Teklehaimanot General Hospital, a record-breaking offer of 350,000 Br for a square metre was offered. Awash Bank secured a 977Sqm plot with an upfront payment of 311,000 Br for a square metre for a 60-year lease, outbidding an individual bidder, Habib Yusuf.

Tilahun Geleta, senior finance and facility manager at Awash Bank, expressed delight over securing the plot.

“We’ve already included it in our budget,” he told Fortune.

The Bank plans to move its branch to the new five-story location a few hundred meters away.

The auction leveraged technology to facilitate the bidding process, making 4,200 documents for 242 plots available online and using Tele Birr, a mobile payment platform, to reduce crowds at the Land Development Bureau on Equatorial Guinea St., near the Lem Hotel area.

Ethio Reinsurance (EthioRe), the country’s pioneer reinsurance firm, secured a 1,585Sqm plot near Qey Bahir Condominium with an offer of 102,213 Br for a square metre and a pledge to pay the total amount upfront. EthioRe outbid Samson Properties Plc for a square metre plot by 2,113 Br. Fikru Tsegaye, business and strategic planning executive at EthioRe, revealed plans to build EthioRe’s headquarters on the site, incorporating a training centre for reinsurance companies.

“We’re thrilled to be close to the capital’s grand projects,” Fikru told Fortune.

City regulations for Arada District plots mandate a mixed-use structure with a maximum elevation of five stories.

Chale Abraham, head of land transfers at the Bureau, attributed the lower bids in some areas to the height limitations. He assured that new tenders for the withdrawn plots would be announced soon, following a digital format.

“Bidders are always calculating potential returns,” said Chale.

Despite the high offers this year, they fell short of last year’s record. In 2023, a plot in Qirqos District’s Sar Bet area reached a staggering 695,000 Br for a square metre. This year, the highest bid was less pronounced, with an individual bidder, Kokeb Teklay, securing a 2,064Sqm plot in the Doro Maneqia area at 70,900 Br for a square metre.

A shadow of accessibility hangs over these developments. A 13-year law governing leased land grants appropriations to specific entities like religious institutions and public offices. All other transfers must go through lease auctions, which can be out of reach for many ordinary citizens.

Researchers like Eyouel Tamrat (PhD) share this concern.

Eyouel argued that city administrations rely heavily on land lease revenues, leaving low—and middle-income families with limited investment options.

“There must be some way to accommodate the majority,” Eyouel told Fortune.

He finds the increased emphasis on upfront payments in recent auctions as a positive development for competition. Previously, acquired properties often faced extended development cycles. However, Eyouel believes the relevant question is not how high the auction prices climb, but how much the resulting development benefits the city’s infrastructure needs.

“Ensuring everyone in the city benefits from these high land auction proceedings is crucial,” he said.

Several high offers came from individuals this year, including Mohammed Bedru’s winning bid for 1,400Sqm plot at 213,000 Br with a 40pc advance payment, and Afnan Muktar’s winning bid of 266,000 Br for 951 square metres.

A few real estate companies have also secured plots. Two Centre Real Estate made a winning offer of 264,000 Br for a square metre for a 1,384Sqm plot, while Al-Hiwan Real Estate won with a pledge to pay the total amount in advance for a 907Sqm plot at 121,513 Br. Another plot in Woreda 5, around the Doro Maneqia area, received only three bids. The reputed real estate developer, Varnero Construction Plc, secured a 1,293Sqm plot for 119,000 Br, offering to pay 40pc of the nearly 153 million Br in advance.

Quarit Agro-Industry Plc outbid eight others for a 723Sqm plot near where Awash Bank secured its, for 298,511 Br for a square metre, with a pledge to pay 51pc in advance—the 15-year-old food supplements company, based in Bahir Dar Town, Amhara Regional State. Major shareholder Habtamu Tadesse disclosed that the company plans to move the headquarters from the Arat Kilo neighbourhood, which lacks adequate parking, to the new plot while renting out space to other companies.

“We also expect additional income,” Habtamu told Fortune.

