The past year has served its share of incidents, from unpredictable policy changes by the federal government to the financial sector prep to navigate through the entry of foreign-owned banks. The aftermath of the pandemic, coupled with the war in the north, led to a cost of living crisis touching the lives of many. The foreign currency shortage and uncontrolled parallel market left a dent in each sector. As the world progresses to a New Year, Fortune invites its esteemed readers to reflect on the selected issues that happened in 2022.
The financial market is nervous, central bank authorities are relaxed, and industry executives remain sanguine over their prospects. Nonetheless, Ethiopia's banks are heading to a liquidity crunch due to sluggish deposit mobilisation imposed by the militarised conflict in the north and a resurged demand for credit.
The construction industry continues to wallow in the murky waters brought on by the COVID-19 pandemic, foreign currency shortages, and illicit business in the trade of building materials. Construction firms increasingly avoid contracts that include the responsibility to buy the materials for fear of runaway inflation. Neither are project owners faring well.
Consumers were shocked by an absurd jump in the price of cooking oil last week. It occurred in less than a year for the second time, casting serious doubts over the authorities' desire for import substitution and improved domestic production. Consumers and experts are left wondering whether the billions of Birr spent on building giant oil plants and importing raw materials could have been put to better use elsewhere.
With the season of Lent over, the busiest time of the year for innumerable butcheries in Addis Abeba begins as consumers flock in for their fill of meat. However, rising prices mean that consumers have not been as quick to do so this year. A dreadful drought in pastoralist areas, ballooning costs for feed, transport disruptions due to war and conflict, contraband trade and an overly complex supply chain are pushing prices upward, displeasing consumers.
A debilitating shortage of anaesthetic drugs has left patients in need of surgical intervention and desperately waiting. Public hospitals have been forced to stop admitting patients for surgery as stocks run dangerously low despite record spending on medical imports. It is a frustrating predicament for medical professionals who have toiled on the frontlines of the battle against the pandemic, and a nightmare for patients who have nowhere to turn.
Runaway inflation and unbridled unemployment are pushing the youth of Addis Abeba deeper into a life of crime. Purses and phones being snatched on the roads is hardly newsworthy anymore, while cars are reportedly being stolen in broad daylight. Even more worrisome is the lack of solutions.
A flood of new entrants and industry hopefuls are queued at the thriving financial sector even after the central bank raised the minimum capital threshold to five billion Birr. The rush presents opportunities for a country with low financial penetration, but with it comes a challenge for the industry. The banking sector is scrambling for a skilled and experienced workforce. Executives are forced to choose between ballooning expenses for wage and operating costs and professional staff.
Here is another year with torrential rains causing floods, menacing Addis Abeba and populations across the country. Residents wade through the rainy season, adding anxiety: mud, chilly weather, and sudden rainfall cause much grumbling in the capital. Yet, the storms also bring them mayhem as floods claim lives and damage properties worth tens of millions of Birr. Poor drainage systems, ill-advised housing developments, and pollution are among the culprits. And the capital is hardly prepared.
The academic year has begun. For most students, it is simply back to the routine after a three-month rainy break, known elsewhere as a summer break. For parents, it is a pressure growing worse each year due to ballooning prices for school supplies.
Ethiopian authorities pledge to see it not only become self-sufficient in wheat production. The prospect of becoming a net exporter country next year is within reach. Their field visits are often followed with pictures and video clips displaying lush green lands where tractors and agri machines roam around. However, it is not conclusive whether this is media hype or hopes to be realized.
The entry by foreign-owned banks and non-nationals into the financial sector has reached a point of inevitability. However, how to navigate through the web of opportunities they are hoped to bring and the risks they pose concerns many. The authorities have their blueprint; if not caution, the industry reacts with mixed feelings.
Adanech Abiebie's mayorship of Addis Abeba over the last year is marred by news about the partial or complete hiatus on land-related services, all too familiar to residents of Addis Abeba. In August last year, the City Administration suspended all land-related services claiming to battle extensive illicit construction activities before rescinding them four months later. The consequences they impose go beyond disrupting plans and inconveniencing citizens; the city administration loses over half a billion Birr from service fees and capital gain taxes.
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