Amid Severe Challenges, Bunna Bank Delivers 930.1 Million Birr Profit and 20% Growth in Deposits

Amid Severe Challenges, Bunna Bank Delivers 930.1 Million Birr Profit and 20% Growth in Deposits In a year marked by economic hurdles, Bunna Bank S.C. has demonstrated remarkable resilience, reporting a pre-tax profit of 930.1 million birr for the fiscal year. Despite the challenges posed by high inflation, foreign exchange shortages, regulatory complexities, and regional conflicts, the bank managed to maintain a solid financial standing. Key highlights from the bank’s performance include a 20% increase in deposits, which totaled 43.87 billion birr. Of this, savings deposits contributed 2.79 billion birr, demand deposits 1.55 billion birr, time deposits 2.62 billion birr, and 307 million birr was mobilized through interest-free banking services under its “KHADIM” brand. Ambassador Alemayehu Sewagen, sharing the bank’s annual report at the shareholders’ meeting, acknowledged the difficult environment faced by the Ethiopian banking sector. However, he emphasized that Bunna Bank’s profitability and competitiveness remained strong. The bank also disbursed 4.1 billion birr in loans, bringing its total loan portfolio to 38.87 billion birr, reflecting an 11.8% growth. Despite a decline in remittances and a slowdown in export activities, Bunna Bank managed to secure 167.6 million USD in foreign exchange earnings. The bank’s total assets grew by 8.14 billion birr, reaching 54.53 billion birr, and its paid-up capital rose by 549.2 million birr, totaling 4.83 billion birr. In terms of customer engagement, the bank saw a 31.8% increase in the number of deposit account customers, now totaling over 4 million. Additionally, the installation of 200 cash payment machines across branches, hotels, and commercial service points has helped expand Bunna Bank’s digital reach. The bank’s mobile and internet banking services facilitated over 21.1 billion birr in transactions, while card payments amounted to 1.39 billion birr. Bunna Bank has also placed a strong emphasis on its strategic future, with the approval of a five-year corporate plan that includes enhanced resource mobilization, digital banking expansion, and alignment with the National Bank of Ethiopia’s risk management standards. The Chairman encouraged the Bunna Bank community to continue driving the bank’s success and thanked the National Bank of Ethiopia for its support. Serving over 14,000 shareholders and employing more than 4,100 staff members, Bunna Bank remains a key player in Ethiopia’s banking sector, offering a wide range of conventional, digital, and interest-free banking services through its 474 branches nationwide.

Ethiopian Airlines Flight to Dubai Returns Safely to Addis Ababa After Technical Issue

Ethiopian Airlines Flight to Dubai Returns Safely to Addis Ababa After Technical Issue Addis Ababa, December 14, 2024 – Ethiopian Airlines flight ET 612, en route from Addis Ababa to Dubai, experienced a technical issue approximately 30 minutes after takeoff. Following standard safety protocols, the aircraft returned to Addis Ababa and landed safely without incident. All passengers and crew were evacuated promptly and safely as a precautionary measure, adhering to the airline’s emergency procedures. No injuries were reported. Ethiopian Airlines emphasized that the safety and well-being of passengers and crew are its highest priorities. In a statement, the airline apologized for the inconvenience caused to passengers and commended the professionalism of the crew in managing the situation. The technical issue is currently under investigation to ensure future safety and reliability. Ethiopian Airlines, a member of the Star Alliance network, assured customers of its ongoing commitment to maintaining the highest standards of safety and service. Passengers scheduled to travel on ET 612 are advised to contact the airline for updates regarding rescheduling or further arrangements.

