Ethiopia Secures Landmark Agreement for Debt Suspension and Eurobond Restructuring

Ethiopia Secures Landmark Agreement for Debt Suspension and Eurobond Restructuring In a significant move to alleviate its economic challenges, Ethiopia has secured an agreement with its bilateral creditors for a temporary suspension of debt services. This development comes as the country prepares to negotiate the restructuring of a $1 billion Eurobond due next year. Facing pressures like double-digit inflation, currency shortages, and increasing debt repayments, Ethiopia’s decision marks a crucial step towards stabilizing its economy, especially after the recent truce in the Tigray conflict. The interim debt-service suspension, achieved amidst talks with the International Monetary Fund (IMF) and under the G20’s Common Framework, is designed to give Ethiopia much-needed financial respite for 2023 and 2024. This arrangement seeks to maximize debt relief during the upcoming IMF program years while preventing a clustering of debt maturities post-program. This move not only addresses Ethiopia’s immediate financial strains but also impacts its capacity to service other external debts, including the Eurobond. China, a key member of Ethiopia’s official creditors committee, has already agreed to suspend debt payments until July 2024. Ethiopia aims for similar concessions from other creditors, a reflection of the country’s proactive approach to managing its debt burden. Initially seeking a debt restructure in early 2021 as part of the G20’s response to COVID-19, Ethiopia’s progress was hindered by its civil war. With over $28 billion in external debt as of March, the country’s financial health is a matter of concern. Since 2006, Chinese lenders have extended more than $14 billion in loans to Ethiopia, underscoring the significant role of external funding in its economy. An international group of bondholders proposed extending the maturity of the 2024 bond to 2029 or 2030, suggesting an amortizing structure to ease the repayment process. This proposal, if accepted, could further aid Ethiopia in managing its debt obligations without overwhelming its financial resources. For Ethiopia, these developments are more than just financial maneuvers. They represent a strategic effort to stabilize its economy, ensuring long-term sustainability and growth. By addressing its immediate debt challenges, Ethiopia is laying the groundwork for a more resilient and prosperous future, a crucial objective for a country emerging from the shadows of conflict and economic hardship. Tags ethiopia ethiopian news 1 COMMENT Ittu Aba Farda November 17, 2023 At 1:46 am Forget about debt suspension agreement! This is just in hot off the press! Addis/Finfine is finally taken. Who took it, Ittu? They took it! Who? They did! Who are they? Ittu, please don’t keep us in suspense. Please tell us! Jal and his bullet proof soldiers came on the west side and the immortal fighters of Fano came in on the north side. Who is the leader of the Fanos, Ittu? I wouldn’t mention his name because just thinking about mentioning his name gives me the willies. But I heard from reliable forces that he is the best war strategists in history. I negotiated and secured safe passage for Abiy and Jula. They are right here right now just chillin’ in my basement. So here I go again!! Addis/Finfine is taken!!! Addis/Finfine is taken! Addis/Finfine is taken!!!!! Hey, don’t interrupt! I am enjoying my celebratory cake!!! Forget about debt suspension agreement! This is just in hot off the press! Addis/Finfine is finally taken. Who took it, Ittu? They took it! Who? They did! Who are they? Ittu, please don’t keep us in suspense. Please tell us! Jal and his bullet proof soldiers came on the west side and the immortal fighters of Fano came in on the north side. Who is the leader of the Fanos, Ittu? I wouldn’t mention his name because just thinking about mentioning his name gives me the willies. But I heard from reliable forces that he is the best war strategists in history. I negotiated and secured safe passage for Abiy and Jula. They are right here right now just chillin’ in my basement. So here I go again!! Addis/Finfine is taken!!! Addis/Finfine is taken! Addis/Finfine is taken!!!!! Hey, don’t interrupt! I am enjoying my celebratory cake!!! Comments are closed.

