Ethiopian Business ReviewEthiopia has been impelling for the expansion of Djiboutian ports to accommodate its mushrooming foreign trade on top of exploring alternative sea gates, including the purchase of a stake in Somalia’s Berbera port. The country is also under negotiations with Eritrea to develop the ports of Massawa and Assab. The recent establishment of a one-stop border post (OSBP) between Kenya and Ethiopia alongside the completion of the Hawassa-Moyale road project provides Ethiopia, with its heavy and increasing dependence on imports, another option with Lamu, Kenya’s second largest port after Mombasa.
Source: Mo Ibrahim Foundation, The Sustainable Development Goals Center for Africa. Sustainable Development Solutions Network
In the 2020 Africa SDG Index and Dashboards Report, most of the 17 SDG goals have witnessed serious setbacks, mainly due to COVID-19.
The slowdown of domestic economic activity translates into revenue shortfalls. The financing gap for SDGs in Africa that was already large is expected to widen, increasing the fiscal vulnerability of African governments. Without financial resources, sustainable development is elusive.
Ashenafi EndaleSince 2015, anti-government protests, conflict, and instability have been ravaging Ethiopia. Especially in the past two years, the breakdown of law and order has become the new normal. Thousands have lost their lives and in 2018, 2.3 million were internally displaced—a world record high. In fact, in the last two and a half years, excluding the latest operation in Tigrai, 113 conflicts have erupted across the country. As a result, the federal government’s expenditure to secure public order and security swelled from ETB14.2 billion in 2017/18 to a staggering ETB24.2 billion in 2019/20. Though without a known updated figure, the latest operation in Tigrai is sure to compound Ethiopia’s security bill. EBR’s Ashenafi Endale explores the direct and indirect costs of conflict and instability, as well as the overall economic losses.
Mehrteab Leul Kokeb, a leading corporate financial services Lawyer in Ethiopia, has been practicing law for nearly three decades. After earning his law degree from Addis Ababa University in 1992, he worked as a judge in the high court and also as a litigator in the early 2000s. He then partnered with DLA Piper, a London based global law firm with offices in more than 40 countries, and joined the firm’s network by founding Mehrteab Leul & Associates (MLA) Law Office, a de facto law firm advising and representing corporate clients on business and investment issues in Ethiopia. Mehrteab has also studied financial services law at the University of London.
Elias TegegnThere are seven privately- and 10 government-owned industrial parks (IPs) operating in Ethiopia. Although the government-owned ones were developed with massive finances, thus far their performance has not been satisfactory. On the other hand, companies operating inside privately-owned IPs are doing well. In fact, an increasing number of foreign investors are requesting to develop their own IPs. The government, recently decided to discontinue developing IPs and is preparing a directive to facilitate this. EBR’s Elias Tegegn explores the issue.
Despite Excess Liquidity, Banks are Disbursing Less Credit
Following the replacement of currency notes, the banking industry’s liquidity level grew six-fold compared to the previous year. Close to ETB45 billion of fresh savings entered the banking system, while 2.5 million new saving accounts were opened. Despite surplus liquidity, commercial banks are not disbursing credit as per their capacity. Some attribute this to the political violence and instability in Ethiopia in the past five years, which has diminished the appetite of credit seekers. Others claim banks are currently holding back from giving loans because economic and business activities are slowing down and default rates are increasing. EBR’s Ashenafi Endale explores.
Following the demonetization of the Birr early Septemeber this year; and the strict regulation of the financial sector, a huge sum of money circulating outside the formal banking industry is fast declining as citizens rush to open new bank accounts and change old notes with new ones.
This has increased banks liquidity by six-fold. How are the banks going to deal with this increased liquidity? Will it lead to reduced lending interest? Will it improve access to finance to cash-starving companies in the agriculture and manufacturing sectors?
EBR had an audience with Muluneh Aboyeh, vice president of risk and compliance management at the Commercial Bank of Ethiopia (CBE) to discuss about the possible impacts of excess liquidity in CBE and the banking industry at large and how they are working to utilize it.
Abiy WendifrawIn recent years, the number of people who go to gymnasiums and modern fitness facilities in Addis Ababa and other regional cities has been growing steadily. But this changed after the declaration of a state of emergency and a prohibition of sporting activities at all levels by the government in March 2020 in order to curb the spread of coronavirus. Although the prohibition was lifted and fitness centers opened their doors with all the COVID-19 prevention measures and protocols three months ago, most of the previous gym-goers didn’t return to the fitness venues. EBR’s adjunct writer Abiy Wendifraw explores.
Samuel HabtabMeron Hailu, 34, is an artist employing the unique technique of making artworks with textile materials and fibers rather than paint on canvas. She also teaches at the Ale School of Fine Arts and Design and is among a few Ethiopian artists that have mastered textile art. EBR’s Samuel Habtab visited Meron’s first solo exhibition to learn about her and textile art.
Danait KahsayFor long, Rahel Tsegaye has been troubled with the lack of studying and learning materials available for kids in the country. Although she believes quality education starts from an early age, Rahel could not find one for her babies. One day, an idea came to mind that she can prepare kids’ education tool kits. Then, Rahel, also a social entrepreneur, established Fidel Tiru, a company that produces teaching materials using illustrations and puzzles for kids aged 1-7 and kids with special needs. EBR’s Danait Kahsay explores her work.