Addis Ababa Mandates Full Nighttime Lighting on Main Roads

Addis Ababa Mandates Full Nighttime Lighting on Main Roads The Addis Ababa City Administration Cabinet held its 4th regular meeting today, during which several important decisions were discussed and approved to improve services and city management. Key Resolutions: Extended Business Hours Commercial and service establishments located along main and feeder roads are now required to remain open until 9:30 p.m. to provide extended access to the community. Lighting Regulations The Cabinet has decided that lights on buildings, institutions, and both private and government offices situated along main and feeder roads must remain on at night to ensure full lighting services. Night Transport Services The city has begun introducing electric buses under a Public-Private Partnership (PPP) model. Additionally, all public and private transport services in Addis Ababa will now operate until 4:00 a.m. A timetable will be implemented for transportation in key corridor development areas to improve service delivery. Environmental Protection Initiatives A regulation aimed at preventing pollution in rivers and along riverbanks has been approved. This measure is intended to benefit public health and enhance the city’s cleanliness and appeal. Amendments to the environmental development plan, prepared by the Urban Planning and Development Office, were reviewed and approved to strengthen oversight and management of urban development activities. The Cabinet’s decisions aim to enhance public services, improve safety and environmental management, and support sustainable urban development in Addis Ababa.

The Controversial Minimum Salary Floor for Hospitality and Service Sectors Set by Addis Ababa Revenue Bureau

The Controversial Minimum Salary Floor for Hospitality and Service Sectors Set by Addis Ababa Revenue Bureau “There is a ridiculous difference between what is paid and what they say they will pay,” said the Addis Ababa Revenue Bureau in a recent statement that has stirred legal debates and ignited public discourse on wage disparity and tax collection methods in Ethiopia. In a move aimed at improving payroll tax compliance, the Addis Ababa Revenue Bureau introduced a minimum salary floor for employees in select commercial sectors, including hotels, restaurants, bars, and butcher shops. The goal was to close the gap between reported and actual wages, which, according to the Bureau, had been vastly underreported, especially in sectors where employee wages are often kept under the radar to evade tax liabilities. A Glimpse into the New Salary Floor System The Bureau has established a range of minimum wages based on employee headcounts in various industries. This move is designed to ensure that payroll taxes are accurately levied according to the number of employees in these businesses, in an effort to prevent tax evasion. Breakdown of the New System: Hotels: Between 32 and 50 employees Bar and Restaurant: 20 to 24 employees Cafeteria: 17 to 25 employees Restaurant: 17 to 22 employees Food and Butcher Shops: 28 to 48 employees Liquor and Butcher Businesses: 20 to 28 employees The rates for payroll tax collection are directly tied to the number of employees within each sector. Importantly, the minimum wage for workers outside of hospitality, security, and cleaning jobs has been set at 5,000 Birr per month. The Wage Breakdown For businesses in the selected industries, the salary structure is as follows: Butcher Shop and Liquor Business: Manager/Supervisor: 5,000 – 9,500 Birr Kasher: 5,000 – 6,000 Birr Main Chef: 5,000 – 18,000 Birr Host: 3,000 – 3,500 Birr Cleaning/Protection: 2,500 – 3,000 Birr Chief Butcher: 5,000 – 7,000 Birr Assistant Butcher: 5,000 – 5,500 Birr Butcher: 6,000 – 9,000 Birr Manager/Supervisor: 5,000 – 9,500 Birr Kasher: 5,000 – 6,000 Birr Main Chef: 5,000 – 18,000 Birr Host: 3,000 – 3,500 Birr Cleaning/Protection: 2,500 – 3,000 Birr Chief Butcher: 5,000 – 7,000 Birr Assistant Butcher: 5,000 – 5,500 Birr Butcher: 6,000 – 9,000 Birr Food, Drink, and Butchery: Manager/Supervisor: 8,000 – 13,500 Birr Kasher: 5,000 – 7,000 Birr Main Chef: 6,000 – 18,000 Birr Host: 2,500 – 4,000 Birr Cleaning/Protection: 3,000 – 4,000 Birr