Mohammed Al Amoudi’s Net Worth Surges 62% to $8.5 Billion in 30 Days

Mohammed Al Amoudi’s Net Worth Surges 62% to $8.5 Billion in 30 Days Ethiopian oil tycoon Mohammed Al Amoudi, recognized as one of Africa’s wealthiest individuals, has witnessed a substantial increase in his fortune. In just a month, his net worth skyrocketed by 61.9%, reaching $8.5 billion. This growth, tracked by Bloomberg, began in mid-October 2023 from a baseline of $5.24 billion, culminating in a $3.25 billion boost by November 14, 2023. At 77 years old, Al Amoudi oversees a diverse range of industrial assets across Sweden, Saudi Arabia, and Ethiopia. His portfolio includes significant stakes in Svenska Petroleum Exploration and Preem, Sweden’s largest oil refining company. In Ethiopia, he owns Midroc Gold, a leading mining company, and has investments in sectors like hospitality, oil, and agriculture, focusing on coffee and rice production. The notable increase in his net worth is primarily attributed to the strong performance of his industrial holdings, especially his shares in Preem. This company, a key player in the Swedish energy sector, boasts an impressive refining capacity of over 18 million cubic meters of crude oil annually. Al Amoudi’s strategic investment in Preem places him in a favorable position for continued success, with plans underway to divest his stake in the company. Key developments in October revealed that Preem AB, under Al Amoudi’s ownership, plans to reduce crude oil use at its primary refinery starting 2024. This move aligns with a revamp of a production unit and a broader commitment to produce fuels from alternative feedstocks. Despite Al Amoudi’s ongoing review of Preem, which may lead to a sale, these investment strategies remain unaffected. Preem has recently reported its most profitable quarter, particularly in the Supply and refining sector, buoyed by strong international refining margins and favorable market conditions. In line with global efforts to cut emissions, Preem, alongside Shell Plc and Neste Oyj, is set to reduce its reliance on crude oil in refining processes. The company’s Synsat unit at the Lysekil refinery, operational from mid-2024, aims to cut oil usage by up to 40% by using alternative feedstocks like used cooking oil and animal fats. Preem is also moving towards producing sustainable aviation fuel instead of renewable diesel. Beyond Preem, Al Amoudi’s investments in Ethiopia include significant gold assets like Midroc Gold and the undeveloped Okote Gold Mine. His engagement in the oil sector dates back to the 1990s with Corral Petroleum, leading to acquisitions in Swedish energy firms and control over Morocco’s largest oil refineries. Tags al amoudi

USAID Resumes Food Assistance in Ethiopia Following Significant Reforms

USAID Resumes Food Assistance in Ethiopia Following Significant Reforms In a major step towards humanitarian aid reform, the United States Agency for International Development (USAID) announced the resumption of food assistance across Ethiopia starting next month. This decision comes after months of diplomatic engagement and negotiations led to major reforms in Ethiopia’s food assistance structure. Jessica Jennings, a spokesperson for USAID, highlighted the United States’ commitment to providing life-saving aid to the most vulnerable. The reforms, which include enhanced oversight and improved beneficiary selection processes, aim to ensure that aid reaches the intended recipients, particularly those experiencing acute food insecurity. The Government of Ethiopia has agreed to operational changes to strengthen the identification and approval of beneficiaries based on vulnerability criteria. These changes are part of a one-year trial period during which USAID, along with its implementing partners, will closely monitor and evaluate the effectiveness of the reforms. Key aspects of the reform include strengthening program monitoring, reinforcing commodity tracking, and improving beneficiary registration processes. The Government of Ethiopia has also committed to providing unimpeded access for USAID and third-party monitors to review various sites across the country. This development is seen as a significant step in ensuring that U.S. humanitarian assistance is used effectively and reaches those in dire need. With a substantial number of Ethiopians requiring food assistance, these reforms are expected to facilitate the delivery of aid and ultimately save lives. Tags ethiopia ethiopia news today ethiopian news

Ethiopia’s Economic Outlook: Prime Minister’s Optimism Contrasts with Fitch Ratings’ Downgrade

