A newly drafted proclamation from the Ministry of Trade & Regional Integration (MoTRI) threatens to clamp down on contraband fuel sales and tighten regulation through digital payment mandates. However, many argue that these measures, although necessary for oversight, fail to address the immediate crisis in underserved areas. New distributors would have to meet strict requirements, such as owning at least half a million litres of storage depots. Yet, the guideline, combined with Enterprise’s recent freeze, could derail projects poised to alleviate fuel shortages. The fuel market currently provides 1.5 million registered vehicles with an average daily supply of 11.5 million litres of petrol and diesel. Yet, the Petroleum & Energy Authority’s research shows at least 500 districts lack a single station.
Month: December 2024
State Enterprises from Oracles to Apprentices
Charged with transforming colossal state-owned enterprises into modern and competitive powerhouses, the sovereign wealth manager, Ethiopian Investment Holdings (EIH), is at a defining moment. At the helm is Brook Taye (PhD), its third CEO since its founding in 2020, whose vision departs from conventional public-sector oversight. He characterises EIH not as a regulator but as an active owner prepared to intervene, invest, and usher in fresh governance standards, offering the vitality of a private enterprise backed by public interest.
EIH’s approach stands out for its insistence on robust corporate oversight. Brook pledges transparent financial reporting and boards staffed with professionals of international calibre, appearing to domestic and foreign investors. He acknowledged that politics inevitably creeps into decisions; yet, by drafting clear policies on public service obligations and urging ministries to provide extra funding for non-commercial mandates, EIH hopes to shield enterprises from the crippling effects of political meddling.
Brook speaks candidly about learning from past failures, and ensuring leadership teams embrace innovation. The message is one of pragmatic adaptation. He believes EIH can build global competitiveness and boost public coffers, all while avoiding the bureaucratic inertia that has dogged state-owned enterprises for decades. In an exclusive interview with our outgoing Editor-in-Chief, TIZITA SHEWAFERAW, he shared insights into EIH’s priorities, the fine line of balancing control with management autonomy, and the strategies behind Ethiopia’s push for IPOs and foreign investments.
FORTUNE: State-owned enterprises under Ethiopian Investment Holdings (EIH) have a history of underperformance. What reforms are you implementing to turn them around, and how can you guarantee these changes will lead to long-term sustainability rather than temporary fixes?
Brook Taye: The right way to put it would be, “used to be known for underperformance.” Their performance in the past five years is phenomenal. The credit goes to the management of most SOEs. With one brilliant CEO, Ethio telecom has transformed into the continent’s second-largest telecom operator. It pays a substantial dividend and tax, and makes us a recipient of services of superior quality and value.
This is promising. I am not saying all of it is being resolved or these companies are where we want them to be. We still have a lot to do. But except for one company, all of our companies are profitable. Every SOE class under our management, except for two companies, has their externally audited financials for the year 2022/23. This is unheard of. Some of them used to have a backlog of five and six years.
Others, such as the Federal Housing Corporation and Ethiopian Toll Road Enterprise, have also made strides, achieving clean, externally audited financial reports for the first time in years. These are companies that did not even know how many houses they had. Now, Federal Housing not only knows how many houses it has but is investing, building, and its finances are clean. We need to capitalise on this and provide all our SOEs with a guideline for our new five-year strategy.
Q: With a few years on its belt and limited experience, are EIH’s capabilities overstretched at the risk of mismanagement?
Brook: We need to unpack this suggestion. We are a new institution, and although it can be a disadvantage, it also provides a fresh perspective. Rather than supervising state-owned enterprises (SOEs), we see ourselves as owners who actively make decisions and intervene when necessary. This new mindset, coupled with our leadership team’s extensive experience in private and public sectors, brings dynamism that was missing in traditional public bodies. Our people understand corporate practices that drive better outcomes and push for efficiency, transparency, and accountability.
Of course, managing a vast and diverse portfolio of massive enterprises comes with inherent risks. The antidote is corporate governance that prioritises transparency, autonomy, and accountability. We assemble independent boards and demand open financial reporting to EIH and the public. We mitigate the danger of mismanagement and demonstrate our commitment to professionalism by setting these safeguards.
Q: With such a vast portfolio, how do you justify prioritising investments? Are there sectors you are deliberately avoiding?
Brook: We do not have the luxury of picking and choosing investments. Everything is a priority in theory at this point. Ethiopia is a growing economy with huge demand, so we need to invest across a wide range of sectors, including bakeries and other essential industries. However, we are very deliberate in our approach.
We focus on areas where private sector participation is limited or where there is some market failure and a broader definition of a market failure. For example, we do not establish new banks, as the private sector is already well-represented with over 30 banks, and we have the Commercial Bank of Ethiopia (CBE). Instead, we focus on strengthening existing state enterprises. We also prioritise investments with regional implications, quick returns, and substantive return on investment (ROI) while avoiding investments that could cause socio-economic harm. We are very conscious as a result of that.
Q: How do you define its success?
Brook: EIH’s success will be defined in the future. So far, we think we are doing good. We have set a five-year strategic plan, and our definition of success involves ensuring that the state-owned enterprises learn from the successes of Ethio telecom and Ethiopian Airlines and contribute their part to the economy. We measure our performance annually based on several key financial and performance indicators (KPIs), the number of investments closed in a given year, and their role in creating new jobs. The amount of new investment we generate, whether through joint ventures or 100pc investments, will also define our success.
Q: Have you found the right balance between centralised control in management and granting autonomy to subsidiaries, or is excessive control stifling innovation and efficiency within the companies?
Brook: The debate on splitting management from control has long been settled in the corporate world. It is a matter of executing it successfully. Owners seek a good return on investment, while managers want to be rewarded for their results. However, this does not mean that they should have complete autonomy.
We encourage state-owned enterprises to have maximum decision-making latitude, with appropriate checks and balances. This is achieved through the board structure. We rely heavily on independent and qualified boards to guide CEOs and management teams in the company’s and EIH’s best interests. As owners, we intervene when necessary, especially when actions could harm our capital or returns. We also learn from other sovereign-owned funds globally to find the right balance and execute it effectively.
Q: How do you insulate the decisions from political interference?
Brook: These are government-owned state enterprises, on behalf of the public. There is always a political component to it. But, this can be defined or construed through a principle of public service obligation. There is no political decision that purposefully aims to damage a state-owned enterprise. What usually used to happen is various ministries or officials would try to utilise the state-owned enterprises to achieve a policy objective that does not necessarily match the commercial purpose.
If a state enterprise like the Ethiopian Electric Utility (EEU) is tasked with rural electrification, it cannot fund this from its own resources. The Ministry of Finance allocates a budget to bridge the gap. The policy objective is essential, but it interferes with the commercial purpose or would force the company to perform below par. We are finalising a public service obligation policy to ensure that public service objectives are met without compromising commercial viability.