Manager/Supervisor: 8,000 – 13,500 Birr Kasher: 5,000 – 7,000 Birr Main Chef: 6,000 – 18,000 Birr Host: 2,500 – 4,000 Birr Cleaning/Protection: 3,000 – 4,000 Birr Restaurants, Cafeterias, Bars, and Hotels: Manager/Supervisor: 6,000 – 13,500 Birr Kasher: 5,000 – 7,000 Birr Main Chef: 5,000 – 18,000 Birr Host: 2,000 – 4,000 Birr Cleaning/Protection: 2,500 – 4,000 Birr Manager/Supervisor: 6,000 – 13,500 Birr Kasher: 5,000 – 7,000 Birr Main Chef: 5,000 – 18,000 Birr Host: 2,000 – 4,000 Birr Cleaning/Protection: 2,500 – 4,000 Birr These wage ranges aim to standardize pay across the industry while aligning with tax reporting requirements. Tax Evasion and Wage Underreporting The core issue, according to the Revenue Bureau, is that many businesses, particularly in the hospitality and service sectors, have been underreporting wages to avoid payroll taxes. Mr. Ayele, the Bureau’s Communications Director, pointed out that his office had conducted detailed research revealing significant discrepancies between what businesses claim to pay their employees and the actual wages received. “There is a ridiculous difference between what you pay and what you claim to pay,” Mr. Ayele emphasized. This system was created to curb such practices and ensure that employees are fairly compensated while businesses comply with tax regulations. However, the Bureau’s approach has raised questions about its legality and fairness, particularly in light of existing legal frameworks. The Legal Debate: Is the System Constitutional? The introduction of a minimum wage floor by the Addis Ababa Revenue Bureau has sparked legal concerns. Ato Gideon W/Yohannes, a lecturer in International Trade and Economic Law at Addis Ababa University, criticized the Bureau’s actions, calling them illegal. According to Ato Gideon, there is no legal foundation in Ethiopian law that allows the Revenue Bureau to set a minimum wage floor or determine taxable income without approval from the relevant legislative body. “The act is illegal,” Ato Gideon argued. “There is nothing in the current legal framework that empowers the Addis Ababa Revenue Bureau to set a minimum wage rate for various job categories and income types. Wages are taxable income, and the law clearly states that taxes should be levied according to legal statutes, not administrative decisions.” Ato Gideon pointed out that the Constitution mandates that taxes be levied by law, not by executive order or administrative guidance. As such, the Bureau’s decision to impose a minimum wage and collect taxes based on it without legal backing may violate both constitutional provisions and principles of taxation. The Call for Legislative Oversight While the Addis Ababa Revenue Bureau has set the new rates as a response to what it perceives as widespread tax evasion, critics argue that such significant changes to the tax system and wage structure should only be made through proper legislative processes. According to Ato Gideon, any attempt by the Bureau to manage tax collection in this manner undermines the legal and constitutional framework governing taxation in Ethiopia. This raises the question: Can the government effectively collect taxes and address wage underreporting without clear legal authority to do so? A Complex Issue The Addis Ababa Revenue Bureau’s decision to implement a minimum wage floor and link it to payroll taxes highlights a significant challenge in Ethiopia’s business environment—wage underreporting and tax evasion. While the Bureau’s intentions are rooted in ensuring fair compensation and proper tax collection, the lack of a legal foundation for these measures poses serious questions about the constitutionality and legality of such actions. As this issue unfolds, it will likely prompt further discussions on the need for comprehensive tax reform and legal clarity regarding wage regulation in Ethiopia. For now, the Revenue Bureau’s bold approach may be viewed as a necessary step to curb tax evasion, but it remains to be seen whether it will withstand legal scrutiny and legislative review. 1 COMMENT Menkir December 16, 2024 At 8:21 am Please spell the ward Cashier correct way. Cashier Not Kasher, Please spell the ward Cashier correct way. Cashier Not Kasher, Comments are closed.

