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The Year's Biggest Stories

The past year has had more than its fair share of head-turning headlines, although the news has been negative more often than not. Civil war continues to rage in the north, the surging cost of living shows no signs of slowing down, and a disastrous drought has reared its head in the east and south. However, there was some good news as well. As the country steps into a new year, we invite our esteemed readers to take a glance back at the 12 most-read news stories of the past year on www.addisfortune.news.

2021 / 22
September

Central Bank Eases Loan Freeze on Importers and Manufacturers

Central bank regulators' decision to loosen restrictions on collateralized loans was the most-read article of September 2021. Central bank Governor Yinager Dessie (PhD) introduced a blanket freeze on collateralized loans the previous month, citing "economic sabotage." Regulators moved to exempt importers and edible oil producers from the freeze a few weeks later. The coffee industry and petroleum suppliers were granted exemption shortly afterwards. The freeze was eventually lifted completely in November that year. Regulators conceded that the restriction had affected the economy and the demand for credit has increased during the four-month freeze. “We had to choose between two evils,” said Solomon Desta, vice governor of financial institutions at the central bank.

October

Mortgage Loan Caveat Leaves Loan Hopefuls Frustrated

The central bank's four-month freeze collateralized loans left many who were in the process of applying for mortgage loans in a sticky spot. The headline grabbed the most attention in October as regulators imposed tightened mortgage lending rules citing concerns about rising bad property loans and high household debt. Borrowers who attempted to file applications for mortgage loans were disappointed to learn that the exemption only applied to loan applications that were already filed before the freeze. Loans provided by banks to employees account for three percent of the total mortgage loans advanced.

November

Salt Trader Embarks on 8b Br Addis Abeba Tower

Another headline that grabbed readers’ attention was the announcement of plans for the construction of four skyscrapers in the heart of Addis Abeba at a cost of eight billion Birr. Temesgen Kefyalewis, major shareholder and general manager of Jerr Plc, is an influential player in the salt supply chain and the investor behind the project. The buildings are designed by SLIK Archtekten GmbH, a Switzerland-based firm. Bamacon Engineering, a grade-one contractor incorporated in 2001, was awarded the contract to carry out structural works.

December

Authority Designates ‘07’ for Safaricom Ethiopia Calls

The decision to designate the '07' code for Safaricom Ethiopia Plc's network was a big talking point in December. Safaricom Ethiopia won the country's first-ever private telecommunications operator license earlier that year after offering 850 million dollars. The incumbent state-owned Ethio telecom operates with the '09' code. Safaricom Ethiopia launched a pilot service in Dire Dawa last month following long delays in its commercial operation start date due partly to drawn out negotiations with Ethio telecom over an infrastructure sharing agreement.

January

Ethiopia Demands Kenya Tell Abducted Businessman's Whereabouts

The abduction of Ethiopian businessman Samson Telkemichael in Nairobi late last year received a lot of media attention. A video captured by bystanders showed a man believed to be Samson being roughed up and forcefully removed from his car by unknown men in civilian clothes before being bundled into a Subaru Forester. A few weeks later, Ethiopian diplomats in Nairobi began pressing Kenyan authorities to be forthcoming with information on the businessman's whereabouts. Samson's location and safety remain a mystery.

February

Ethiopia’s Sovereign Fund gets Mamo Mihretu as Founding CEO

Another enthralling story for readers in February was that Mamo Mihretu, a policy advisor to the Prime Minister, was appointed founding chief executive officer of the Ethiopian Investment Holdings (EIH). Mamo as one of the "young liberal technocrats" with international experience to join Prime Minister Abiy Ahmed's (PhD) administration as a policy advisor and a chief trade negotiator. The EIH was formed a few weeks prior to his appointment as the country's first sovereign wealth fund. Over two dozen of the largest state-owned enterprises, including the Ethiopian Airlines Group, the Commercial Bank of Ethiopia, and Ethio telecom, have since come under its wing.

March

Suspend Digital Remittance Platform: Central Bank Tells Abyssinia

Last March, regulators at the central bank ordered the suspension of digital remittance platforms, CashGo and MamaPays, which had been working in partnership with the Bank of Abyssinia. Regulators argued that neither the Bank nor the tech firms that developed the platforms held valid permits. The National Bank of Ethiopia (NBE) eventually reversed the decision and granted Abyssinia Bank breathing room from complete dependency on internationally licensed remittance service providers such as WesternUnion and MoneyGram.

April

Ride Hailing Companies Proliferate, Gov't Remains Incognizant

Attention in April was on the ride-hailing industry, which has boomed since its appearance in 2017 with the entry of ZayRide as the first e-taxi company. ZayRide broke the ice for app-based taxi-hailing businesses by providing the capital's residents with the option to call a taxi through their smartphones. It was an innovative idea then. Ride, co-founded by Samrawit Fikru as a subsidiary of Hybrid Technology, and Feres have since emerged as the top players in the lucrative industry. There are close to 40 ride-hailing platforms operating in Addis Abeba.

May

Prodigious Budget Appetite Confronts Thrifty Finance Ministers

All eyes were on federal budget hearings in May. Ahmed Shide, minister of Finance, and his deputy, Eyob Tekalign (PhD), were under pressure to tighten the federal budget in light of external loan disbursements and increasing global prices for commodities such as fuel, fertiliser, and wheat; not to mention a costly war in the north. However, the Finance ministers were met with inflated budgetary requests from federal agencies. Parliament approved the proposal for a 787 billion Br federal budget a couple of months later. It was 40pc higher than what lawmakers had approved for 2021/22 and around 16pc higher when accounting for the 122 billion Br supplementary budget approved in December 2021.

June

Bank Reserve Cut Stokes Inflationary Fears

Central Bank Governor Yinager Dessie's (PhD) decision to slash reserve requirements for commercial banks by half was a big headline in June. Yinager and his deputies decided to cut reserve requirements down to five percent of deposits in light of looming liquidity issues in the banking industry. It had barely been a year since the central bank doubled the reserve ratio to 10pc. Governor Yinager also directed banks keep liquid assets of at least 15pc of net liabilities. The dip in liquidity was evident from the last weeks of 2021. Almost all the banks saw their loan-to-deposit ratios stagnate, if not erode, in the following months.

July

Getu Gelete Snaps Up Majority Stake in Habesha Cement

Business mogul Getu Gelete's move to acquire a majority share in Habesha Cement S.C. was July's most read story. He struck a deal to acquire a 40pc stake in Habesha Cement, buying out Pretoria Portland Cement Company Ltd (PPC). The business mogul had already owned a 21pc stake in the company; the latest acquisition gave him effective control over the cement manufacturer. At the time of the acquisition, Habesha Cement had not serviced loans from the Development Bank of Ethiopia (DBE) valued at 40 million dollars. The Eastern & Southern African Trade & Development Bank (TDB) had also disbursed 80 million dollars. The loans amounted to 2.7 billion Br at the time of borrowing.

August

Gov't Introduces Social Welfare Tax as Budget Deficit Widens

The federal government thrusting a new tax on importers was the big story in August.  Dubbed “social welfare levy”, the tax applies to importers, who will pay three percent on the items they bring into the country, barring a few exemptions. Tax authorities hope to generate an additional 22 billion Br from the new tax this year. Officials said the revenues would go towards reconstructing facilities damaged by the conflict in the north, instability in other parts of the country, and gaps brought on by the COVID-19 pandemic.

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