A Year of Colossal Headlines

The past year has seen anything but ordinary for the world and Ethiopia in particular. Much of what made 2021 an atypical year, such as the civil war in the north and the lingering COVID-19 pandemic, was carried over from 2020. It will undoubtedly continue to influence the events to come in the Year 2022. However, last year also marked many developments whose ripples will reverberate for the foreseeable future. From landmark decisions of the central bank and the historic conclusion of the state monopoly on telecommunications to the drawn-out national elections and the consequent government restructuring, last year saw more than a few noteworthy headlines. As the world steps into the New Year, Fortune invites its esteemed readers to take a glance back at what were the 10 most-read news stories of 2021, ranked by the number of views garnered on www.addisfortune.news.


Central Bank Orders Banks Freeze Loans

The decision by the central bank to suspend all collateral-based loans in August 2021 was the most-read story of the year. The National Bank of Ethiopia (NBE) order to the senior executives of commercial banks was an unexpected measure communicated to them through text messages. The suspension included the disbursement of loans that had already been approved. The text messages did not specify how long the suspension was to last. Neither were officials at the central bank forthcoming to explain the rationale behind their abrupt measure. According to senior government officials, the decision was made to curtail "economic sabotage." The freeze lasted nearly four months and left an undeniable mark across all economic sectors. Although regulators at the central bank had exempted importers, coffee producers and petroleum companies from the freeze before reinstating collateralized loans at the end of November, the move was detrimental to the manufacturing sector, construction industry, and the financial sector.


Addis Abeba Hotels Closed Temporarily Over 'Inciting Music'

The city authorities' decision to shut down two prominent hotels Addis Abeba, alleging that they have played "inciting music" following the withdrawal of federal troops from Tigray Regional State, was a headline that invoked high interest among readers. Harmony and Kaleb hotels on Djibouti Street, in the Bole Medhanialem area, were shut down in early July 2021, after local authorities alleged the two establishments had played music that could stir up emotional backlash and violence. Barely a week later, authorities also closed down six other hotels situated in the Haya Hulet and Bole areas of Addis Abeba. Aksum, Debre Damo, Holiday, Negest Saba, Diamond and Addissinia hotels were among the establishments closed over various allegations, including violating COVID-19 protocols and partaking in other "illegal" activities. The closures were part of a city-wide crackdown on businesses, which saw hundreds of establishments shut down in a matter of weeks.


Businesswoman Tries to Acquire Nexus Hotel for 740m Br

Another story that captured readers' attention last year was a businesswoman with assets in the hospitality industry attempting to acquire the Nexus Hotel, a four-star property located in the Gerji area, for 740 million Br. Tiliksew Gedamu, the owner of the Grand Hotel in Bahir Dar, tried to buy the eight-storey hotel under the Swiss Inn Hotel & Resort management. Nexus was first opened in 2012 and original developers decided to sell the property to shed off debt, including a 25 million Br loan from Awash Bank. Once a teacher, Tiliksew started in business through the transport sector before moving to the hospitality industry. She began with a hotel in Debre Markos and opened the largest hotel in Bahir Dar, the seat of the Amhara Regional Administration. She is a Chairperson of Grand Resort & Spa Bahir Dar, under the management of the Radisson Blu Hotel Group, and General Manager of Piccolo Abay International Business Plc. Nexus Hotel is not the first property she has tried to acquire in the capital. She bought Bellevue Hotel in the Megenagna area in January 2020. The authorities closed Nexus Hotel a week after the sale for allegedly violating COVID-19 protocols and operating with an expired business license, leaving 200 employees out of work. It has yet to reopen.


Ethiopia Awards Safaricom First Telecom License

The over a century monopoly enjoyed by the state-owned Ethio telecom came to an end in May last year, hence more interest from readers. Ethiopia awarded a telecom license to the Global Partnership for Ethiopia, a consortium of Safaricom, Vodafone, Vodacom, CDC Group Plc, and Sumitomo Corp. The highly anticipated award marked the first full telecom operator license awarded to a private business. The consortium won the bid after offering 850 million dollars. The only other bidder, the consortium of MTN and the Chinese Silk Road Fund, did not manage to win a license as its 600 million dollar offer was deemed inadequate by the authorities. Safaricom Ethiopia Plc is scheduled to begin operations in 2022 and has been assigned the block number '07' for its mobile calls. In September, the Ethiopian Communications Authority had issued a Request for Proposals (RFP) from prospective investors interested in acquiring the second telecom license, dubbed "License B," up for grabs with the deadline set for December. However, the Authority abruptly suspended the bidding process in the final days.


