IMF Recommends CBE’s Asset Quality Review

Feb 1 , 2020


The latest staff report of the International Monetary Fund (IMF) recommends the asset quality review of the Commercial Bank of Ethiopia (CBE) due to tight liquidity. CBE’s liquidity ratio dropped last year due to a persistent asset-liability mismatch, according to the report. It also stated that the Bank has been prioritising the financing of long-term projects undertaken by state-owned enterprises by investing in bonds and extending loans, drawing on its deposit base. Credit to the state-owned enterprises has expanded in line with significant growth in state investment in recent years, which tightened liquidity conditions of the Bank and exacerbated the maturity mismatch, according to the IMF. Out of the total credit portfolio of the Bank, the energy sector has the highest exposure, accounting for about 40pc of the Bank's total asset portfolio. The report also indicated that sluggish repayment of state-owned enterprise's loans exacerbated the CBE’s liquidity position. "CBE has a large exposure to foreign exchange risk, as the Bank plays a central role in foreign exchange transactions,'' reads the report. The report has also downgraded Ethiopia's prospect for economic growth in the current year by one percentage point, from the 7.2pc it had projected earlier, attributing the possible growth decline to macroeconomic policy launched to address the structural imbalance in the economy.


Radar

BRIDG-EATERIA

They say, "Where there is traffic, there is business." It reflects the colour of Addis Abeba roads and roundabouts. Around Bole, commonly known as the Ring Road, vendors serve tea and snacks underneath a bridge. Owing to these selling methods allow pedestrians and drivers to get the service they need while walking and driving. Despite that, such practice has become a frequent encounter in the heart of the city streets. The most common purpose of a ring road is to reduce traffic volumes in the ur...


Radar

WALKWAY DISPLAY

Pedestrian walkways around Addis Abeba are growing smaller by the day, competing to gain a foothold in the public spaces. The city, which prides itself as Africa's political and diplomatic capital, becomes a showcase of contrast. Beauty and affluence wrestle destitution and poverty to claim space. Vendors have displayed their second-hand outfits, shoes and luggage for sale on a roundabout in front of the Ministry of Education, up at the Arat Kilo area...


Radar

TRAILER HOMES

Retired city buses were once converted to bakery outlets retailing bread supplied by ‘Sheger Bakery' during their twilight zone. The city administration had used Anbessa City buses as its retail shops before formal outlets replaced them. Sheger Bakery, touted as the largest bakery and flour factory with the potential of baking two million loaves of bread daily, was to cater for millions of people in Addis Abeba with a subsidized bread supply but failed to live up to expectations. The old city...