Q: The Prime Minister announced plans for more state-owned enterprises to issue IPOs, following Ethio telecom’s lead. Which other state-owned companies do you see taking a cue?
Brook: We have announced companies undergoing IPO readiness, including the Ethiopian Insurance Corporation (EIC), the Shipping Lines, and Berhan Ena Selam Printing Enterprise. However, this does not necessarily mean they will go public immediately. The process takes time as we need to clearly define why we are taking these companies to market. Is it to raise capital for expansion, or is it because the government no longer wishes to remain in that sector and plans to divest through the capital market?
Currently, we have a major IPO in progress. Once it is completed, we will analyse the outcomes — successes, challenges, and areas for improvement — and use those insights to guide the next steps for other companies.
Q: Without aligning these enterprises to international standards, aren’t they set up for failure in the marketplace?
Brook: That is exactly what we are assessing now. Our focus is less on how ready they are and more on understanding how unprepared they might be. These companies are mostly state-owned and have never had the incentive to meet the requirements necessary to operate as public companies. This is understandable, given their history.
Our role is to evaluate their readiness and develop an equity story that aligns with their strengths and market potential. Once that foundation is in place, we help them meet the obligations outlined in the Capital Market Proclamation and the Directive for Public Offer. We have gone through this process with Ethio telecom; we are confident we can replicate it successfully with other companies. Capacity is not an issue; it is a matter of following the process systematically.
Q: Are you in a position to say something about how the Ethio telecom IPO is going?
Brook: The process is very active and ongoing. I hope that people will view this as an exciting opportunity, not only to become part-owners of one of the oldest companies in the country, with a history spanning 130 years. It is also one of the most profitable businesses in Ethiopia, a wonderful opportunity for individuals to hold a stake in a company that makes us proud.
Q: Ethiopia’s capital markets are still in their infancy. Isn’t relying on them to raise funds or divest assets a risky bet that could backfire on EIH and the economy?
Brook: There is always a risk when using market instruments to divest assets, whether through strategic sales, capital markets, or other mechanisms. However, EIH maintains a dynamic approach. We adjust and adapt if a process does not yield the desired results.
The risk is if you are not pragmatic, if you are stubborn and say, “This is the transaction that I have to do; I do not care if I have a collapse.” But we do not have that mindset. It is a very pragmatic administration. We make decisions based on current priorities and implement changes as needed.
Q: Are there plans to attract foreign investors to participate in these IPOs?
Brook: Yes, under the National Bank of Ethiopia’s (NBE) directive, portfolio companies can now invest in Ethiopia with up to a 30pc stake. However, the Capital Market Authority and the National Bank still need to finalise the directive, and we are eagerly awaiting its issuance. Once that happens, I am confident that portfolio investors will be drawn to Ethiopia.
One unique advantage is an asset class, uncorrelated mainly with global macroeconomic turbulence. Unlike many markets where economic shocks in one region ripple across others, Ethiopia’s assets are somewhat insulated. This makes them attractive to portfolio investors seeking diversification, as our market dynamics are not directly tied to those of advanced economies.
Q: Public-private partnerships can be beneficial but also have problems. How will EIH ensure these collaborations genuinely serve the public interest and not enrich vulture capitalists?
Brook: The public interest is defined by ensuring that state-owned enterprises are properly managed and operate profitably. The dividends they pay contribute to the national budget and our investment fund, growing wealth for both current and future generations. Our investment strategy aligns with this goal, incorporating rigorous due diligence, clear commercial terms, and extensive feasibility studies. We are putting public money as part of our equity.
Metrics such as Internal Rate of Return (IRR), payback period, job creation, and foreign exchange generation are integral to decision-making. There is a robust investment framework where decisions are made internally, by our investment committee, and then our board, depending on the volume and scale of the investment. Transparency is another cornerstone of our operations. Whenever we sign an MOU or joint venture, we make it public to invite feedback and ensure accountability.
Q: What are your top priorities for the next five years?
Brook: Our five-year strategy focuses on three core principles: diversification, driving economic growth, and delivering value.
Diversification involves expanding services, products, and geographical reach. Ethiopian Construction Works Corporation is one of the largest construction companies in the continent. Why is it not in 20 or 30 different African countries? Ethiopian Airlines does it. We also want the enterprises to drive the economic growth in our country. Tax contributions, foreign currency generation, and technology adoption support them. Last quarter, we generated over three billion dollars of foreign currency through our state-owned enterprises. We are one of the largest employers in this country.
They also need to deliver to the public, the owner. Increased revenue, higher tax contributions, and dividends are measures and deliveries that should be the core principles we will introduce in the next few years. We are sure that most of our SOEs will make us proud.
Q: What lessons have you learned from the past performances, both the success and failure of the companies?
Brook: We find both how to manage an SOE successfully and how not to manage it in Ethiopia. Ethiopian Airlines is a model of how SOEs should be managed. Its diversification and strong governance are examples of success. Conversely, failures of projects, past misalignments and governance failures offer lessons on what to avoid. We use these insights to recruit capable CEOs, encourage new talent, and design a strategy that builds on strengths while addressing weaknesses.
Q: Does the bureaucratic inertia not prevent you from adapting to shifting consumer behaviours and technological advancements?
Brook: So far, I have not seen any resistance. People are actually anxious and restless. They want to reform. Most of the time, they are spearheading changes in many of our projects. What was missing before was a clear vision and collaborative leadership. We have shifted from “all-knowing” to “all-learning” leadership between management and stakeholders. This approach has created an environment where people are eager to reform and innovate.
Most of the complaints we receive are about the bureaucracy that private sector companies face. Our issue is also based on taxes, customs, and other matters. That is the frustration that they have and not resistance to change.
Q: Markets are increasingly volatile, especially in sectors like energy and logistics. Is the economy vulnerable to potential shocks? Is EIH adequately equipped to manage these risks?
Brook: Absolutely. Our five-year strategy prioritises driving economic change and ensuring efficient service delivery. We want to be part and parcel of the change. From telecom to energy to transportation, agriculture or access to finance, our SOEs are deeply embedded in daily life. This positions SOEs as key players in Ethiopia’s economic transformation. They are ready; we are ready and very confident that they will be at the forefront of any economic change introduced to this country.
Q: Are you pursuing any initiatives or investments to stay ahead in the digital economy?
Brook: Yes, we are exploring investments in the business process outsourcing (BPO) sector to ensure we have investments that allow private sector participants to come and invest. There are also other areas in the process of identifying and developing the investment framework that I will not be able to talk about right now. But, it will focus on technology we think we can align with.
