A businessman trading in electronics, Abel never thought he would be burdened in making timely payments for suppliers. Running a store in Mercato, he has a weekly turnover of somewhere around 800,000 Br though this may go up to 1.2 million Br when business is booming. With huge chunks of cash on hand and deposits in banks, it used to be simple for him to issue payments to his suppliers.

The good old days appear to have gone now. Business is no longer the usual beginning last year after authorities at the central bank imposed cash withdrawal limits on depositors and businesses to 200,000 Br a day. Abel tried to overcome this, but what was more onerous was the transaction limit put in place. In January this year, the National Bank of Ethiopia (NBE) imposed limits on account-to-account transfers to five a week, followed a month later by similar restrictions on digital transfers.

Businesspeople such as Abel have had to navigate through the ensuing financial mire. A few found a workaround, incentivising customers to pay in cash, offering better deals. Others grew accustomed to digital transactions. Neither group could escape the dire circumstances to hold a significant amount of cash in hand.

Abel stopped depositing daily sales in the bank.

"I can't pay my suppliers if the money is in a bank," says Abel. "I have business partners to whom I'm supposed to transfer cash."

A shoe trader in Mercato was compelled to open nine accounts in several banks to withdraw cash as he pleases. He accepts a transfer to these accounts and slowly moves the money to his main account at his preferred bank. Still, whenever he plans to purchase from his suppliers, he stocks cash a few days ahead.

The story of Abel is an ordeal several experience, forcing them to hoard cash, hence betraying the government's plan to bring down the amount of money circulating outside of the banking system. Months before the government decided to demonetise the Birr last year, the amount of money in circulation outside banks stood at around 113 billion Br. To the delight of officials at the central bank, the figure fell to 64.6 billion Br following the demonetisation in September 2020.

Everything had seemed to be going according to plan – until it was not.

The money outside the banking system had shot back up by the second quarter of this year to 108.3 billion Br. It recorded a staggering increase of 65pc, a development in stark contrast to the surprisingly high levels of deposit mobilisation commercial banks have reported since the year ended two weeks ago. The total stock of deposits mobilised grew to 1.3 trillion Br during the year, marking a 25pc annual growth.

The state-owned giant Commercial Bank of Ethiopia (CBE) led the pack by miles, having mobilised net deposits of 140 billion Br, pushing its aggregate deposits to 735 billion Br. It accounts for more than half of the total deposits in the country. Its mobilisation saw a sharp uptick of 86 billion from the previous year.

Awash International Bank is a leader amongst private banks, mobilising 33.8 billion Br in deposits last year, bringing its total to 107 billion Br. However, the highest rate of growth was registered by the Bank of Abyssinia, which mobilised deposits of 41.2 billion Br in a year, almost doubling its aggregate. The Bank's management attributed the staggering 86pc increase to its aggressive network expansion drive, opening over 100 new branches. Having a total of 607 branches, Abyssinia registered 2.5 million new account holders over the year.

The Bank's deposits showed a spike in the months leading up to November when the demonetisation process ended. It has since been consistent except for a few down periods during tax seasons, disclosed Wosenyeleh Abera, director of deposit mobilisation at Abyssinia.

Industry insiders see this far from a reflection of the performance of the banking industry. Abyssinia's heavy mobilisation rather signifies a migration of depositors from other banks.

Abyssinia, however, has benefited from the demonetisation process, which forced savers to deposit cash holdings to switch over to the new banknotes. The same is true for the industry, which has seen the opening of 15 million new accounts since the change in national currency, bringing the total depositors to 66.2 million.

This testifies that the demonetisation process and measures taken since were not in vain for officials at the central bank.

"The transaction limitation and the demonetisation policies met their goals in the early days of its implementation," says Fikadu Digafe, vice governor and chief economist at the central bank.

The industry concurs.

United Bank registered close to seven billion Birr in deposits last year, almost 30pc higher than what it had managed to mobilise during the preceding year. Its President, Melaku Kebede, attributed the growth to the demonetisation policy, curbing cash hoarding, which he sees as a perilous problem in the industry.

"So much so that we had trouble finding safes in the market," he told Fortune.

Despite the gratification by policymakers, regulators and executives, the public has gradually resorted to other means of storing cash, including hoarding practices.