Radar | Feb 01,2020
Brook Taye (PhD), CEO of Ethiopian Investment Holdings (EIH), Ethiopia's sovereign wealth fund, has appointed three individuals to the board of the state-owned Commercial Bank of Ethiopia (CBE), following his board's approval.
Henok Teferra, managing director of Boeing Africa; Mahlet Kassa, a partner at Lidet Abebe Tizazu Law Office, which partners with Italy's BonelliErede; and Henok Assefa, founding manager of Precise Consult and co-founder of the Addis Abeba Angels Network, have been appointed to CBE's board, which is public officials have heavily influenced. They have replaced Ahmed Tusa, an advisor to the Minister of Trade & Regional Integration (MoTRI); Addisu Haba, a former president of the defunct Construction & Business Bank (CBB) and the Bank of Abyssinia and Global Bank; and Getachew Negera, senior advisor to the minister of Finance.
"I've gained wisdom from serving on the board," said Ahmed, reflecting on his tenure.
The new appointees bring a wealth of experience from diverse professional backgrounds. Henok studied law and has an extensive background in diplomacy, aviation, and the corporate world, having held executive roles at Ethiopian Airlines, ASKY Airlines, and Safaricom Ethiopia. He also served as Ethiopia's envoy to France. With a postgraduate study in international economic law from the University of Paris, he aspires to elevate CBE's global competitiveness.
Mahlet Kassa, Partner at Lidet Abebe Tizazu Law Office
"I plan to make CBE internationally competitive," he told Fortune.
Mahlet specialises in banking and finance law, offering expertise in external commercial loans, project finance, and supplier credit. She holds a postgraduate degree from Kingston University in London. Henok of Precise Consult is a figure in Ethiopia's entrepreneurial ecosystem, serving on the boards of the American Chamber of Commerce and the Addis Abeba Chamber of Commerce. He did his postgraduate studies in economics at the Fordham University in New York.
The trio joins a 10-member board chaired by Finance Minister Ahmed Shide. Other members include figures such as Moges Balcha, head of the Prosperity Party's Addis Abeba branch; Tigist Hamid, director general of the Information Network Security Administration (INSA); Bereket Fisehatsion, CEO of the Ministry of Planning & Development's planning division; Olani Sekata, president of CBE's Trade Union; and Aynalem Nigussie, minister of Revenues.
According to Habtamu Hailemichael, deputy CEO of EIH, the selection process adhered to stringent criteria outlined in the laws governing state-owned enterprises enacted last June. Board members are selected based on qualifications, including relevant experience and professional competence. One-third of the board should be independent and possess at least five years of professional experience. Appointments are limited to three-year term, renewable once, with staggered terms to ensure continuity.
"The selection reflects our commitment to inclusivity, gender balance, and merit-based considerations," Habtamu told Fortune. "We maintain a database of potential candidates to ensure future appointments bring a broad spectrum of expertise."
Experts view the shift toward professional oversight as a positive development.
"The merit-based board selection is a step in the right direction," said Tilahun Girma, a financial policy analyst. "The previous structure contributed to the bank's non-performing loans."
The law also imposes restrictions to prevent conflicts of interest. Members should not have been employed by the respective state-owned enterprise within the past three years and are limited to serving on more than two boards of non-competing state-owned enterprises. The National Bank of Ethiopia (NBE) considers appointments against its "fit and proper" criteria.
Incorporated in 1942 as the State Bank of Ethiopia, CBE was restructured in 1963 to focus on commercial banking. Recently, the federal government authorised the issuance of 900 billion Br in delayed bonds to recapitalise the Bank and address non-performing loans. Of this amount, 845.3 billion Br will settle debts of state-owned enterprises, while 54.7 billion Br is earmarked for propping CBE's capital base.
Under the managment of Abie Sano, CBE remains a dominant player in the financial sector, posting a net income of 22.02 billion Br in the past fiscal year, claiming a 36pc share of the industry's total net income recorded in the 2023/24 fiscal year. Its total assets grew by 10pc, reaching 1.44 trillion Br. Preliminary figures for the fiscal year show the addition of 4.7 million new customers, bringing total accounts to 45 million, boosting its deposit mobilisation by 120.7 billion Br, exceeding 1.17 trillion Br.
CBE also reported strong loan performance, collecting 171.2 billion Br and disbursing 218 billion Br in loans and advances. Of this, 198.3 billion Br went to private borrowers.
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