Transporters Fume Over Truck Load Limits

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A two-year-old regulation limiting the load capacity of trucks on the road is sparking concerns among freight truck drivers. Set to be enforced in two months by the Ethiopian Roads Administration (ERA), the regulation will levy fines of up to 65,000 Br on owners who exceed weight caps. This move aligns with the Tripartite Transit & Transport Facilitation Program (TTTFP), an agreement among 26 sub-Saharan countries to streamline cross-border travel.

Administration officials met with freight and truck transport owners at their headquarters near Mexico Rd last week to discuss the regulation, which includes strict caps based on the number and location of axles. Sisay Bekele, deputy of Corporate Affairs, expects the new rules to reduce road damage. He said weighbridges will be fortified nationwide to improve control, particularly in high-traffic export-import corridors.

“A kilometre costs millions to build,” he told Fortune.

The regulation has decreased the load capacity on a truck’s three rear axles by two tons while limiting the total weight (including its freight) to 56tns. Four rear-axled vehicles are also banned under the regulation.

Out of the 14 weighbridges in the country, only eight are currently functional, located in Jimma, Sendafa, Awash, Mojo, Sululta, Holeta, Kombolcha, and Semera.

Yared Alemayehu, manager at the Mojo weighbridge, said increased security personnel and advanced technology equipment will be needed to enforce the new regulation properly. He noted that drivers attempt to evade weighbridges, penalising up to 40 trucks some days by using alternative routes without enhanced supervisory capacity.

“The institutions that contract the drivers must be responsible,” Yared told Fortune.

While the Mojo bridge penalises drivers as much as 2,000 Br for exceeding the load capacity limit, the manager hopes that more penalties and subsequent directives will help decrease violations.

“We also need more personnel,” he said.

Transport infrastructure experts like Bekele Teklu (PhD) suggest increasing revenue by imposing tickets or fees before trucks reach weighbridge stations. He said similar laws exist in other countries that help mobilise sufficient funds for the constant maintenance required for busy roads.

“All roads require rehabilitation,” Bekele told Fortune.

With two decades of experience, Bekele identifies the low revenue mobilisation capacity of road management officials as part of the problem limiting the lifespan of roads in the country.

“More weighbridge stations should be built,” he said.

However, officials have a different concern.

Yoseph Tamru, head of Road Network Asset System Management at Administration, said the main goal is to increase the lifespan of roads, which have been built with public finance. He believes that most drivers know the damage they cause to the roads before beginning their journeys.

“That is why they try to avoid weighbridges,” Yoseph told Fortune.

He does not believe limiting carrying capacity will increase costs, as most vehicle owners do not want additional risks to their cars, which would entail extra costs on spare parts. Yoseph said they can improve haul management through better efficiency while also decreasing potential road damage.

A similar sentiment is echoed by Kassahun Bejiga, head of the Road Fund Directorate. He expects additional revenue from penalties to fund road maintenance, as heavy trucks cause most road damage despite generating low revenue.

“We have to expand revenue generation mechanisms,” Kassahun told Fortune.

The Directorate collects transit fee charges of 15 dollars for a vehicle and receives a portion of annual renewals and a cut from the Value Added Tax on fuel sales. Last year, this amounted to 7.2 billion Br, nearly 93pc of which was used for road maintenance. He emphasised that ensuring road infrastructure can last up to 15 years requires constant maintenance, especially on roads with high vehicle traffic.

“It is far from enough,” said Kassahun.

Industry players expect a rise in overhead costs as the restrictions on truckload capacity limit revenues for transporters, who are already dealing with price hikes due to rising fuel costs and inflated spare parts. Dejene Luche, communication director of the Ethiopian Transport Employers Association, said the fees are exaggerated. He believes the implementation is rushed and lacks proper consultation with transporters.

“What will happen to vehicles which can carry higher loads?” he questioned.

Freight truck drivers are anxious over potential implementation gaps.

Tewodros Yohannes, deputy chairman at Ethio Mieraf Cross-border Freight Transport S.C., expects the new regulation to increase room for corruption rather than decrease road damage. He said insufficient dialogue between transporters and authorities could lead to implementation problems.