Ministry Redefines 'New' for Vehicle Taxation

Customs authorities were directed to consider all motor vehicles imported within three years of their manufacturing date as 'new' to determine duty and excise taxes. With the updated definition from the Ministry of Finance, the previous rule requiring a vehicle to be imported within a year of manufacture to be labelled new was scrapped. However, it required importers to bring vehicles with mileage not exceeding 4,000Km to benefit from the significantly lower excise tax levied on brand new cars. All completely and partially knocked-down vehicles imported to be assembled domestically were also considered new. However, in December, the Ministry of Justice ruled the directive outlining the tax privileges void. The news came as a major blow for close to 1,500 members of taxi associations who had been hoping to capitalise on the duty exemptions.


Ethiopia Recalls All Diplomats But Ambassadors, Finance Heads

In July last year, all Ethiopian diplomats, barring ambassadors and heads of finance, were instructed to report back to Addis Abeba by mid-August 2021. They were called back to attend a reorientation, which took place at the end of the following month. A few weeks later, officials of the Ministry pursued Prime Minister Abiy Ahmed's pledge before parliament to close no less than 31 missions abroad, in a manner Dina Mufti, the spokesperson, described as "rightsizing" instead of downsizing. Two missions in the United States – Los Angeles and Minnesota – have been redirected to the embassy in Washington DC, under Fitsum Arega. Embassies in Brasilia and Ottawa were also slated to be folded into Washington DC's portfolio. Three consulates in China – Guangzhou, Shanghai and Chongqing – were on the list, while the embassy in Beijing and the consulate in Hong Kong remain open. Embassies in Dublin, Accra, Seoul, Doha, Stockholm, Dakar, and Kigali were slated to continue providing services as 'laptop ambassadors.' The same is true for the embassy in Cairo, where Markos Tekle serves as an ambassador.


Central Bank Modifies Diaspora Account Restrictions

The requirement that obliged banks to surrender 30pc of forex deposited by diaspora account holders to the central bank ceased to apply beginning September 1, 2021, after the central bank modified the rules. However, the surrender requirements on remittance (personal transfer) and exports were raised from 30pc to 50pc. Exporters were allowed to use 40pc of their foreign currency deposits for an indefinite period of time. The existing rule limited the figure to 31.5pc. The central bank announced a series of other changes on the final days of August, including doubling the reserve requirement for commercial banks to 10pc and demanding that financial institutions invest in bonds from the Development Bank of Ethiopia (DBE). Commercial banks were obligated to invest one percent of their annual loans in the bonds while insurance firms were mandated to allocate 15pc of their net annual income.


Ethiopia Berates the West: "Condescending", "Patronising", "Belligerent", and "Destructive"

Ethiopian authorities were angry with western countries feeling their country was under an orchestrated attack that was "condescending in nature, often patronising in tone, belligerent in approach and destructive in outcome." Billene Seyoum, the spokesperson of the Prime Minister, claimed a concoction of figures and stories about developments unfolding in the Tigray Regional State was in the making, designed to push a particular global narrative "which does not serve the people of Tigray." Her press briefing was the first given by the Prime Minister's Office since war broke out in Tigray. She made the strong statement amidst calls by western governments to see Eritrean forces withdraw from Tigray, a ceasefire agreed, unfettered humanitarian access allowed, independent investigations into atrocities carried out and perpetrators are held accountable.


Reorient Economic Policies, IMF Tells Ethiopia

The International Monetary Fund (IMF) called on Ethiopian authorities to reorient economic policies, attributing its urging to pressures on the economy due to the COVID-19 pandemic and the "domestic security situation". A statement the IMF issued on February 23, 2021, fell short of discussing the ongoing military conflict between the federal government and forces of the Tigray Regional State. However, the IMF sees risks associated with political uncertainty as challenges to a positive economic outlook, alongside the impact of locust infestation and "the magnitude and duration of the pandemic." Unlike its earlier projection of flat growth in GDP, the IMF said Ethiopia's economy would grow by two percent during this fiscal year, and an impressive rebound of 8.7pc the following year.


Edna Mall Receives Offer Over Three Times Auction Threshold

A landmark property in the busiest neighbourhood of Addis Abeba received an offer that was over three times the threshold auction price of 237 million Br in July 2021. A Chinese industrialist, East Steel Plc, offered 810 million Br to acquire Edna Mall, a prime property under Tekleberhan Ambaye Construction Plc (TACON). Located on Cameroon Street, across the Bole Medhanialem Cathedral, the property had been held as collateral against a loan TACON took from the state-owned Commercial Bank of Ethiopia (CBE). Over five months later, the property has still not been handed to East Steel, which has been operating in the Eastern Industry Zone in Dukem, 35Km southeast of the capital, since its incorporation in 2014 with 279 million Br in equity. On December 10, 2021, officers from the CBE sealed several parts of the Mall, including Matti Multiplex Cinema, Bob & Bongo’s Fun Palace and administrative offices, as part of the property transfer process. Two weeks later, employees of Edna Mall threatened to take the property's management to court, alleging "unlawful dismissal" as the CBE's handover to East Steel took a sour turn. The Bank has also issued an eviction notice, giving Edna Mall's tenants until early January 2022 to move out.