Q: What role do investment holdings play in Ethiopia’s integration into regional and global trade networks?
Brook: Diversification is key. There is no reason why CBE or Ethio telecom should not compete in other African markets. We envision Ethiopian SOEs becoming as prominent internationally as Chinese state-owned enterprises. In the same way, we see the ‘C’ companies from China, and there will be ‘E’ companies in many parts of the continent. We have the capacity and know-how; other companies have done it, and we should be able to learn from them. This strategy motivates our companies to think globally.
Q: What would you advise potential investors?
Brook: We offer de-risking, equity partnership, and a sounding board in investment decisions. But, in general, Ethiopia’s ongoing economic reforms, including opening the banking sector and launching a capital market, present tremendous opportunities. The next couple of years will be interesting. We are ready to partner with investors who identify synergies between our SOEs and strategically approach investment decisions.
Addis Abeba’s Gleaming Facade Masks a Parched Metropolis
The main avenues and thoroughfares of Addis Abeba have undergone an impressive facelift that is a source of marvel to visitors more so than its residents. Adopting a greyish colour — a bizarre choice of its leaders – its roads now have separate lanes for motorists, cyclists, and pedestrians. Its buildings are wired with LED lights, projecting renewal and affluence, giving the appearance that the economy has found a sudden endowment.
Indeed, Addis Abeba contributes 29pc of the country’s GDP and houses more than 60pc of its industries. No one may not have the latest and accurate data on the number of residents, for the national census was last conducted in 2007. The city’s officials use – perhaps for convenience – a little over five million people as operative data, estimating its demographic growth at nearly four percent a year. The city is already struggling to keep pace with demand for infrastructure.
Despite the outward appearance, Addis Abeba could not guarantee reliable supplies of water, electricity, or transport. The most pressing threat comes from the taps, with the city producing about 630,000cbm of water a day, yet needing more than one million. The water crisis is so severe that its future as a functional metropolis could be doubtful. Studies have uncovered that at least 40pc of the population goes underserved, with large swathes of homes and businesses enduring erratic rationing. The wealthier residents drill boreholes or invest in storage tanks.
The source of the chronic shortfall is a combination of factors. Population growth and rural-to-urban migration have expanded the city’s population far beyond what its infrastructure can handle. Geographical constraints add to the difficulty. Addis Abeba sits at the top of the Awash River Basin, with limited surface water and weak natural recharge.
Over 60pc of its water comes from groundwater, already depleted by unregulated extraction. In places like the Akaki wellfield, overexploitation has lowered the water table. The distribution network is leaky and obsolete, losing up to 40pc of the insufficient supply before it reaches consumers. Climate change worsens matters by making rainfall patterns increasingly erratic. Even in 2020, surveys found hours-long interruptions in wet and dry seasons.
For many residents, the consequences are immediate and punishing. Deprived of reliable municipal water, they turn to street vendors, paying up to 100 times the official tariff of 7.25 Br for 1,000 litres. Several homes on the outskirts rely on trucked water that can cost a family as much as 6,000 Br a month, more than twice the median monthly income of 2,640 Br. Such crushing expenses hollow out household budgets.
Businesses, too, struggle. Without reliable supplies, factories shut down intermittently, sapping productivity and eroding the city’s competitiveness. A failure to secure a reliable water source risks a disaster akin to Cape Town’s 2018 “Day Zero” scare. Such a scenario would devastate the city’s economy, public health, and reputation.
It would be unreasonable to blame the city’s officials for neglect. It is evident that they are attempting incremental solutions, increasing dam storage and treatment capacity, drilling deep wells, replacing old pipes, and rehabilitating decrepit reservoirs. Two planned reservoirs, on the Gerbi and Sibilu rivers, may add 688,500cbm a day, but this will likely fall short given rising demand, archaic distribution systems, and relentless urban expansion.
A new property tax proclamation, expected to raise the tax-to-GDP ratio by 0.6pc, promises added income to the city’s coffers. These funds could help finance drinking water infrastructure, as seen with the decision to fund the long-delayed Gerbi dam project from the city’s own budget.
Nonetheless, financial capacity alone will not suffice. The key lies in more efficient management and the adoption of new technologies. Conjunctive water management, balancing surface and groundwater use, could optimise supply and buffer droughts. Managed Aquifer Recharge (MAR) schemes that use seasonal floods to replenish aquifers sound promising but require careful site selection, pollution control, and monitoring. Rainwater harvesting and greywater recycling might diversify sources, though both demand investment in retrofitting buildings and installing new systems.
According to the “Aspire” report, inter-basin transfers, reservoirs like Aleltu, and underground aquifer storage could yield over 1.1 million cubic meters a day. Leveraging the vast hydropower from the GERD to power pumps would reduce reliance on diesel, cutting costs and emissions. Restructuring the utility grid, introducing smart metering, and incorporating private capital could boost efficiency. Private investment might supply much-needed expertise and funds if properly regulated, though it risks prioritising profit over sustainability.
The larger problem lies in the fact that water is only one part of an infrastructure puzzle under strain. The city also suffers from electricity failures that seem absurd for a country renowned for ambitious hydropower projects. It is celebrated for the Grand Ethiopian Renaissance Dam (GERD), intended to supply abundant renewable electricity far beyond its borders. In the capital, however, blackouts are so routine that households and firms rely on diesel generators, raising costs and polluting the air. Even the Addis Abeba Water & Sewerage Authority runs about 100 diesel generators to keep pumps going, a telling manifestation of institutional desperation and wasted potential.
The transport system fares a little better. Two light rail lines, once symbols of modernity, cannot accommodate the growing tide of commuters. Roads are choked, and overreliance on minibuses leaves passengers trapped in traffic for hours. Such gridlock drains productivity and frays nerves, making it harder for Addis Abeba to present itself as a dynamic African metropolis.
Without decisive action, Addis Abeba risks a permanent crisis. A relentless influx of newcomers and expanding industries will intensify demand. Urbanisation, once a driver of prosperity, now threatens to overwhelm the public services that sustain it. If the city does not adjust swiftly, it may become a cautionary tale of urban mismanagement. Time is short, and Addis Abeba does not seem to be able to afford to wait.
Universal Human Rights Should Prevail Over Sovereignty’s Fragile Facade
The United Nations Convention on Refugees clearly excludes individuals who have committed crimes against humanity from the protections generally afforded to refugees. Article 1F of 1951 stands as a moral and legal guardrail, a direct response to the atrocities of the mid-20th Century and a reminder of the pledge engraved in the United Nations Charter 75 years ago. Its architects were determined to spare future generations from the ravages of war.
Yet the recent history of Syria shows how easily this principle can be set aside.