Ethiopian Securities Exchange to Launch in January

Ethiopian Securities Exchange to Launch in January The Ethiopian Securities Exchange (ESX) has announced its official launch, scheduled for January 2024. According to Dr. Tilahun Ismail, the institution’s CEO, the ESX has been undertaking extensive preparatory activities over the past year to bring this initiative to fruition. Yodit Kassa, Chief Business Development Officer of the ESX, highlighted the development of a digital academy aimed at modernizing the securities industry and boosting its capacity. She emphasized that favorable investment opportunities have been created for local financial institutions, including banks and insurance companies, enabling them to strengthen their ownership in this groundbreaking market. Yodit also noted that the process of share sales, initiated with Ethiopia Telecom, will extend to other companies. Additionally, government treasury bills will be sold through the exchange. She added that efforts are underway to legally register and integrate over 400,000 shareholders in Ethiopia’s financial sector into the ESX. Dr. Tilahun further revealed plans to introduce a Sharia-compliant interest-free trading system alongside the regular trading platform. This initiative aims to ensure inclusivity and cater to diverse investor needs. The launch of the Ethiopian Securities Exchange marks a historic milestone in the country’s financial sector, laying the foundation for a more dynamic and robust capital market.

Ethiopia Startup Data Hub Launched: A Game-Changer for Startups and Investors

Ethiopia Startup Data Hub Launched: A Game-Changer for Startups and Investors A new open-access data platform has been launched in Ethiopia, offering a centralized hub for insights into the country’s startup ecosystem. Developed in partnership with the Ministry of Innovation and Technology, Systemic Innovation, GrowthAfrica, and Dealroom.co, and funded by the FCDO through The RISA Fund, this platform is designed to transform how stakeholders access and utilize ecosystem data. Transforming the Startup Landscape The platform aims to bridge information gaps and foster collaboration among key players in Ethiopia’s entrepreneurial landscape. By providing access to reliable and comprehensive data, the initiative supports decision-making, facilitates connections, and promotes growth within the ecosystem. Key Capabilities and Value: Data-Driven Decisions: The platform aggregates and verifies venture data, enabling users to make informed choices and identify growth opportunities. Global Exposure: Highlighting Ethiopia’s innovative startups, the platform serves as a springboard for international visibility, showcasing the ecosystem to global investors and partners. Ecosystem Performance Tracking: Users can benchmark progress, assess ecosystem strengths, and identify areas for improvement. Network Building: The platform facilitates connections with investors, collaborators, and key stakeholders across Africa and beyond. A Collaborative Effort The success of the platform relies on contributions from Ethiopia’s entrepreneurial community. Stakeholders are invited to enhance and refine the available data, ensuring the hub remains comprehensive and representative of the nation’s dynamic startup ecosystem. Broader Implications Such platforms are not just tools for transparency but also enablers of growth, providing a strategic edge in a competitive global market. As ecosystems in emerging markets like Ethiopia strive for recognition, centralized data hubs play a critical role in attracting investment and fostering innovation. For more details, visit the Ethiopia Startup Data Hub: Ethiopia Startup Data Hub. This development marks a notable step forward for Ethiopia’s startups, offering a structured approach to showcasing innovation and building connections on a global stage.

From ETB 2,900 to 1,500: How Lemi National Cement is Transforming Ethiopia’s Cement Market

