Implementation of the Pretoria Agreement & more – 7th Dec 2023

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

The African Union’s Peace and Security Council revealed on Friday the 1st of December that the federal government and the Tigray People’s Liberation Front (or TPLF) agreed to meet within the next two months to resolve problems arising from the Pretoria Agreement. Recall that this settlement was signed in November twenty twenty-two and put an end to the war between the TPLF and the federal government. The Council added that aside from political discussions, both parties have expressed to the Council their commitment to accelerate the disarmament of fighters and the rehabilitation of ex-combatants. The Council also announced that the agreement’s Monitoring, Verification and Compliance Mission operation has been extended for another year and will run until December twenty twenty-four, adding that the African Union has granted one million US dollars for the mission’s operation.

Moving on, The United Nations Office for the Coordination of Humanitarian Affairs revealed that the trials to deliver medicine with drones to rural areas of the country that don’t have accessible roads have been successful. The office said that there were forty-four deliveries that carried about seven thousand medicines for tetanus, lung and liver diseases to these hard-to-access parts of Ethiopia. Various humanitarian organizations collaborated to provide the drones and the medicines. The gadgets are capable of flying a hundred and twenty kilometers (almost seventy-five miles) and carrying three kilograms (about six pounds.)

In other news… Some leaders of the opposition party Ethiopian Citizens for Social Justice resigned from the party. Three members have left in the past week. Recall that back in May, numerous senior members of the party also decided to resign. Many of the members cite that the party has lost track of its aim. They said that the executive is using the members that the incumbent government has appointed, including Berhanu Nega, the head of the party and Minister of Education, as a weapon to temper the opposition.

Speaking of resigning, The National Electoral Board is without a head after former chairwoman Birtukan Mideksa left this past July. The government has been working hard trying to find a replacement for Birtukan. Recently, Prime Minister Abiy Ahmed put together a recruitment committee of eight people. After issuing a call to the public and receiving fifty-six proposals, the committee nominated just two individuals. They both have extensive experience and have worked on the board before. Their names will be submitted to PM Abiy, who will then select one of them as his nominee. Then the parliament will decide if they approve his nomination. If the legislative gives the green light, the nominee will be sworn in as the next chairperson of the electoral board.

Next up, Mamo Mihretu, the National Bank’s governor, sat before the House of People’s Representatives Budget and Finance Affairs Standing Committee to talk about this fiscal year’s first quarter report and plans for the rest of the year. He said that there are plans to bring down the discrepancy between the banks’ and black market’s conversion rates of foreign currencies, which currently stands at ninety-five percent. When the members of the committee asked him how the bank would do this, the governor said that he could not reveal that information now because it would lead to unwarranted speculation. Currently, if you bring one US dollar to any private bank, you’ll get fifty-five birr, whereas in the parallel market, you’ll get double— a hundred and ten birr.

The governor also talked about how the National Bank will stop regulating the insurance industry. There will be a new regulatory entity that will be in charge of supervising the insurance industry The government drafted a bill for this purpose, which will be presented to the Council of Ministers.If the Councill passes the draft law, then it will be referred to the House of People’s Representatives. Its members will vote on the bill and if it gets more yeses than noes it will become a law, establishing the regulating entity.

Still on banks… The Jimma University’s Manufacturing and Maintenance Enterprise sued the Oromia Bank and the Bank’s board of directors election committee on Tuesday, the 5th. According to the Enterprise, even though the Maintenance Enterprise is an influential shareholder, the bank disregarded its nominations for the board of directors election set for this Saturday the 9th. The Enterprise also said that the announced nominees have already been elected twice and that members can’t run for a third term as it is against the law. The Enterprise asked the court to let its nominees run for the board director position, cancel the upcoming election for the board of directors, and keep the nomination process open for about a month.

Ahadu, one of the newest private banks, held its second ordinary general meeting this week and told its shareholders that it has lost more than two hundred and fifty million birr or about four and a half million US dollars. The bank’s leadership attributed the loss to the high costs of being a newcomer in the banking business, explaining that such losses are natural and predictable. The chairman of the board of directors said that aside from high costs, broader macroeconomic and political instability contributed to the loss. The bank’s president told media outlets that even though the past fiscal year ended with a loss, the company turned over a profit for the first quarter of this fiscal year. He also said that the bank expects to make between 250 and 300 million birr or 4.5 to 5.5 million US dollars by the end of the current fiscal year.

On a related note, many banks have asked the National Bank to be allowed to lend at a higher rate than the interest rate set by the National Bank, which is fourteen percent. Previously, banks were allowed to lend at rates as high as nineteen percent, but the National Bank, seeing that this has contributed significantly to inflation, set a cap on interest rates. But because these new banks haven’t gained a foothold in the industry, they’re saying that they should be allowed to lend at higher interest rates, at least until they’re on par with the more seasoned banks.

From local banks to the World Bank as two top executives will go to Addis on Thursday the 7th. Anna Bjerde, the Bank’s Managing Director of Operations, and Victoria Kwakwa, the Vice President for Eastern and Southern Africa, will head to Addis in a bid to strengthen relations between the Bank and the Ethiopian government as well as to enhance the support that the bank provides to Ethiopia. The bank said that the two executives will meet with top government officials and visit an Urban Productive Safety Net and Jobs Project site.

And to wrap up this edition, Amea Power, Ethiopia’s Ministry of Finance and Dubai-based developer, penned an agreement on Sunday the 3rd to build the largest wind farm in the Horn of Africa capable of generating three hundred megawatts of electricity. The project has been dubbed the Aysha Wind Power Project and the wind farm will be built in the Somali region, costing more than thirty billion birr, around six hundred million US dollars. Ethiopian Investment Holdings, a government entity with numerous profit-making government enterprises under it, has also signed the agreement as a co-investor. The project is expected to create about two thousand jobs.

Aaaand that’s it for this week. Do you ever wonder who these Rorshok people are and why they care about what is going on in Ethiopia? If so, head over to our website to find out more about us and the other things that we do! You can read all about the organization, other projects we are carrying out, and the other podcasts we do. If something catches your eye, or you have any questions, please reach out. You can find all the contact information and the website link in the show notes.

Ciao!