Under Bashar al-Assad’s regime, Syria has been engulfed in a brutal conflict for more than 13 years, with hundreds of thousands of lives lost and millions forced to flee. It has become symbolic of how a state’s leader can preside over systematic human rights violations, including the documented use of chemical weapons, while the international community struggles to hold him to account.
Syrians, fleeing bombardment and repression, have risked dangerous crossings through war-torn territories and across the Mediterranean Sea. In one of the most wrenching instances, a young child named Alan Kurdi, drowned off the coast of Turkey in 2015. His small body washed ashore, a heartbreaking image that riveted global attention to the plight of refugees, a reminder of the world’s failure to confront Assad’s bloody tactics.
Over the last 24 years of Assad’s rule, there were multiple opportunities to steer Syria toward unity and stability. Instead, the regime’s legacy has become a chronicle of forced disappearances, barrel bombs, and the targeting of civilians. Since the conflict began in 2011, these acts have radiated beyond Syria’s borders, destabilising neighbours and contributing to one of the largest refugee crises since World War II.
At camps such as Zaatari in Jordan, Syrians recount stories of terror and loss, describing the permanent rupture of family life and the erosion of any hope that peace and justice might prevail. Countless Syrians have died without ever seeing an end to Assad’s brutality.
Against this backdrop, why should a leader who has presided over war crimes find sanctuary abroad?
There is international precedent for denying refuge to those who commit atrocities. After conflicts in Yugoslavia and Rwanda, key figures were brought before international tribunals. The principle was clear. Those responsible for heinous acts would be held to account. Yet by offering asylum to Assad, Moscow undercuts the Refugee Convention’s very purpose. The Convention’s exclusion clauses ensured that those who commit grievous crimes cannot hide behind the veil of humanitarian protection.
If its provisions can be circumvented this easily, international law’s credibility will suffer, and the moral integrity of global governance will erode.
The failure speaks to a deeper problem of silence and inaction. The promise never to tolerate crimes against humanity is tested when leaders invoke sovereignty as a shield. The idea that a country’s internal affairs are its own business rings hollow when that business includes atrocities against civilians. Assad’s reign showed that unchecked abuses create spillover effects, sowing instability that can spread well beyond a single country’s boundaries.
If human rights are truly universal principles, they should supersede the notion that state sovereignty can excuse cruelty.
Justice is not a quest for revenge. Holding those responsible for war crimes accountable is about ensuring that such horror does not repeat itself. When global norms fail, perpetrators grow bolder, believing their actions will be met with little more than outrage and empty words. It falls to the international community to prevent impunity. To uphold the moral and legal foundations of human rights, the lessons of Syria should be heeded.
Transforming human rights from lofty rhetoric into enforceable standards is urgent, not just to deliver justice for the victims of today’s conflicts, but to deter the autocrats of tomorrow. No leader should be allowed to commit atrocities and then slip quietly into exile, beyond the reach of law and conscience.
The Power of Memes in Shaping Cultural Evolution
A person’s hand is seen throwing pens into an empty wine glass while the Christmas carol “Jingle Bells” plays in the background. The goal is to create a viral video by successfully landing one pen in the glass. After several failed attempts, the person runs out of pens and abruptly tells the friend recording, “Just turn the camera off,” as the screen cuts to static. This type of graphic storytelling, particularly popular on social media, is known as internet memes.
According to Britannica, an internet meme is an amusing or interesting picture, video, or post shared widely online. Social media platforms are flooded with short videos, images, and other content often paired with text or sound to convey messages that quickly go viral. Understanding memes often requires a certain level of internet literacy, which comes more naturally to those born after the internet’s invention. For those of us who first encountered the PC era in the late 1990s, when operating systems like MS-DOS dominated with their dull black screens and blinking white cursors, today’s meme culture can feel unfamiliar. My son, a member of ‘Generation Z’ digital natives who grew up with constant internet access, has no trouble grasping the concept.
More broadly, memes are ideas, behaviors, or styles that spread within a culture. They serve as a way to perpetuate values, mannerisms, and beliefs, forming part of our collective identity. I recall my university days when students from Addis Abeba often struggled to communicate with peers from rural or remote areas. These misunderstandings were rooted in cultural memes i.e., unspoken norms, language, and humor, that didn’t make sense across groups.
In those days, city students often made jokes at the expense of their provincial peers, which, in hindsight, was immature and sometimes hurtful. Over time, as the freshman year passed and students mixed in different fields of study, these cultural clashes faded and were replaced by understanding and mutual respect.
A sentence from one of the short stories in the anthology by my favorite author, Margaret Atwood, titled The Bluebird’s Egg, encapsulates what it means to feel left behind by a cultural phenomenon. In the story, an educated daughter’s worldview after a year in college alarms her mother, who struggles to understand her. The narrator in the story, Significant Moments in the Life of My Mother, reflects, “It struck me, for the first time in my life, that my mother might be afraid of me….I had become a visitant from outer space, a time-traveller come back from the future, bearing news of a great disaster.”
I found myself in a similar position with my son. To him, emails which were once considered revolutionary in our time are outdated relics. Meanwhile, I initially struggled to grasp the concept of memes, which he understood with ease. A New York Times article captures this generational divide, posing a fundamental question: Internet culture is saturated with memes, but how would you explain a meme to someone who does not get it?
My parents’ generation, the ‘Baby Boomers’, are even further removed from the digital language of memes, with rare exceptions.
Some memes are so difficult they feel as if they are written in an alien language. The reality is that while the language might be familiar, the meanings, contexts, and symbols have evolved within specific online communities. Even emojis and smileys, once straightforward forms of expression, have evolved over time to represent varying meanings.
Some memes often require exposure to specific subcultures to fully grasp their meaning. For instance, statements might be clear, but their intended humor or message is lost without context. On the other hand, memes based on parodies of famous events or personalities tend to be easier to understand. I recall one meme that hilariously showed the inconsistency and complexity of English grammar rules through a role-play between a teacher and student.
While memes provide entertainment, they also come with risks, including their addictive nature, the spread of harmful belief systems, and the sheer amount of time they can consume.
I tried to make sense of some of the Amharic memes online, which are growing exponentially every day. I found them relatively easier to understand, likely because they are created by people with similar social backgrounds to mine. These memes often poke fun at shared experiences, societal norms, or even taboo topics in a lighthearted, impersonal, and creative manner.
However, not all memes are harmless. Some memes target specific individuals or groups in ways that may not be healthy. Memes also have the potential to take a dangerous turn, creating alternate realities that can harm individuals and society, whether intentionally or inadvertently. Even in the local context, there have been highly toxic and damaging memes resulting in character assassination, shaming, and misrepresentation of people and groups.