“The law is not the problem, but the enforcement,” Tewodros told Fortune.

He pointed out that the 300 freight trucks within their company can load up to 400Qtl, which will be reduced to 360Qtl under the new rules. Tewodros foresees an increase in demurrage costs for the government and importers as the amount each truck can bring into the country decreases. He recalled instances where their trucks carried 450Qtl of fertiliser during high-demand seasons, illustrating the complexity of outright capping load capacity.

“It has multiplier effects,” he said.

Tigray Authorities Thwart Fake Fertiliser Distribution

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A disturbing discovery of counterfeit fertiliser that infiltrated Tigray Regional State earlier this year was unveiled by the region’s Agriculture Bureau during an inter-regional performance report last week. Eyasu Abraha, head of the Bureau and former Minister of Agriculture, reported finding four trucks carrying blue and white plastic disguised as urea in the region. This revelation came as a surprise to the Ministry of Agriculture authorities, who had not been previously informed.

The discovery is particularly concerning as Tigray wrestles with recovery from the two-year conflict followed by a devastating drought. Last year’s drought destroyed nearly two-thirds of the region’s 15 million quintal production. The presentation, held at the Hilton Addis on Menelik Avenue, marked the first time in four years that the region presented its progress to federal authorities. It was attended by senior officials, including Minister Girma Amente (PhD).

Eyasu expressed strong disapproval that individuals or businesses outside a cooperative union should be involved in the sale or distribution of fertiliser. He condemned the practice of introducing plastic, which takes 30 years to biodegrade, into the illegal market.

“These are not businessmen,” Eyasu told Fortune.

He noted that fortunately, all the trucks carrying counterfeit fertiliser were apprehended. He said a massive awareness campaign has been launched to ensure that farmers do not engage with any businessmen who claim to have access.

“We’re hopeful this year,” he said.

Experts from the Bureau recall the efforts to seize the fake urea.

According to Tadesse Gebre, an expert at the Bureau, farmers were desperate in July and August, and contacted vendors who claimed to have fertiliser shipments from the nearby Afar Regional State. He said a coordinated effort, following tips from anonymous sources, led to the capture of three individuals; assessments by experts confirmed that the shipments, made in two rounds, contained inputs used for plastic and tyre manufacturing.

“We stopped it before it reached the farmers,” Tadesse told Fortune.

Tadesse said that about 600,000qtls of fertiliser have already been delivered in the region.

“Shipments are significantly better for now,” he said.

While the report marks the first encounter in Ethiopia, neighbouring Kenya has faced a massive scandal involving government-distributed stocks of fake fertilisers. The local media confirmed that fake subsidised fertiliser known as GPC Plus Organics — packaged in 25Kg bags — was circulating the market last month.

Federal authorities were surprised by the findings.

“This is the first I hear of this [plastic urea],” said Sofia Kassa, state minister for Agriculture.

She said several individuals had been charged with illegally possessing fertiliser outside the cooperatives, while the Ministry had received no reports of fake ones. Sofia disclosed ongoing efforts to control illegal fertiliser merchants, which will soon entail digital product tracking.

Illegal fertiliser trade has become a growing problem in the agriculture supply chain. Two weeks ago, nearly 250Qtl of illegal fertiliser was seized and hidden among piles of sugar. It was also indicated as a major concern when Usman Surur, head of the Central Ethiopia Agriculture Bureau, presented his report.

However, Tigray’s agriculture woes are multiplefold. Nearly 10 veterinary diseases exist amid a shortage of vaccines and medicine while several staff members have not been paid their salaries for 17 months. Meanwhile, the red-billed quelea, a bird that rapidly destroys crops, has reappeared after several decades. It has damaged around 114.5hct of land sown in improved seeds.

Despite these hurdles, Tigray plans to produce 24 million quintals this year. Eyasu remains optimistic as the regional state has begun implementing modern water collection in areas that receive rainfall.

“We’ll meet our targets,” he told Fortune, “with the help of God.”

