Blog – Page 196 – Ethiopian Business Review

For Addis Ababa residents, it’s not uncommon to witness leaking sewers or waste accumulating in open ditches throughout the city. While these issues contribute to poor aesthetics in the city, they also beget a number of public health concerns. Despite the strides Ethiopia has made in improving access to sanitation, the country fell short of the Millenium Development Goals (MDGs) that were set: improving access to 28Pct instead of the goal of 52Pct. To that end, the government is working to make the situation better, especially in Addis Ababa. EBR’s Meseret Mamo spoke with Addis Ababa residents about their experiences with poor sanitation and city officials to learn more about what’s being done to improve the livelihoods of those most affected by this public health matter.

Last December, the United Nations launched the latest of its annual landmark Human Development Reports. The report focuses on the nature of work: how the way we earn a living is being transformed by economic globalisation, new technologies, and innovations in social organisation. The outlook for developing countries, in particular, is decidedly mixed.

Ground tennis in Ethiopia dates back to the 1930s, when the first club was established in Addis Ababa. Since then, the sport has enjoyed a relatively loyal following, with a number of clubs and tournaments emerging throughout the country. Two years ago, however, the Addis Ababa Tennis Federation was banned from organising tournaments, following charges of human trafficking. After the ban, tennis enthusiasts say more should be done to promote the sport in the country, including increasing financial support. EBR’s Ashenafi Endale spoke with players and other stakeholders to learn more about the efforts to create a more robust tennis culture.

The story of the Laffer curve and three points about Ethiopia’s tax revenue

In economics, the Laffer curve is one possible representation of the relationship between rates of taxation and the resulting levels of government revenue. It postulates that no tax revenue will be raised at the extreme tax rates of 0Pct and 100Pct and that there must be at least one rate that maximises government taxation revenue. The curve is typically represented as a graph (see the figure on the following page), which starts at 0Pct tax with zero revenue, rises to a maximum rate of revenue at an intermediate rate of taxation, and then falls again to zero revenue at a 100Pct tax rate.

The Zoma Contemporary Art Centre has gained international notoriety for its unique design and decorations. But the construction of the facility isn’t the only thing that sets them apart from traditional art museums in Ethiopia – their desire to produce and promote environmentally friendly art is another unique trait that resonates with visitors. EBR’s Meseret Mamo visited the Centre to speak with the owners and hear what visitors think of their unique take on art creation and presentation.

Awash International And Dashen Banks’ Stiff Competition, the Defining Factors for this Year

Despite the fact that private banks are still a relatively new concept in Ethiopia, two stand tall among the nation’s 16 private banks: Awash International Bank and Dashen Bank. Both enjoy larger after-tax profits than their competitors do. According to the National Bank of Ethiopia (NBE), in the 2013/14 fiscal year alone, both banks’ collective net profits exceeded ETB1.37 billion, accounting for roughly 40Pct of the entire private banks’ after-tax profits that year. While the nature of their competition isn’t necessarily adversarial, both banks have been in stiff competition with one another in certain indicators – such as paid-up capital, total assets, and loan disbursements – in which each bank has enjoyed supremacy over the other in different years. However, the overall success of each bank obscures the reality behind the scenes: both have had their performance – and assets – adversely affected by foreign currency shortages, surging expenditures and liquidity challenges. EBR’s Fasika Tadesse explored each bank’s 2014/15 fiscal year performance – analysing the nuances of each company’s overall figures – in order to shed light on the two financial titans that have dominated Ethiopia’s private banking sector.

For years Dashen Bank has been a leader among private banks – and last year is no exception: it registered the highest after-tax profit of all private Banks, ETB729 million.
The Bank’s president, Asfaw Alemu, has only been at the helm since May 2015, but already has plans to help the Bank to further growth. Under his guidance, the Bank is in the process of reworking its organisational structure, including opening eight district offices. He says this will decentralise power and strengthen employees’ decision-making capacity.
Prior to becoming President, Asfaw served the Bank in various positions, most recently as Vice President for Operations. His rich portfolio includes services at the Development Bank of Ethiopia, Wegagen Bank and at an academic institution where he served for three years as a vice president for business and development at Unity University.

Machinery Shortages Hinder Ethiopia’s Burgeoning Construction

Despite the promising growth prospects of Ethiopia’s construction sector, a lack of construction machinery is proving to be detrimental to contractors-public and private – who rely on them to complete their projects. In fact, a study conducted by the federal government found that of the total 2,705 machineries needed for housing projects alone in the 2014/15 fiscal year, only 41Pct were available. It is a dynamic similar to other construction projects – and is an issue stakeholder are eager to fix. EBR’s Ashenafi Endale spoke with contractors, importers and government representatives to learn about the on-going shortage of construction machinery and what, if anything, can be done to address the shortfall.

Tsehay Shiferaw, President of Awash International Bank, leads the fastest growing private bank in the country. Last fiscal year, the Bank’s after-tax profit was ETB645 million, a 4.4Pct growth from the previous fiscal year net profit.
Having taken the helm in June 2011, Tsehay has set his eyes on global excellence. He hopes that Awash will become one of the top ten banks in East Africa by 2025. To that end, he is leading the Bank through the development of a succession plan that will also help the company grow, especially as it pertains to its technological capacity, overall structuring and human resource development.

Altruism or a Marketing Scheme in Disguise?

Corporate social responsibility (CSR) refers to specific altruistic acts in which companies participate in order to support a particular organisation or cause. Some say this activity is important in a country like Ethiopia, where laws state that local non-governmental organisations (NGOs) must receive the majority of their funding from local sources to participate in ‘right based development activities’. Others however, are sceptical, and caution that CSR may just be another way for companies to market their good deeds in order to attract more customers and make profits. EBR’s Meseret Mamo spoke with stakeholders to learn more about the nuances of the issue and offers this report.

Rising Urban Population Leads to Sanitation Woes

The Evolution of Work

After Controversy, Can Tennis Clubs in Addis Return their Former Glory?

What if Ethiopia is Taxing Too Much and Still Losing Revenue?

The story of the Laffer curve and three points about Ethiopia’s tax revenue

At Zoma Art Centre, Eco-Friendly Art Takes Shape

Battle of the Titans

Awash International And Dashen Banks’ Stiff Competition, the Defining Factors for this Year

‘Dashen will maintain its leading Position’

Cloud on the Horizon

Machinery Shortages Hinder Ethiopia’s Burgeoning Construction

‘The plan is to make Awash one of the top ten banks in East Africa’

Corporate Social Responsibility

Altruism or a Marketing Scheme in Disguise?