The term meme was first coined by renowned evolutionary biologist Richard Dawkins in his 1976 book The Selfish Gene. Dawkins described memes as units of culture such as tunes, ideas, catchphrases, or clothing fashions that are copied and transmitted across generations. He likened memes to cultural genes, explaining that they replicate from one generation to the next.
The widespread use of memes on the internet brings cultural elements from far corners of the globe directly to our screens. Before we realize it, we are exposed to and exchanging memes, adopting values, and sharing some of our own. I have Facebook friends from many nationalities and cultural backgrounds who frequently share posts and memes. Often, I feel lost trying to grasp the meaning of a meme due to a lack of background knowledge about the subject. Sometimes, understanding a meme simply requires familiarity with the topic it references.
Researchers say that memes are more important than they appear. Beyond providing entertainment and social interaction, memes have far-reaching implications. Popular memes can benefit creators by protecting their intellectual property rights and providing financial rewards.
Moreover, memes foster a sense of belonging among marginalized groups, offering solidarity and creating virtual communities for those who feel excluded by mainstream culture.
Africa’s Quiet Crisis Finds a Champion in Demeke Mekonnen
The launch of the Yadam Foundation last week, an initiative by former Deputy Prime Minister Demeke Mekonnen, should serve as a notable mark to turn in the fight against childhood stunting in Africa. By squarely addressing one of the continent’s most daunting health and development impediments, the effort heralds a fresh level of political will around a problem that has dogged generations.
The Foundation’s focus on stunting, the impairment of growth in children caused by chronic malnutrition, repeated infections, and a lack of adequate stimulation in early life, deserves support. Stunting reduces cognitive and physical capacities, limits educational attainment, and deprives future productivity. It often leads to an elevated risk of chronic diseases in adulthood. Such enduring damage can lock communities into an unyielding cycle of poverty and ill health that holds back the broader economy.
Across Africa, millions of children are affected by stunting, and the continent has some of the highest rates globally. In Ethiopia alone, one-third of children under the age of five are stunted. For these children, the consequences do not end with shorter stature. This has long been clear in policy briefs and health reports, but leadership capable of galvanising large-scale response has been less common.
The arrival of Demeke at the helm of the Yadam Foundation could change this dynamic. His name recognition and influence bring mainstream attention and resources to a problem that, for many, still rests in technical jargon and under-the-radar public health advocacy. He has positioned the Foundation not as a lone actor, but as a partner supporting a suite of established national efforts, including the Sekota Declaration, which aims to end child undernutrition. The food and nutrition strategy, urban agriculture programs, and the Bounty of Basket initiative have allied to stitch these various undertakings into a coherent response that targets to improve nutrition security and health outcomes.
The urgency of dealing with stunting should not be understated.
Experts agree that the critical period for preventing it lies in the first 1,000 days of a child’s life, from conception to age two. This window is narrow but crucial, as it shapes the blueprint for lifelong development. When a child’s growth is stunted in these early stages, the damage to cognitive and physical development is largely irreversible. Addressing stunting during this delicate period can stop lasting harm and dramatically alter life trajectories.
The Yadam Foundation’s approach is based on this principle, ensuring that children receive enough calories and the right mix of nutrients, care, and stimulation to thrive.
Such a broad task demands multiple lines of effort. Direct nutrition interventions are critical, including promoting exclusive breastfeeding for the first six months, improving complementary feeding practices, ensuring micronutrient supplementation, and managing acute malnutrition. But stunting is not simply about a product of too few calories or nutrients. Its underlying causes often involve a wider nexus of factors like poor access to clean water, inadequate sanitation, and poor hygiene.
Food security is tied to agricultural practices and environmental stewardship. Households need stable incomes, and mothers require education and maternal care to ensure they pass on better health prospects to their children. Interventions should extend beyond the clinic to homes, farms, schools, and markets.
The Yadam Foundation’s path forward involves a careful and sustained approach. Attempting to fix everything all at once may dilute efforts and waste resources. Instead, the Foundation will focus on key areas based on urgency, resources, and existing infrastructure. By segmenting populations and regions according to their specific needs, this stepwise strategy could have a better chance of delivering measurable improvements, building community trust, and demonstrating early wins that can attract further support.
However, the approach should remain grounded in each area’s cultural, economic, and social context. That might mean creating community-based platforms that do more than distribute supplements. They might serve as centres for nutrition education, cooking demonstrations, or even forums where families can learn about sanitation and hygiene practices that cut the cycle of infection and malnutrition.
Data and evidence-based decision-making are essential. Without accurate and timely data, even the best-intentioned interventions can miss their mark, funnelling resources into areas where they are less needed or failing to detect regions in crisis. Strong data systems can ensure that disparities are addressed as they emerge, allowing real-time course corrections that large-scale public health initiatives require. Tracking progress will help identify what works and what does not, ensuring that successes can be replicated and failures adjusted swiftly.
Political will and stable governance are also key. The former Deputy Prime Minister’s visible presence and personal commitment have the potential to attract political support, mobilise funding, and keep nutrition high on the public agenda. The Yadam Foundation can be a powerful advocate for aligning policies across different sectors. It can press for investments in agriculture that yield nutrient-rich crops, infrastructure that provides clean water, and programs that educate mothers and caregivers.
No single group can solve stunting alone. It requires a comprehensive, whole-of-government and whole-of-society effort in which international organisations lend expertise and resources, civil society engages communities at the grassroots, and the private sector contributes through product innovation and investment.
For the millions of children who risk falling behind before their lives truly begin, the Yadam Foundation’s establishment is a reminder that this battle need not be fought in the shadows. The immediate goal is to break the chain of stunting, ensuring that the next generation of Africans grows into their full physical and cognitive potential. The broader outcome, if successful, will be a more productive workforce, stronger economies, and families no longer trapped in an intergenerational loop of undernutrition.
This effort may not yield headlines as dramatic as those of wars or natural disasters. Yet, the impact could profoundly affect human capital, economic vitality, and long-term prosperity.
A Pragmatic Path to Global Progress in 2025
As we close out the past year and look ahead to 2025, the holiday season is a time when we reflect on what we have achieved and how we can make next year better, reach our personal goals, give back to our communities, and contribute to the betterment of the world.
When we give, there is no shortage of noble causes, from alleviating poverty and improving education to protecting the environment and advancing healthcare. We should, in theory, all align around shared aspirations to make 2025 a year of progress for all.
But the hard truth is that global cooperation has struggled mightily over the past decade. In 2015, the UN developed a 169-point agenda to fix all humanity’s problems by 2030. The Sustainable Development Goals (SDGs) were agreed upon by all the world’s leaders with the best of intentions. Yet, with five years left, the world is wildly off-track on almost all the promises. The fight against poverty, disease, and hunger has lost momentum.