From ETB 2,900 to 1,500: How Lemi National Cement is Transforming Ethiopia’s Cement Market When the Ethiopian government lifted the ban on foreign direct investment (FDI) in 2020, it was a clear step toward realizing its vision of industrial growth and self-reliance. This move has given a boost to the cement sector, which has become a vital part of Ethiopia’s rapid urbanization and ambitious infrastructure projects. From roads to housing and industrial parks, cement is at the heart of the country’s transformation. Yet, the journey hasn’t been without hurdles. Supply shortages, price hikes, and a heavy reliance on imports have made cement costly and out of reach for smaller projects, leaving many to wonder how long these challenges will persist. While the government continues to prioritize industrialization, the market remains concentrated in the hands of a few major players, struggling to keep up with soaring demand. “The government’s focus on industrialization, coupled with large-scale construction projects, has significantly driven up the demand for cement,” said Biru Wolde, the group CEO of East African Holdings. “This provides an excellent opportunity for manufacturers like our Lemi National Cement to grow and contribute to Ethiopia’s economic transformation.” He highlighted that the industry enjoys several competitive advantages, including Ethiopia’s abundance of raw materials, such as limestone, which enables cost-effective production. Additionally, the booming construction sector and Ethiopia’s strategic location in East Africa open doors for both domestic and export markets. However, Biru acknowledged the challenges that manufacturers face. High energy costs, inconsistent coal supply, intermittent power outages, and logistical inefficiencies remain major hurdles. Currency fluctuations and reliance on imported equipment further intensify financial pressures, demanding innovative strategies to overcome these barriers. The recent shift to a market-based foreign currency system has added another layer of complexity, impacting businesses across the board, including the cement industry. Prices and supply chains are feeling the effects, prompting the government to introduce market-based cement pricing. This move allows manufacturers to set their own distribution prices, aiming to stabilize the sector. Adding a new twist to the market, Lemi National Cement Factory, the largest cement production facility in Ethiopia, has officially entered the scene. Many are now watching closely to see how this new player will influence cement supply and pricing, with expectations that it will bring significant changes to the market dynamics. It has a daily production capacity of 10,000 tons of clinker, translating to 15,000 tons of cement per day. “Our facility is designed to meet Ethiopia’s growing demand for high-quality cement. This scale of production ensures a consistent and reliable supply, contributing significantly to our country’s and the region’s construction and infrastructure aspirations.” said Biru. Lemi National Cement is redefining the dynamics of Ethiopia’s cement market by increasing the national supply by 50%. Combined with the Dire Dawa plant, which produces 3,500 tons of clinker daily. This scale of production not only addresses current demand but also enables the factory to support Ethiopia’s ambitious infrastructure and industrialization projects. Cement production in Ethiopia remains an expensive endeavor, with manufacturers grappling with rising energy costs, unreliable coal supplies, and the burden of importing costly machinery. These challenges ripple through the market, pushing up prices and making cement less affordable for everyday construction projects. Retailers also point to ongoing supply shortages, price fluctuations, and logistical challenges as major issues impacting the cement market. “We are optimizing operations by adopting green energy through PanAfrique Green Energy, reducing reliance on coal and cutting costs,” said Biru Wolde. “This shift also aligns with our commitment to sustainability by lowering carbon emissions.” Biru noted that cement prices in Addis Ababa, previously ranging between ETB 2,000 and ETB 2,900, have now stabilized at around ETB 1,500. He attributed this change to the company’s strategy of supplying large quantities directly to retailers and implementing a post-purchase management system to ensure benefits reach consumers, fostering a fairer market. Lemi National Cement is investing in cutting-edge technology to boost productivity, reduce waste, and maintain consistent product quality. By automating processes and using advanced equipment, the factory achieves high efficiency while keeping costs in check. The company also prioritizes workforce development, ensuring skilled professionals drive operational success. This is reflected in the engineers sent to China for training before the plant became operational. “These efforts strengthen Lemi National Cement’s competitiveness, support Ethiopia’s industrial growth, and ensure the delivery of top-quality products,” he added. Economic theory suggests that when demand outpaces supply, prices naturally rise. This has been clearly evident in the Ethiopian cement market, where high demand and limited supply have driven up prices. One of the key expectations surrounding Lemi National Cement is that its entry into the market will help reduce prices by increasing supply and competition. “To bolster our capacity and contribute to Ethiopia’s future growth, we plan to add another production line with similar capacity. This expansion will double our output, enabling us to better meet the nation’s growing demands. With a strong focus on quality and innovation, this strategic move reinforces Lemi National Cement’s role as a key player in Ethiopia’s development goals,” said Biru. According to the Group CEO, Lemi National Cement is playing a crucial role in stabilizing cement prices in Ethiopia by ensuring a consistent and reliable supply of high-quality cement. “We are already seeing the positive impact, as there has been noticeable price stability recently,” he said. By maintaining a steady flow of quality cement, the company helps reduce price fluctuations, bringing more predictability to the market. 4 COMMENTS Birkneh Getaneh December 14, 2024 At 3:22 am That is a good news for the Ethiopia’s economy. That is a good news for the Ethiopia’s economy. Meseret Aregahegn December 15, 2024 At 2:47 am This astonishing information is vital for our daily life and bridges to futuristic engagement. Thank you so much, Meseret Aregahegn This astonishing information is vital for our daily life and bridges to futuristic engagement. Thank you so much, Meseret Aregahegn Ayalkibet Adem December 15, 2024 At 8:01 am A timely and meaningful contribution to our development. I hope the plant will have a positive impact on the surrounding community development which I turn will contribute for peace. Moreover, the factories sustainability will have will be manifested in everyone‘a life. Great Job! Congratulations! A timely and meaningful contribution to our development. I hope the plant will have a positive impact on the surrounding community development which I turn will contribute for peace. Moreover, the factories sustainability will have will be manifested in everyone‘a life. Great Job! Congratulations! Mohammed kieredin December 15, 2024 At 7:01 pm The demand for cement has been increasing in the country as construction has been booming everywhere. Nevertheless the recent developments in the market are very serious and acute as the price increases exponentially if not exaggeration to me! Z market niche from shareholders to agents n retailers were knitted by a thwarted games affecting the supply end thereby paving a huge void in z construction sector. There should be a good regulatory system to heal an already ailing sector meant for development. I hope the commencement of Lemi would mark a cornerstone for regulating all of these stuffs! The demand for cement has been increasing in the country as construction has been booming everywhere. Nevertheless the recent developments in the market are very serious and acute as the price increases exponentially if not exaggeration to me! Z market niche from shareholders to agents n retailers were knitted by a thwarted games affecting the supply end thereby paving a huge void in z construction sector. There should be a good regulatory system to heal an already ailing sector meant for development. I hope the commencement of Lemi would mark a cornerstone for regulating all of these stuffs! Comments are closed.

