Banks Raise 1.2b Br for Humanitarian Response

Banks have raised 1.23 billion Br to support efforts by the federal government to provide humanitarian assistance to the displaced in the northern parts of the country due to the year-old militarized conflict. The latest contribution brings the total amount the banking industry has provided for relief efforts to over 1.8 billion Br.

Organised by the Addis Abeba City Administration, the banks made the contribution at a fundraising event held at the Sheraton Hotel last week was attended by Prime Minister Abiy Ahmed (PhD) and Mayor Adanech Abiebie.

The banks raised the funds through the Ethiopian Bankers' Association, an industry lobby group, chaired by Abie Sano, president of the Commercial Bank of Ethiopia (CBE). Half of the funds raised last week came from the CBE, while the Development Bank of Ethiopia (DBE) and private commercial banks contributed the balance. According to people close to the matter, banks made donations proportional to the profits they made last year.

“We contributed to support humanitarian aid," said a senior bank executive who requested anonymity. "The contributions were requested for the support of those displaced.”

Over two million people have been displaced in Amhara and about half a million in Afar regional states. The number of people that need humanitarian assistance has swelled to five million in the Amhara region alone. An estimated 5.5 million people need emergency humanitarian assistance in Tigray Regional State, according to UN-OCHA.

The banks made a similar donation in August this year, contributing 400 million Br to humanitarian efforts. A year ago, the Association raised 200 million Br to back the Ethiopian National Defense Forces (ENDF) and support the rehabilitation of people displaced due to the war. Half of this amount was donated by the CBE while Awash, Dashen, Hibret, Abyssinia, the Cooperative Bank of Oromia and the DBE donated 10 million Br each, covering 30pc of the total.

"We had taken time to discuss the issue within the Association," said Melaku Kebede, CEO of Hibret Bank. "We contributed like any other industry that was asked to."

A total of 1.5 billion Br was raised last week to support the federal army and humanitarian assistance efforts. The remaining quarter of a billion Birr was raised from private companies and businesspeople, according to Yonas Zewde, head of the City Administration's Communications Office.

MIDROC Ethiopia and the Construction Contractors Association contributed 100 million Br each, while the Ethiopian Construction Works Corporation donated 50 million Br.

The conflict has burned a hole in the federal budget, exacerbating the strain caused by the COVID-19 pandemic. By the end of the third quarter last year, the recurrent defence budget consumed 23 billion Br, six billion Birr higher than what parliament apportioned for the fiscal year. The defence budget for the current fiscal year is earmarked at 22 billion Br.

The federal government has spent close to 100 billion Br on humanitarian efforts and rehabilitation in Tigray, Billene Seyoum, the Prime Minister's press secretary, told CNN last week. In June this year, armed forces in Tigray took back control of large parts of Tigray, including Meqelle, and expounded the war farther south and east, covering the Amhara and Afar regional states. Last week, the federal army alongside regional forces from the two states and vigilante groups were battling the armed forces from Tigray in areas of northern Showa and Afar.

The toll on humanitarian needs is deepening as human suffering increases.

Ethiopian nationals abroad and others have also been raising funds, amounting to 200 million Br following the ceremony last week, Yonas disclosed.

"The government budget alone can't sustain the rehabilitation process," he told Fortune. "We'll need support from businesspeople."

According to a humanitarian and recovery response plan prepared by the Amhara regional government, financial support in the hundreds of millions of dollars is needed to respond to humanitarian catastrophe and rehabilitation works.


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