Why are we not making more headway?
This is largely because we try to do too much. Focusing on everything means we have prioritised nothing and achieved very little. A new year offers a fresh opportunity. Instead of trying to do it all—both as a society and as individuals with our own giving—we should focus first on the interventions that yield the most progress. That means those that provide the highest returns on investment for people, the planet, and future generations.
Here is the catch. The best investments do not necessarily grab headlines or attract celebrity endorsements. I have worked with more than 100 of the world’s top economists and several Nobel Laureates to find which of the many global goals delivers the most return on investment. Across hundreds of pages of peer-reviewed, free analysis, we have identified the 12 smartest things we could do to make life better for the poorer half of the planet. These solutions seldom make headlines, but they are cheap and incredibly powerful.
When a pregnant mother lacks essential nutrients and vitamins, her child’s growth and brain development will be slower. Her children will be condemned to do worse throughout their lives. A mere 2.31 dollars can ensure that an expectant mother receives an essential multivitamin supplement. Her children will grow healthier, smarter, and more productive. Every dollar spent on nutritional supplements for pregnant women can yield up to 38 dollars in economic benefits.
This is not a far-off utopia. It is an actionable and proven solution that could be scaled up immediately.
Another simple but powerful investment is improving learning. In the world’s poorest countries, only one in ten 10-year-olds can read and write. We need to fix this, not only because it is the right thing to do but also to reduce future strife and reliance on aid and ensure countries can write their own success stories. Most schools group kids in classes by age, regardless of their ability. Some students struggle, while others are bored.
The solution should be simple but transformative: Teach children individually at the right level. Obviously, teachers cannot manage this for every child, but technology can. An hour a day spent in front of a tablet with educational software can teach reading, writing, and basic math. Countless studies show that even if the other seven hours of daily schooling remain traditional and ineffective, after one year, the student will have learned as much as normally takes three years.
The costs are modest—sharing a tablet costs about 31 dollars per student per year—but the return on investment is extraordinary. Children who learn more become more productive adults, resulting in a return of 65 dollars for every dollar spent. This is a great long-term investment in a more stable and self-sufficient world.
There is a compelling case to focus on tackling the diseases that have already been wiped out in rich countries, like malaria and tuberculosis, which have become diseases of poverty. The simple act of providing more anti-mosquito bed nets and expanded malaria treatment across Africa would save 200,000 lives every year, with benefits worth 48 dollars for every dollar spent. Healthy and productive individuals are more likely to innovate, work, and contribute to the world, ultimately benefiting everyone.
As we approach the new year, we need to stop chasing grand lists of unachievable goals and focus on what is working. Our resolution should be to direct whatever resources we have — our time, attention, money, or political will — toward the actions that bring about the greatest improvements in people’s lives.
My hope for the world next year is that governments and institutions will finally stop dithering and focus on solutions that deliver the best returns. By concentrating on what works, we could achieve more in one year than we did in a decade of dithering. As individuals, we can do our own small part to make the coming year we resolve to get serious about progress for all.
Overcoming Emotional Impulses in Decision-Making
Have you ever made a split-second decision and later wondered, “What was I thinking?” Perhaps it was a reaction to anger, frustration, excitement, or sadness. We have all been there. The heat of the moment can distort reality, leading to choices we later regret.
Our emotions, though valid and deeply human, are not always the wisest guide for making decisions, especially important ones.
Maybe you quit a job after one frustrating day, ended a relationship during a heated argument, or sent a text you wished you could take back. These are common human experiences. When emotions surge, our judgment clouds, and we often act in ways that feel right in the moment but seem irrational once the dust settles.
I recently spoke to a woman who shared her regret over ending her marriage nearly ten years ago. A few years into their marriage, with two children, her husband drained a big portion of their savings without consulting her. The money was meant to buy a house for their family. His friendship with wealthy individuals had driven him to compete, spending their savings on fleeting luxuries. Some of it also went to cover his father’s medical treatment abroad.
When she discovered this, her emotions, anger, confusion, and hurt, overwhelmed her. In her pain, she walked away from the father of her children. Looking back, she realizes the breakup could have been avoided if she had taken the time to pause before deciding.
Her family and friends didn’t help; they supported her decision instead of encouraging reconciliation. Her husband’s remorse and repeated apologies went unacknowledged. While she later accepted that his decision to help his sick father was well-intentioned, she couldn’t forgive his reckless spending to impress wealthy friends. In her anger, she tarnished his reputation and said things she didn’t mean, actions she now deeply regrets.
By the time her emotions subsided, it was already too late. When she realized that decisions made with patience and consideration would better align with her values, family goals, and the bigger picture, her husband was far gone. He chose to cope with the grief of losing his family through alcohol and drugs.
Although they never divorced, they remained separated. She became a single, sober parent while her husband struggled with addictions that further fractured his relationship with her and their young children. Despite everything, she still loved her husband and believes that many of their issues could have been resolved with patience, communication, and time.
Emotions are a double-edged sword. They are essential in helping us understand what we value, who we love, and when we’re hurt. However, emotions are also temporary. The intensity we feel in the moment can cloud our judgment, making the immediate feeling seem far more important than it truly is.
When decisions are made purely based on emotions, we often react rather than respond. Reacting is impulsive; it happens when we speak without thinking or act without clarity. Responding, on the other hand, is intentional, involving reflection and understanding.
Moreover, emotions like anger, fear, or sadness can distort reality. A disagreement with a spouse or loved one might suddenly feel like the end of the relationship. A mistake at work might feel like the end of a career.
Ignoring long-term consequences, decisions made in an emotional haze often prioritize immediate relief or satisfaction over the bigger picture. While it might feel good in the moment, such actions can damage relationships and tarnish one’s reputation over time.
Take, for example, the young man I saw lashing out in anger at public servants last week. Frustrated by the lack of speedy service, he lost control and began bad-mouthing the employees, alarming everyone else in the queue. Security forces eventually escorted him out. His immediate regret was evident in his face and his apologetic words once he calmed down and regained perspective, allowing clearer thinking to return.
Pausing, though seemingly simple, is transformative. When we pause before speaking or acting, we create space for the initial surge of emotion to subside, allowing logic, wisdom, and intuition to guide our response.
The popular “ten-second rule” is a mindfulness practice designed to encourage thoughtful, intentional communication. It involves pausing for ten seconds before responding in a conversation or reacting emotionally. This brief pause provides time to process thoughts and ensures that the response is both unharmful and relevant.
This habit helps avoid speaking out of anger, frustration, or defensiveness and promotes consideration of the other person’s perspective. It has been proven to improve relationships, prevent misunderstandings, and foster respectful dialogue. Though it may feel unnatural at first, with practice, this pause becomes a powerful tool for cultivating better communication and emotional self-regulation.