The detrimental to soil health, cannot be overstated by experts. According to Akalu Teshome (PhD), an agricultural economist, the physical structure, chemical balance, and biological activity of soil will be compromised with plastic. He said it will ultimately reduce soil fertility and crop productivity.

“Neither water nor air can flow through the soil sufficiently,” he told Fortune.

Nib Insurance Breaks Billion Barriers Among Industry Titans, Despite Turbulence

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Nib Insurance has carved out a space between industry giants and new entrants in the competitive insurance market. The past year marked a major chapter in its 22-year history as the company surpassed the billion-Birr mark in Gross Written Premiums (GWP).

The London-based financial analyst Abdulmenan Mohammed (PhD) praised Nib’s management for this rebound, noting that the 55.8pc increase in gross premium to 1.1 billion Br, along with gains in investment and commission revenues, boosted the insurer’s overall standing.

“It’s quite impressive,” Abdulmenan remarked.

Zufan Abebe, CEO of Nib Insurance, concure. According to her, the firm’s performance across key metrics has improved immensely due to well-executed strategies.

Nib Insurance’s gross written premium exceeded the private insurance industry average of 903.2 million Br but was lower than United’s 1.51 billion Br. It also far outpaced Global’s 290 million Br and Lion Insurance’s 827 million Br. The firm ceded 343.53 million Br to reinsurers, increasing its retention rate by 4.5pc to 68.9pc. Commission from reinsurers surged by 39.4pc to 106.76 million Br, while claims paid out rose by 56.2pc to 58.21 million Br.

Net profits soared by 58.8pc, reaching 245.82 million Br, placing it in a strong position relative to its competitors. Nib Insurance’s profits were nearly four times those of Global Insurance, which posted 67.1 million Br, and Lion Insurance’s 70 million Br. However, it still fell behind United Insurance, which reported 327.02 million Br. Earnings per Share (EPS) rose from 123 Br to 167 Br, placing EPS at 33.4pc, marginally below the industry average of 34.2pc.

Nevertheless, it surpassed Lion Insurance’s 7.8pc and outperformed peers like Global Insurance, which had an EPS of 30pc, though it lagged behind United Insurance’s 47.9pc.

During an annual meeting at Sheraton Addis in February, Board Chairperson Siraj Abdella praised these achievements to the shareholders.

“The achievements could not have happened without your continued support,” he told the shareholders.

He particularly cited the restart of the headquarters construction project in Bole District, on a 1,453Sqm plot, which had been delayed due to prolonged negotiations with China Communications Constructions Company (CCCC).

A shareholder, Tamene Lema bought 600,000 Br in Nib’s shares 15 years ago.

“Every performance aspect was better this year,” he told Fortune.

Although pleased with the increased operational performance and EPS, Tamene voiced concerns about the delayed headquarters building, whose costs have escalated over the years with the contractor demands.

Incorporated with equity raised from 658 founding shareholders over two decades ago, Nib Insurance has doubled its shareholder base to 1,207. Many were pleased to see the firm’s paid-up capital increase by 16.8pc to 735.44 million Br, although it falls short of United’s 840 million Br and is more than three times the capital of Global (242 million Br) and Lion (244 million Br). Nib’s position is further solidified by capital and non-distributable reserves, which account for 30.2pc of its assets.

“Nib has a strong capital that should be used to expand its business,” said Abdulmenan.

The shareholders were asked to surrender nearly half of their retained earnings to cover the increased costs. The ongoing construction, with nine floors completed out of the planned 18, has cost 150 million Br for structural work so far.

“Who is going to bear this for us?” Tamene contested.

Zufan attributed the decision to retain half of the net profit for share recapitalisation to a general assembly resolution.

“It’s not a gift they bestowed,” she told Fortune. “We didn’t want to take a loan.”

With an economics degree from Addis Abeba University and currently pursuing an executive MBA, Zufan has over 25 years of experience in the insurance industry. She began her career as a trainee underwriter at United Insurance, eventually rising to Deputy CEO. She then held various leadership positions at Nib Insurance and became CEO eight years ago.

