On 20 January 2023, Prime Minister Abiy Ahmed made changes to his cabinet and other appointments. The PM announced the nomination of new ministers, including the Ministry of Transport and Logistics, Ministry of Mines and Petroleum, and Ministry of Agriculture. The PM has also appointed new central bank governor.

New appointments are common in political life, and as usual people are discussing the reasons behind the new appointments. Is the major reason of appointment a result of the desire to change economic policy? Is it related to a search for “able, creative, and experienced people” who can manage the bureaucracy. Is it related to a search for loyalty? Whatever the reasons, quality matters for government performance.

It is said that merger and acquisition (M&A) is one of the two ways of corporate growth, the other being organic growth by increasing capital from internal sources. However, a good number of the banks in Ethiopia have opted for organic growth through rights issues, most of them resolving to increase their capitals by three to four folds to be implemented in the coming years. Quite invariably these capital increase resolutions rely on capitalizing dividends the companies expect to earn in the years to come – a rather slow process. Apparently, there is a clear lack of innovation in raising capital. The institutions are not the only ones to blame, however. Unfortunately, the banking (and insurance) regulation  does not innovate. For instance, it outlaws the creation of varied classes of shares. One can issue only common shares in Ethiopian financial institutions.

The past year has been challenging for Africa. After a hopeful 2021, during which the continent-wide GDP increased by nearly 7Pct and every region experienced real growth, the economy slowed in 2022 amid rising inflation, monetary tightening, and geopolitical tensions. But it was also a year when African countries were finally able to make their voices heard on the global stage. At the start of another critical year, with the continent’s GDP projected to increase at a relatively modest pace of 4.1Pct, governments can take several steps to boost economic activity and ensure a sustainable future.

Last November was an extraordinary month. Global leaders gathered for four major meetings: the Association of Southeast Asian Nations (ASEAN) meeting in Cambodia, the G20 summit in Indonesia, the Asia-Pacific Economic Cooperation (APEC) forum in Thailand, and the United Nations Climate Change Conference (COP27) in Egypt. What was striking wasn’t the timing of the meetings, but rather the evidence they produced that the tide might be turning away from confrontation toward renewed cooperation in the international arena.

Especially Under the New Commercial Code

In the period between the beginning of October and the end of December most publicly held companies convene their general meetings. This includes firms in the financial sector, whose high-profile assemblies are often newsworthy.  Therefore, this is high time to talk about shareholder meetings and their relevance apart from fulfilling legal requirements.

It is often said that shareholder meetings are simply a formality. They have no real power except rubber-stamping the proposals of the board of directors. Whatever decisions are made at shareholders’ general meetings are made because the board wants them to be. If at all, the instances where shareholder meetings opted out of board proposals are few and far between. This is because, under the law, only the board of directors can prepare the agenda of the general meeting, and the meeting cannot discuss matters which are not on the agenda. But both by law and practice, the board prepares not only the agenda but also the proposed resolutions for approval. In effect, it is not just the agenda that the board presents to the meeting; it includes detailed proposals along with each agenda item.

The Future of Ethiopia’s Economy at Stake

Ethiopia has been seen as one of the last frontiers of untapped growth in Africa. When the federal government decided a couple of years ago to liberalize the telecom sector and put an end to the 125-year-long monopoly held by Ethiotelecom, investors welcomed the news, and citizens for their part leaped for joy. The jubilation was understandable as the quality of the service delivered by Ethio telecom had been substandard, to say the least, and was the main cause, among others, for Ethiopia to be left at the station rather than being onboard the digital economy train.