Pausing doesn’t mean ignoring emotions; it means acknowledging them without letting them dictate our actions.
Sometimes, sharing our thoughts with a family member, trusted friend, or mentor can help us manage emotions better. They can offer an outside perspective, helping us see perspectives we might have missed in the fog of emotion.
Similarly, giving things time, even just a day, can dramatically change how we feel and think about a situation. This approach is not reserved for life’s biggest decisions; it applies to daily interactions as well.
Life is full of moments where emotions can run high. While it is natural to feel deeply, it is important to remember that our emotions do not always have the final say. By pausing, reflecting, and letting peace guide us, we can make decisions that honor who we are and what we value.
Decisions made in moments of anger, fear, or sadness are rarely our best ones. When we slow down and allow the storm of emotions to settle, we create space for wisdom, clarity, and choices that stand the test of time.
Inadequate Regulation Leaves Tenants Vulnerable to Arbitrary Rental Hikes
The rental market in Ethiopia, like in many developing economies, is characterised by a complex mix of legal frameworks, socio-economic realities, and informal practices. While legislation exists to protect tenants from arbitrary rent hikes, the practical realities often tell a different story. Despite explicit legal prohibitions and signed contracts, many landlords continue to demand higher rents, causing persistent anxiety for tenants seeking stable housing.
The main reason for this widespread non-compliance is weak enforcement. Although the country has laws regulating rent increases, their implementation and enforcement is inadequate. Limited resources, bureaucratic inefficiencies, and corruption within the relevant authorities create an environment where landlords face little pressure to comply with the rules.
Tenants, on the other hand, are often ill-equipped to secure their rights through the legal system. Many lack the resources or knowledge needed to challenge unlawful rent increases. Filing a complaint, gathering evidence, and pursuing legal action can be lengthy, costly, and often futile. As a result, many tenants are left with few options but to accept inflated rents or face eviction.
The scarcity of affordable housing in urban centers further strengthens the position of landlords. High population density, particularly in rapidly growing cities like Addis Abeba, creates an imbalance between supply and demand. This shortage results in a rental market, where tenants, desperate for housing, are often forced to accept unfavorable terms, including unlawful rent increases, just to secure a place to live. Landlords exploit this vulnerability, aware that tenants have limited options and are unlikely to challenge their actions. This imbalance of power undermines the effectiveness of rental regulations, as landlords operate with impunity, knowing alternative accommodations are difficult for tenants to find.
The informal nature of many rental agreements exacerbates the issue. While formal contracts do exist, a large portion of rental transactions occur informally, without written agreements or proper documentation. This lack of formalization makes it difficult to establish clear terms and conditions, leaving tenants vulnerable to arbitrary rent hikes. Without a clear legal record, tenants struggle to prove the existence of a binding agreement. This informal system hinders tenants’ ability to seek legal redress and allows landlords to circumvent regulatory frameworks.
Socio-economic disparities also contribute to the problem. Many landlords hold a relative economic advantage over their tenants, creating a power imbalance. Landlords often demand higher rents despite legal restrictions, while tenants, already burdened by economic hardship, may lack the resources to afford legal representation. This disparity further aggravates tenant vulnerability and perpetuates a cycle of unlawful rent increases.
Cultural norms and social relationships also shape the rental market’s dynamics. In some communities, personal relationships and social networks influence rental transactions. Landlords may feel justified in raising rents based on their perceived relationship with tenants, irrespective of legal obligations. While this informal system is rooted in social connections, it often undermines the formal legal framework. Tenants, wary of damaging these social ties, may hesitate to challenge landlords.
Addressing these problems requires strengthening the enforcement of existing rental laws, improving bureaucratic efficiency, and curbing corruption within the system. Public awareness campaigns can inform tenants about their rights and the legal processes. Encouraging the use of formal rental agreements and ensuring tenants have access to legal support are crucial steps toward leveling the playing field.
Moreover, tackling the root cause which is affordable housing scarcity is essential. This can be achieved through increased investment in housing and urban planning to reduce the gap between supply and demand. By combining effective enforcement, tenant empowerment, and focus on housing affordability, Ethiopia can address the issue of unlawful rent increases and create a fair and sustainable rental market.
“Committed to a comprehensive and credible accountability process.”
Beth van Schaack, the United States ambassador for global criminal justice, last week took to X (formerly Twitter) to stress Washington’s determination to ensure those responsible for war crimes and crimes against humanity during the Ethiopian civil war are brought to justice.
184,000
The number of businesses which failed to renew their licenses this year in Addis Abeba, representing 46.5pc of permits the city administration’s trade bureau issued.
Abay Bank’s Revenue Soars, Profit Margins Feel the Squeeze in Costly Growth Push
Abay Bank has racked up noteworthy expansions in deposits, assets, and overall revenue. Yet its impressive growth trajectory contained some cautionary signals about profitability pressures in an increasingly competitive market. The Bank’s net profit margin on total assets slipped to 2.26pc in 2023/24, trailing a common industry benchmark of three percent and declining from the 3.82pc mark recorded the previous year.
Part of the margin squeeze resulted from soaring costs, particularly interest outlays, which in 2023/24 ate up nearly one-third of the Bank’s overall expenses. This narrowing of spreads mirrored a market environment where deposit rates often lag behind inflation, forcing banks to steer tight corridors between relatively low-yielding assets and rising obligations. Abay Bank’s profit margin erosion emerged when its net profit dropped 3.2pc to 1.5 billion Br, accompanied by a 22pc fall in earnings per share (EPS), down from 360 Br, though it still is higher than private banks’ mean.
Abay Bank President, Yehuala Gessesse, who has run the Bank for nine years, sees the dampened performance partly driven by monetary policy constraints that stifled loan growth. According to him, a substantial portion of the Bank’s income is interest-based, making the Bank especially sensitive to credit restrictions.
“Due to the monetary policy restriction and other issues, the loan growth was low,” he conceded.
However, Abdulmenan Mohammed (PhD), a financial analyst based in London, blamed the effect of heightened expenditures, from a 33.1pc climb in interest expenses to a 27.7pc jump in wages and benefits, which reached 2.51 billion Br. Other operating expenses soared 48.2pc to 1.5 billion Br, unveiling heavier spending on promotion, insurance, and IT support. These costs led to a 6.4 billion Br outlay, up 30pc from a year earlier.
“The massive expansion of expenses undermined the revenue growth, resulting in a reduction in net profit,” Abdulmenan said.
He warned Yehuala and his team to exercise caution. Yehuala, who has a postgraduate degree in business administration and 25 years of banking experience, defended his growth strategy, arguing that investments in IT and digitisation will make Abay Bank competitive by providing unparalleled customer service.
