ETHIOPIA: PM Congratules Trump & more – 7th Nov 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 7th of November twenty twenty-four. A quick summary of what's going down in Ethiopia.

This week, the world’s attention has turned to the US and its presidential election, which republican candidate Donald Trump won. A lot of world leaders congratulated Trump and one of the first was Ethiopia’s PM Abiy Ahmed who took to social media to express his good wishes for the president-elect, adding that he would work with Trump to strengthen relations between Ethiopia and the US as bilateral relations between the two haven’t been smooth mainly due to conflicts and human rights abuses in Ethiopia during the Biden administration.

The PM’s congratulatory remarks came just two days after he talked on the phone with Antony Blinken, the US Secretary of State, on Monday the 4th. Blinken’s spokesman said the two talked about the ongoing conflict in the Amhara region between the government and popular movement Fano, with Blinken expressing concern over growing violence in the region. His spokesman also said that the implementation of the Pretoria agreement, which ended the war between the government and the Tigray People’s Liberation Front, was also a topic. Blinken said the US will continue to support efforts to implement the agreement.

PM Abiy also met with other important figures but this time in person. He met with Julius Maada Bio, Sierra Leone’s President, on Wednesday the 6th. The PM used his social media handles once again this week to announce that the two leaders had discussed their bilateral relations.

A short while later, on the same day, PM Abiy welcomed another African leader, William Ruto, Kenya’s President. Although the official reason for his visit is to attend the World Without Hunger Conference held in Addis, Kenyan news outlets said he’s in Addis to lobby for his countryman and former Kenyan PM Raila Odinga, as he will reportedly launch a campaign to become chairman of the African Union Commission.

In other news, the International Monetary Fund (or IMF), which recently greenlit billions of dollars in loans to Ethiopia, released a report on Monday the 4th evaluating the first financing round. The IMF appreciated the government’s measure to implement a floating exchange rate regime, where the market determines foreign currency exchange rates, and urged the executive to continue working under this policy. The IMF additionally reminded the government to align further changes in the economy with the Fund’s policy and program requirements.

Recall that the IMF and the executive had agreed last month to a four-year, three-and-a-half billion US dollar financing deal.

Speaking of loans, The House of People’s Representatives approved a bill that would allow the government to sell bonds to pay back loans it took out from the Commercial Bank of Ethiopia to fund mega projects across the country. This bill will allow the government to sell bonds to cover about 850 billion birr, which is 7 billion US dollars worth of debt. The executive originally planned to pay off these loans with revenues from the mega projects but the plan is yet to materialize.

However, The House didn’t approve another bill, which promised comprehensive changes to the education sector. Among other things, the new bill would have provided incentives to investors and NGOs to engage in the education sector. The draft bill prohibited charging parents or guardians for tuition, and registration fees if the child attended a public school. All schools would have also been required to teach their students at least three languages.

On another note in its quarterly report published on Tuesday the 5th, The Ethiopian Electric Utility, a government-owned enterprise distributing electric power to consumers, said that the electric-generating enterprise Ethiopian Electric Power was not able to fulfill its current demand. The report also revealed that the infrastructure is growing old and outdated, which is why there have been power outages across the country recently. A spokesperson for the enterprise also outlined the lack of new transmission lines contributed to these problems. Additionally, theft has become another challenge affecting the service quality of the Utility.

In just this quarter, the Utility has managed to onboard almost 100,000 new subscribers, failing to hit its goal of 120,000. Despite these shortcomings, revenue has increased by a significant margin due to price increases.

Another state-owned enterprise was in the news this week. Ethiopian Airlines took delivery of Africa’s first-ever Airbus A350-one thousand on Monday the 4th. The enterprise’s officials flew to the French city of Toulouse to bring the colossal plane home. The Airline expects to bring back more of these Airbus A350s as it has over thirty orders pending with the French aircraft manufacturing giant.

From state-owned to private businesses as multinational company Unilever, which operates all over the world including in Ethiopia, announced plans to lay off a significant number of employees. The company has been present in the Ethiopian market for a long while now and since its profits have declined, it plans to reduce the number of employees to one or two in every administrative unit across the country. It seems like employees are aware of this development as sources say they are looking elsewhere for jobs. The layoffs are predicted to take place next month.

Another private business hitting the headlines is Nib Bank but instead of layoff news, this story is about an important appointment. The Bank, which has had a complicated few years, announced a new CEO in Henok Kebede. He used to serve as the CEO of Amhara Bank until he was fired upon a disagreement with the Board.

Six months ago, Nib wanted to appoint him, but the National Bank refused to approve the appointment because Amhara Bank’s letter rendered Henok unfit for the position. The National Bank eventually found that the letter was sent because of a disagreement with the board of directors of Amhara Bank. The National Bank lifted the suspension and approved the appointment a few days ago.

More news from the National Bank as it announced a directive mandating payment service providers to introduce standardized QR codes for digital payments. The payment service providers will have to start complying with this new rule by the first of December this year. The Bank explained that the QR codes that payment service providers use are currently diverse and that this initiative will foster interoperability, meaning that buyers can scan the QR code of one service provider and pay using another.

How will this work? Well, a company called EthSwitch will provide the infrastructure to implement the new directive. EthSwitch is a company that the banks collectively own and currently enables all ATM cards from all banks to be acceptable in all ATM machines.

There was another story in the tech scene as Ethio Telecom announced the rolling out of 5G internet to another important market in the country, the city of Hawassa in the Sidama region. The company’s CEO said the introduction of 5G internet to the city will support other economic sectors and alleviate network congestion. Hawassa became the seventh major city in the country to enjoy 5G connection.

Let’s end this edition with internet news. Reports have surfaced this past week indicating that Ethiopia has ranked seventh in the continent in terms of the number of social media users with almost 25 million active accounts across platforms. This rise in the number of users has been attributed to the increase in internet service providers, with Safaricom entering the Ethiopian market a few years ago. Leading the pack in the number of social media users is Nigeria, followed by Egypt and South Africa.

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

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Ciao!