The London-based accounting giant, PricewaterhouseCoopers (PwC), has secured a 1.3 million dollar contract to help executives of the Commercial Bank of Ethiopia (CBE) reposition the state-owned Bank.

PwC emerged as the winner among five consulting companies that expressed interest in the contract three months ago. Three companies reached the financial stage, with McKinsey & Company offering 17 million dollars and KPMG offering 2.4 million dollars for the lucrative contract.

The project is part of a broader financial sector strengthening and access initiative launched with a half-billion-dollar loan from the World Bank. The Ethiopian government aims to ensure financial stability through the reforms. It is a key component of the reform, where the federal government seeks to ensure financial sector stability through these reforms, including at the National Bank of Ethiopia (NBE) and the Development Bank of Ethiopia (DBE).

CBE has undergone reform since the restructuring of its board two years ago. The Bank’s board is now chaired by Teklewold Atnafu, former central bank governor and current monetary policy advisor to the Prime Minister.

Despite being in a strong financial position with consistent growth in key areas such as assets, loans, and deposits, its profitability has been volatile, with a 13.9pc growth from the previous year, reaching 13 billion Br. CBE’s capital adequacy ratio dropped by 3.7pc to 5.4pc last year, representing a small percentage of the industry’s average of 17pc.

The restructuring project will focus on revamping the Bank’s digital banking, data management, and information systems, according to Dahlak Yigezu, CBE’s deputy director for digital banking services.

CBE initially engaged McKinsey to develop strategic planning documents, paying 1.7 million dollars for the service. However, the Bank’s management, led by Abie Sanu, deemed McKinsey’s request of 24 million dollars to implement the reform too expensive. CBE’s attempts to implement some of McKinsey’s recommendations internally were unsuccessful, leading them to seek external technical expertise.

According to Dahlak, the Bank plans to implement 70pc of the strategy in-house while outsourcing the remaining portion to international firms with expertise in digital factory concepts. Digital factory addresses virtual product creation, from business opportunity analysis and user story development to backlog management, application development, testing, deployment, and ongoing operations.

Sources familiar with the bidding process revealed that CBE’s management opted for a two-step tender with cost and technical stages, allowing companies to present a range of tasks for CBE to choose the most advantageous offer based on their asking.

The substantial variation in prices quoted by bidders raised eyebrows, but project office managers claim it is expected. An executive from the Project Office said that the price discrepancy would not impact the output as the tasks are not material-based, unlike construction projects, where offering lower prices is customary among bidders.