“We prefer to invest in IT and accessibility such as branch expansion, ATM and POS,” he told Fortune. “But most of the costs are fixed costs.”
In the 2022/23 operational year, the Bank’s deposits surged 29pc to 41.8 billion Br, leading to a net profit of 2.1 billion Br, a 63pc growth. It was buoyed by climbing revenues that hit 7.1 billion Br, 78pc of which stemmed from interest income. Total assets also rose by 35pc, reaching 55 billion Br. The results were attributed to multi-pronged measures, such as enlarging the customer base to 2.5 million, launching 110 new branches with a strong focus on interest-free banking windows, and doubling mobile banking subscribers to 1.28 million.
Last year, Abay Bank’s revenue kept pace with revenue growth of 19pc to 8.4 billion Br; however, it was overshadowed by ballooning expenses that eroded net profit. The Bank’s executives defend their strategy of investing in technology, digitisation, and expansion to capture more market share. They opened 59 new branches last year, bringing the total to 542, but several locations in the Amhara Regional State remained underutilised due to ongoing conflicts.
The Bank’s deposit base swelled by 11 billion Br, mirroring the rise in interest expenses amid heightened competition for liquidity.
Interest on loans, advances, and Central Bank bonds rose 20.2pc to 6.67 billion Br. Service charges and commissions edged up 2.8pc to 1.22 billion Br, while gains on foreign exchange dealings jumped 24.2pc to 192.45 billion Br. The decline in loan impairment provisions, from 219.3 million Br to 86.4 million Br, showed improved asset quality, a silver lining that could address risk for Abay Bank, whose total assets climbed 20.6pc to 66.42 billion Br in 2023/24.
The Bank disbursed 41.11 billion Br in loans, up 12.7pc, and mobilised 52.62 billion Br in deposits, an increase of 26pc.
Though cost pressures suppressed Abay Bank’s bottom line, some shareholders applauded the management for strong capital and liquidity positions. Its paid-up capital jumped 27.3pc to a little over six billion Birr, lifting the Bank’s capital adequacy ratio to 15pc, three percentage points higher than the previous year.
Board Chairperson Amlaku Asres (PhD) told the 4,537 shareholders gathered at the Interluxury Hotel, on Marshal Tito Road, that issues like inflationary headwinds, regional security concerns, and political uncertainties had weighed on the Bank’s performance.
A shareholder, Fisseha Tekeste, called the results “commendable,” though he urged the Bank to consider merging with a more prominent institution for market consolidation.
“When we grow bigger, we become dominant,” he told Fortune.
Another founding shareholder, speaking anonymously, praised the balance-sheet growth but raised concerns that returns have yet to catch up.
“It doesn’t add up,” he told Fortune.
Regulatory limits on lending have chipped away at Banks’ capacity to deploy capital, as the country’s financial sector prepares for foreign entrants. Such constraints, he argued, created a mismatch for domestic lenders aspiring to scale while bracing for external competition. Abay’s loan-to-deposit ratio fell from 87.3pc in 2022/23 to 78.1pc last year, a logical outcome under National Bank of Ethiopia (NBE) caps that constrained credit expansion.
The dip in this ratio coincided with a 41.7pc surge in Abay Bank’s cash and bank balances, lifting the share of total assets to 17.6pc from 15pc. According to the Bank’s President, Abay carefully manages liquidity to maintain flexibility in the face of uncertain regulatory and macroeconomic realities. Labour costs also remain a major line item, with wage and benefit expenses totalling 2.51 billion Br in 2023/24, 39pc of overall expenses, and administrative outlays representing 18pc.
With over 10,000 employees and 1,636 new hires recruited last year to support its push for enhanced customer service, Abay Bank continued to build out physical infrastructure, betting on near-term expenditures for long-term scale.
However, analysts question the prudence of a 1.33pc provisioning ratio at a time when inflation, political uncertainty, and liquidity crunch could test borrowers’ repayment capacity.
Abay Bank’s performance showed industry-wide trends among the 30 private and two state-owned banks, which have expanded deposits by 16.3pc to 2.4 trillion Br. Private banks held 67.4pc of the 290.6 billion Br in aggregate capital, chipping away at the dominance of the state-owned Commercial Bank of Ethiopia (CBE), which still retains over a fifth of the industry’s total capital. Abay Bank’s 20pc jump in assets could mark the ascendance of private banks, whose loan portfolios and deposit mobilisation have seen double-digit rises.
The Bank’s deposit per branch was about 130.61 million Br in 2023/24, a respectable figure that displayed successful retail and commercial outreach. Profit per employee reached 146,541 Br in 2023/24, surpassing the industry’s 10-year average, beginning in 2013. Over the past decade, private banks have outpaced state-owned peers in growth, even if they remain smaller in absolute size. Capital-to-asset ratios generally were around 13.5pc. Abay Bank’s was around 14pc, representing a prudent buffer, while its asset-to-equity ratio of about 7.12 displayed a moderate leverage approach.
According to analysts, these measures suggested Abay Bank, incorporated 14 years ago, is balancing ambition with regulatory caution.
Reliance on net interest income remains a cornerstone of the financial system. More than 74pc of Abay Bank’s operating income last year was derived from interest-based activities, a function of limited foreign exchange availability and still-nascent digital banking services that could generate fee income. Roughly 32.49pc of total costs stemmed from interest expenses, echoing stiff competition for deposits. The Bank’s executives eye fee-based products and upgraded digital platforms as part of their “Journey to Greatness” plan, to broaden revenue sources and attract a tech-savvy segment of the population.
At the Mehal Gerji branch, Zelalem Dereje, its manager, oversees seven employees and credits teamwork for hitting goals in deposits, foreign exchange, and service quality. The branch caters to clients from corporate importers to small-scale retailers. One innovative feature is the “Muday Banking” system. Customers store cash from daily sales and deposit it at their convenience, a model Zelalem says saves them travels to the branch. It is an account capturing Abay Bank’s bid to tailor services for businesses operating on thin margins but seeking secure, convenient options.
“The key to the box is kept at the bank, allowing customers to deposit their funds when possible,” he told Fortune.
According to independent analysts, Abay’s long-term success depends on its ability to deepen non-interest income streams and improve efficiency. Although the Bank’s deposit base and capital cushions are robust, its persistent net profit margin squeezes reveal structural challenges. Rapid inflation, foreign exchange bottlenecks, and political unrest increase borrowers’ risk of falling behind, testing Abay Bank’s credit quality. Yet management remains optimistic that investments in digital platforms, branch expansions, and staff training will ultimately pay off once policy constraints ease.
“We’re implementing well-crafted resource mobilisation and liquidity management strategies to sustain our liquidity position,” said Yehuala.
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