ETHIOPIA: Recoup & more – 28th Mar 2024

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 28th of March twenty twenty-four. A quick summary of what's going down in Ethiopia.

We begin this episode with a follow-up on last week's biggest story - the Commercial Bank of Ethiopia system glitch that resulted in millions of dollars being overdrawn. On Tuesday the 26th, Abe Sano, the Bank’s President, said that the bank had managed to recover more than six hundred and fifty million birr or more than ten million US dollars. He said that the recovered amount is almost eighty percent of what was overdrawn - eight hundred million birr or a little over fourteen million US dollars. However, many sources reported throughout last week that the total amount lost due to the glitch was more than two billion birr or forty million US dollars.

The Bank’s president also said that the remaining amount that is yet to be recouped has been transferred to other banks, which the Commercial Bank has urged to freeze. He added that more than five hundred overdrawers who haven’t voluntarily returned the funds have been identified, and their identity and account details have been revealed. He warned that the Bank will allow them to return the funds until this Saturday the 30th after which it will take legal measures.

There was another news that shocked and saddened the world - the terrorist attack in Moscow, which claimed the lives of hundreds. Ethiopia condemned the attack through the Ministry of Foreign Affairs, calling it barbaric and heinous. The Ministry offered its condolences to the victims’ families and the Russian government. The Ministry also said it stands by the government and the people of the Russian Federation during this trying time.

Residents of the North Shoa zone in the Amhara region and thereabouts are telling media outlets that there has been relative calm over the past three days after the recent fighting. However, residents added that displaced persons who have crossed over to nearby districts are still at risk as fighting rages on there. However, some residents are skeptical, saying that this relative peace isn't something to be rejoicing about. Roads are closed and there's no guarantee that fighting won't resume. These skeptical residents urged the federal government to find ways to resolve disputes and see that fighting ceases permanently.

Still in the Amhara region, drivers are complaining about a severe gas shortage, especially in urban areas. In the capital Bahir Dar, where most stations are closed, drivers say they've had to line up in queues for long hours. Some drivers tired of the queues have opted to purchase gas from the black market, where prices double the rates of retail gas stations. Drivers are blaming authorities, saying that they've been unable to control illegal sales, but authorities assure them they're trying their best to address the issue.

Next up, on Tuesday the 26th, top government officials, including Prime Minister Abiy Ahmed, met at the Adwa Memorial Museum for a forum on digitalization. During the discussion, Frehiwot Tamiru, the CEO of Ethio Telecom, said that the number of telecom services users across public and private companies has reached eighty-five million. She added that internet users have jumped from seventeen million in twenty eighteen to more than forty million this year. But she wasn’t the only one with reports. Ethiopia’s Artificial Intelligence Institute Director General said that various programs are in the works in many sectors in order to fulfill the Digital Ethiopia twenty twenty-five goals. The Information Network Security Administration head said that the government is also focusing on cybersecurity.

Speaking of forums, on Monday the 25th, at a forum on green technology at the British Embassy in Addis, the manager of the state-owned corporation Ethiopian Electric Power said it is set to roll out its revised tariff policy in the third quarter of the current budget year. He said that the revising process began almost two years ago when the Ethiopian Electric Power revealed that electricity prices in Ethiopia did not reflect inflation and rising prices. He also talked about how prices are so low that they aren’t covering the costs of the corporation and aren’t allowing investors engaged in the sector to earn enough profits. He said that the new tariff policy has been drawn up in collaboration with the World Bank and a foreign consulting company. Finally, he said that the Council of Ministers still has to approve the policy, which is expected to happen in the third quarter of this year.

On that note about tariffs and payment, the deputy director of the Petroleum and Energy Authority said that it’s working on modifying the payment system for gas purchases so that solutions from all financial institutions can be used to pay for gas. The deputy director explained that there are currently only three alternatives for gas payment - Telebirr from Ethio Telecom, the digital payment solutions from the Commercial Bank of Ethiopia, and the Cooperative Bank of Oromia. He also admitted that this has brought complaints from customers who want to pay with their bank's digital payment solution. He said that the Authority had been working with various government entities to prepare a manual for payment over the past year and that the payment system for all financial institutions will be fully operational in the next two to three months. Recall that about a year ago the government made it mandatory to pay for gas digitally - no cash and no card.

Moving on, Zemen and United, two private insurance companies, have bought shares in the Ethiopian Securities Exchange, the first and only organized and regulated securities exchange set to launch services by the end of the current fiscal year. On Friday the 22nd Zemen bought twenty million birr or a little over three hundred thousand US dollars worth of shares in the Exchange, and United bought thirty million birr or over five hundred thousand US dollars on the next day. This raises the number of insurance companies that own shares in the Ethiopian Securities Exchange to three along with the state-owned Ethiopian Insurance Enterprise. A few more banks have already bought shares from the seventy-five percent the Exchange made available for purchase. Recall that the Ethiopian Investment Holdings, the country’s sovereign wealth fund, owns twenty-five percent of the exchange.

Addis Ababa's peace and security bureau announced that betting shops that have been sealed will not reopen. The bureau added that the Prime Minister's office is set to decide on the fate of betting shops outside the city. The bureau's head explained that the decision not to allow betting shops to be reopened in the city comes after discussions with the National Lottery Administration and betting companies. Explaining the reasons, she said that school-aged children frequented the shops where youths, aside from betting, loiter there and use addictive substances. There were also talks of persons dying in certain shops.

The Ethiopian Press Agency reported this week that the National ID program has launched an initiative whereby citizens can register, pay for and receive their National digital IDs in their homes or wherever they may be. Previously, EthioPost was printing the IDs and citizens had to go to an office of the enterprise in person to register and receive IDs. However, now, citizens can register online and pay through Telebirr or transfer funds via their bank.

And to close this edition, The National Rehabilitation Commission announced last week that Teshome Toga, its commissioner Ambassador, had resigned from his post due to unspecified personal reasons. He held the post for just over a year. Recall that the Commission was established in November twenty twenty-two as soon as the civil war between the federal government and the Tigray People’s Liberation Front ended. It was established to help rehabilitate ex-fighters but it has been facing challenges recently, mainly because of a shortage of funds. The Commission announced that the former deputy commissioner of the Ethiopian Investment Commission Temesgen Tilahun will replace Teshome Toga.

And that’s it for this week! Thanks for joining us!

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