ETHIOPIA: Bill Allowing Foreign Banks & more – 19th Dec 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 19th of December twenty twenty-four. A quick summary of what's going down in Ethiopia.

Let’s start off with some big news from the House of People’s Representatives since on Tuesday the 17th, it passed the new banking business law that will allow foreign banks to enter the Ethiopian market. This bill was several years in the making and the House approved it with a significant majority.

However, a House member from an opposition party criticized the bill saying it will burden local private banks that aren’t ready to compete with foreign powerhouses, adding that the government hasn’t included a provision to protect local banks.

Mamo Mihretu, the governor of the National Bank, who played a significant role in the greenlighting process of the law, told members that they should not worry because his office would limit and regulate what foreign banks can and cannot do, and would ensure that local banks are protected.

Speaking of the finance sector, payment app SantimPay said in its annual report published on Monday the 16th, that it had processed over eighteen billion birr, which is almost a hundred and fifty million US dollars, in the previous fiscal year. The company’s representative also revealed that it had earned a profit of fifty-seven million birr, which is a little under half a million US dollars.

Even though the amount might not seem like a lot, the company’s reps said this is significant growth, considering that the company is a recent addition to the market — this is only its second-ever annual shareholders meeting. The company expects more revenue and profits this year because it had onboarded many new customers over the previous fiscal year.

There are some more profits in Ethiopia’s finance sector. Private bank Bunna said in its shareholders meeting held on Sunday the 15th that it made over seven hundred million birr, which is a little under six million US dollars in profits after tax.

The bank’s representatives weren't particularly upbeat about this performance as it indicated a decline from last year's numbers. They cited inflation, increased regulation, and foreign currency shortages as the reasons for lower profits.

Apart from these issues, they said the previous fiscal year was a productive year for the bank as it approved and began implementing new strategies, including on tech and risk management.

Bunna Bank is one of the older private banks with fifteen years of experience under its belt.

From profits to payments now as Ethiopian Airlines revealed on Tuesday the 17th that it has agreed to pay over four hundred thousand US dollars in fines to the US Transportation Department after using a flight code reserved for United Airlines and flying over airspace without permission. The US Federal Department of Transportation said the Airline violated US Federal Law because it flew through no-fly zones without an exemption or a permit.

Ethiopian Airlines admitted that it flew over the no-fly zones without the permit but said that it used another airline’s flight code for safety reasons and that it shouldn’t pay the fine. However, the Airline decided to pay because it wanted to resolve this on good terms.

The department said the airline must pay half the amount in the next two months and the remaining amount in a year.

On the border between Asian countries Thailand and Myanmar, young Ethiopians are held in harsh conditions working for scammers. They said that they are in camps working for eighteen hours a day, they’re being physically abused and forced to stay, and that their payments have been withheld.

Their families went to the Ministry of Foreign Affairs to urge the government to bring them back. They said illegal traffickers scammed these victims into thinking that it was a well-paying job in great conditions with great benefits, even saying that they had government approval to convince them. The families told media outlets that the executive said it had established a task force and would work with Myanmar’s government to get them out of there.

On another note, Mohammed Ali Yusuf, Djibouti’s Minister of Foreign Affairs, who’s also running for head of the African Union Commission, said on Thursday the 12th in Addis that Ethiopia is yet to respond to his government’s offer to control and administer the Tajura seaport The Minister recalled that it’s been about four months since the Djibouti government proposed this plan amid rising tensions between Ethiopia and Somalia.

Recall that we reported in previous shows that Ethiopia signed a deal with Somaliland for a sea outlet which angered Somalia because Somalia considers Somaliland its own. Djibouti wanted to take advantage of the situation by renting the Tajura port, which has failed to bring in significant revenue but now this seems unlikely because last week, Ethiopia and Somalia signed a new agreement, which could afford Ethiopia a sea outlet without escalating tensions in the region.

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We've got a follow-up story from last week. We told you that the government suspended three civil society organizations but it backtracked soon after. Well, one of them, the Center for Advancement of Rights and Democracy (or CARD) was suspended again, on Monday the 16th, only days after its initial suspension was lifted. The Authority for Civil Society Organizations suspended the CARD once again because it didn’t implement corrective measures and failed to learn from the initial suspension.

CARD denied these allegations, saying that there wasn’t enough time to even resume operations, let alone to implement corrective measures. CARD criticized both suspensions, saying they were unfair and there wasn’t any evidence to support them.

The Authority originally suspended the organization because it allegedly lacked political neutrality and was operating against national interest.

The US ambassador for global criminal justice said in Addis that she was concerned about restricting civic society organizations as well as the conflict in the Amhara and Oromia regions. She also asked the government to remove or suspend current officials implicated in human rights abuse to ensure accountability.

The federal government is expected to pass new laws in the near future. One of them is the property tax proclamation. The government has already prepared the draft, and it is open to consultation. Property owners are currently not required to pay tax on their properties but this will soon change.

However, pharmaceutical, real estate companies, and disabled persons who own property asked the government to exempt them from paying property tax. Pharmaceutical companies said exempting them from this tax will act as an incentive and can make the sector grow. Representatives from the disabled community asked for exemptions because disabled individuals needed the government's support to maintain their estates. Real estate companies, on the other hand, asked to be exempted on properties they've transferred to home buyers, citing double taxation as a concern.

And for our last story of the week, let’s talk about the National Dialogue Commission, which was established to foster a tradition of resolving disagreements peacefully at the national level. The commission opened an agenda gathering forum on Monday the 16th in Adama, a city in the Oromia region. The commission said there are over seven thousand participants from all over the region taking part in this forum.

Despite its efforts to foster open and inclusive dialogue, the commission has not escaped criticism, especially from opposition parties. They allege that the commission isn't a genuine effort to encourage discussions on important issues but rather a front the ruling party is using for its own ends.

Aaand that’s it for this week! Thank you for joining us!

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