Under her watch, Nib Insurance also registered increased claims. During the financial year of 2022/23, it rose by 23.2pc to around 315.1 million Br. Despite this increase, claims were short of 26 million Br by the private insurance industry’s average. They were also lower than United’s 463.54 million Br, but nearly three times higher than Global’s 109 million Br and Lion’s 297.9 million Br.

“Increased claims must have accompanied the increase in retention rate,” Abdulmenan noted.

According to Zufan, the increase in claims is likely connected to the higher premiums collected to cover risk in an inflationary environment. She disclosed that motor vehicle claims comprise most of the total claims paid out.

Branch managers at premium locations in the capital have observed a decline in policyholders’ willingness to buy new insurance products due to high inflation.

Kaleb Grima, who manages the Meganagna Branch, noted a decline in demand for marine insurance policies as the forex crunch tightened its grip on businesses. Kaleb’s branch, one of the 52, has focused on corporate clientele, including 3F Furniture, Noah Real Estate, and Great Abyssinia, to address a potential dip in collected premiums.

“Corporate clients were crucial to our premiums,” Kaleb said.

Nib Insurance’s investment activities also showed a marked increase, with dividends, interest, and other operational revenues rising by 19.9pc to around 155.8 million Br. Close to 161.16 million Br of these assets were held in investment properties, while 24.3 million Br was in bonds from the Development Bank of Ethiopia (DBE), with close to 373.43 million Br in equities and about 627.35 million Br in fixed-time deposits. Investment activities accounted for 41.8pc of the total assets, a slight increase from the previous year’s 39.4pc.

Abdulmenan observed the surge as crucial to improving the firm’s performance this year, noting that business expansion also led to higher expenses.

Nib’s total employee benefits for 420 staff and operating expenses spiked by 24.7pc to 216.78 million Br during the financial year. It is higher than Lion’s 173.9 million Br and Global’s 184.26 million Br, but markedly lower than United’s 299.81 million Br. Total assets also expanded by 27.4pc to 2.84 billion Br, placing it behind United’s 3.29 billion Br, more than three times Global’s 821 million Br, and moderately higher than Lion’s 2.07 billion Br.

Zufan acknowledged the rise in expenses but believes that marketing efforts will eventually boost revenue growth.

Liquidity analysis showed that Nib Insurance’s cash and cash equivalents increased significantly, with cash and bank balances growing by 88.2pc to 304.4 million Br. The insurer’s cash and balances to total assets ratio also rose from 7.25pc to 10.7pc.

SLIDING ROOFS

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A makeshift cafe around Senga Tera caters to the coffee needs of the residents from a nearby building. The tilted corrugated roof masks cosy accommodations. Addis Abeba is home to a vibrant informal economy providing hundreds of thousands with daily income and employment. According to a recent study by the African Cities Research Consortium, the capital generates 29pc of Ethiopia’s urban GDP and 20pc of national urban employment. Since the early 2000s, the government adopted a two-pronged approach towards informality marked by mandatory business registration and reorganization of micro and small enterprises.

 

PAMPERED SIDEWALKS

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Sidewalk turfs around the Flamingo area are getting nursed as the corridor project edges closer to completion. The City Administration’s massive undertaking includes new 100Km of bicycle lanes, 96Km of pedestrian sidewalks, around 120 public toilets, 400 building renovations and nearly 70 public parks. Prime Minister Abiy Ahmed (PhD) closely supervises the project to alter the capital’s aesthetics into a more resident-friendly ‘smart city’. He has repeated on several occasions the importance of ergonomics in a global economic climate marked by a shift towards information technology and tourism sectors.

PASTEL PLUMES

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The iconic 70 Dereja stairs around Ras Mekonen Bridge are undergoing thorough renovations along with the neighbourhood—a structure built by Armenian architects during Emperor Menelik’s reign. Ras Mekonen, then governor of Harar, commissioned the construction of the eponymous landmark that has survived a century. As the City Administration ramps up efforts to finish the ambitious corridor project before winter rains, a new aesthetic has started to bloom, marked by a polished, sleek—cosmopolitan veneer.