EthSwitch Plans to Launch Credit Scoring and Digital Lending System

EthSwitch Plans to Launch Credit Scoring and Digital Lending System EthSwitch S.C., Ethiopia’s national switch operator, has announced plans to launch a credit scoring and digital lending system. The announcement was made during the launch event of Arifpay 3.0. Tsedale G/Egziabher, Director of Business Analysis and Digital Transformation at EthSwitch, shared the update during a panel discussion at the event. Tsedale stated that the initiative is in its final stages, with the credit scoring model already developed. “We are nearing the completion of a solution that will significantly enhance access to credit and streamline digital lending processes,” she said. The credit scoring system aims to address Ethiopia’s lack of comprehensive credit data by providing financial institutions with tools for informed decision-making. This system will also offer fairer access to credit for borrowers, particularly small and medium enterprises (SMEs), through detailed financial profiling. The digital lending platform will complement the credit scoring system by simplifying loan applications, approvals, and disbursements through digital channels. This initiative supports EthSwitch’s mission to foster financial inclusion and technological innovation. The announcement coincided with the unveiling of Arifpay 3.0, a state-of-the-art digital payment platform introduced by Arifpay Financial Technologies S.C. The platform includes three transformative tools: Arif QR, the Arif Merchant App, and the Arif Terminal Management System (TMS).

Ethiopian Transit Clearinghouse Launches at Berbera Port, Enhancing Somaliland-Ethiopia Trade Relations

Ethiopian Transit Clearinghouse Launches at Berbera Port, Enhancing Somaliland-Ethiopia Trade Relations Today, the Ministry of Finance and Development of Somaliland announced the inauguration of the Ethiopian Transit Clearinghouse at Berbera Port, marking a significant milestone in the economic partnership between Somaliland and Ethiopia. Abdiresheed Ibrahim, Director General of the Somaliland Ministry of Trade and Tourism, emphasized the importance of this development. “This is a big milestone in elevating the trade and investment ties between our two countries,” he stated. “This agreement demonstrates Somaliland’s commitment to strengthening regional and economic partnerships.” The new clearinghouse is tasked with managing the transportation of cargo unloaded at Berbera Port to various destinations across Ethiopia, thereby streamlining logistics and enhancing trade efficiency between the two nations. Ethiopian National Television reported that Spachi Watanvarachi, Chief Executive Officer of DP World Berbera— the company managing the port from the United Arab Emirates—was present at the official launch. Watanvarachi highlighted the clearinghouse’s role, saying, “This office is responsible for the transport of various cargoes unloaded at the port to Ethiopia.” Adding to the significance of the event, Somaliland Finance and Development Minister Dr. Saad remarked, “Ethiopia and Somaliland have a strong relationship. Ethiopia, with its population of 120 million, can utilize alternative ports, which will further strengthen our economic collaboration.” This initiative underscores Somaliland’s dedication to enhancing regional connectivity and economic growth, fostering a mutually beneficial relationship with Ethiopia. By facilitating smoother trade operations, the Ethiopian Transit Clearinghouse is set to play a pivotal role in boosting commerce and investment between the two countries.