Fortune News | May 20,2020
Yinager Dessie (PhD), governor of the central bank, convened bank presidents and board directors in his office two weeks ago. His purpose was to persuade or put pressure on them - depending on one's vantage point - to cut interest rates on lending, gossip disclosed. It was weird to see an authority with so much power at his whims appeal to the moral conscience of the market, while he could have influenced the change he wanted with the stroke of a pen, claims gossip.
If the policy objective of the gathering, which close to 50 people attended, was to put cash in the market to prime consumer spending in the hope of stimulating the economy, the Governor could have simply cut interest on deposits from the current rate of seven percent, gossip says. It would lead banks to adjust their lending rates accordingly from an average of 15pc that is applicable now across the industry. Although the fear understandably might be that such a monetary policy move discourages national savings, such is already the case where the real interest rate on deposits is negative, claims gossip.
Ironically, what preoccupied the minds of some of the board directors was them having trouble carrying out their responsibilities during this time of mandatory physical distancing, gossip observed. Governor Yinager rebuked their appeal to get waivers to conduct their respective board meetings inside boardrooms as an undue request in violation of the emergency decree that bans any gathering of four or more, gossip disclosed. Never mind that there was a 10 times larger number of people congregated at his office when all this took place, gossip claims.
Many of the directors elected to oversee the business of banks' boards are not adept at meetings in the virtual world, claims gossip. They may probably be pondering taking their case to Girma Birru, chairman of the board of the National Bank of Ethiopia (NBE), claims gossip. An old hand in government, Girma has reemerged as the most influential person in the administration, running the macroeconomic policy show, gossip observed.
He was among the top lieutenants of the late Meles Zenawi in practising the developmental state model in Ethiopia, with results remarkable in several fronts, claims gossip. Over the 15 years since the mid-1990s, he had served as a minister for economic cooperation, as well as Trade & Industry before he was sent to Washington, DC as Ethiopia's ambassador.
Girma has always been around the levers of power since his first debut as an economist in the Office of the Council of Ministers as way back as 1982, says gossip. Now a senior macroeconomic advisor to Prime Minister Abiy Ahmed, Girma is a prime mover on the economic front, wielding so much influence over how the microeconomic wheels should be in motion, claims gossip.
His boss, Prime Minister Abiy, characterised his government as something of a reform and not a revolution. It implies that in reform, the past tarries unlike revolutions, which impose a foreboding break with everything that represents and reminds one of the past, according to gossip.
Another prominent figure of the past with considerable influence in the current administration's business is Abadulla Gemeda, gossip observed. A rebel, a retired military general, regional state chief and speaker of parliament, Abadulla has had a remarkable journey in public life since his days as a prisoner of war in the hands of Eritrea's insurgents, gossip recalled.
Many find him disarmingly charming, with a flair for humour, claims gossip. However, he is now entrusted with the weighty responsibilities of coordinating all federal agencies involved in the security apparatus and overseeing their work, gossip disclosed. Abiy owes his earlier ascendance to power to Abadulla's tutelage, claims gossip.
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