Ethiopia’s Economic Outlook: Prime Minister’s Optimism Contrasts with Fitch Ratings’ Downgrade Ethiopia’s GDP Growth and Fitch Ratings’ Concerns While Ethiopian Prime Minister Abiy Ahmed (Dr.) projected a rosy picture of the nation’s economic growth in his recent parliamentary address, citing a doubling of the GDP to approximately $164 billion, a contrasting perspective emerges from Fitch Ratings. On November 2, 2023, Fitch Ratings downgraded Ethiopia’s Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) to ‘CC’ from ‘CCC-‘, raising concerns about the country’s economic vulnerabilities. Prime Minister Abiy’s Address: A Vision of Prosperity During the 4th regular meeting of the 3rd year of the House of Representatives, Prime Minister Abiy Ahmed emphasized Ethiopia’s economic achievements. He highlighted the significant rise in GDP and per capita income, positioning Ethiopia as a rapidly growing economy. The Prime Minister stressed the importance of national unity and support for the National Consultative Commission, which he believes is pivotal for the country’s progress. Fitch Ratings’ Downgrade: A Warning Sign Contrastingly, Fitch Ratings’ analysis presents a more cautionary tale. The downgrade reflects concerns over Ethiopia’s declining external liquidity and significant financing gaps, increasing the likelihood of a default event. The agency notes that Ethiopia’s already strained external liquidity is expected to worsen, with substantial sovereign external principal and interest payments due in the coming years. Key Factors Driving the Downgrade Fitch Ratings points out several key factors behind the downgrade: Ethiopia’s external imbalances have worsened, with current account deficits running high amid multiple shocks. Limited progress on the Common Framework for debt relief, with delays partly due to the Tigray conflict. Rising domestic financing costs, with the government increasingly reliant on domestic financing from the banking sector. A tight fiscal position, with low revenue collection and high spending on humanitarian and reconstruction efforts. Economic Challenges Ahead The downgrade by Fitch Ratings and the Prime Minister’s optimistic economic portrayal paints a complex picture of Ethiopia’s economy. On one hand, there’s an ambitious vision for growth and development, while on the other, there are looming challenges such as debt sustainability, strained liquidity, and inflationary pressures. Focusing on National Unity and Progressive Reforms In his address, Prime Minister Abiy called for nationwide support for the National Consultative Commission, emphasizing its crucial role in the country’s continued progress. He highlighted the need for seizing opportunities for change and reform, drawing parallels with missed opportunities in the past, such as in 1953. Tackling Educational and Health Sector Challenges Prime Minister Abiy addressed systemic issues in the education sector, stressing the need for comprehensive reforms to improve teacher capacity, education management, and infrastructure. He noted the construction of 18,000 schools in kindergartens with public participation, underlining the importance of education in national development. In higher education, the government’s approach includes accommodating students based on their 12th-grade exam scores, with provisions for those who pass compensatory exams. This strategy aims to resolve deep-rooted issues in the education system. In health, the Prime Minister acknowledged ongoing initiatives, including new hospital constructions and existing renovations. He discussed recent health challenges, such as cholera and malaria outbreaks, and the government’s efforts to mitigate these crises. Prime Minister Abiy Ahmed’s comprehensive address covered significant strides in Ethiopia’s economic, educational, and health sectors. His leadership focuses on legal solutions, prioritizing peace, addressing regional conflicts, and implementing educational and health reforms. These efforts collectively showcase Ethiopia’s path toward sustainable development, economic resilience, and national unity under Prime Minister Abiy’s guidance.

EthSwitch Unveils Game-Changing National Payment Gateway in Ethiopia

EthSwitch Unveils Game-Changing National Payment Gateway in Ethiopia Today marked a significant advancement in Ethiopia’s digital payment sector with the inauguration of the National Payment Gateway (NPG), developed by EthSwitch. The launch event, held in Addis Ababa, was attended by EthSwitch CEO Yilebes Addis, who introduced the NPG platform. This new development promises to transform the processing of online transactions nationwide. At the event, Solomon Desta, Vice President of the National Bank, praised EthSwitch for their groundbreaking work. He emphasized the NPG’s role in fostering digital financial inclusion by linking consumers, businesses, and financial institutions together. The NPG serves as a centralized digital platform, facilitating connections between merchants and various financial entities. It offers a secure interface for acquiring banks, microfinance institutions, and payment service providers to handle online transactions. This gateway enables partner entities to provide their customers with efficient and easy payment methods for e-commerce and mobile money transactions. The NPG ensures real-time verification of customer identities and payment details while confirming the availability of funds. This is a key step in expanding digital trade and commerce throughout Ethiopia. Merchants will now be able to accept a range of online payments including card, wallet, and other electronic payment forms through their banks or FINTECH providers connected to the gateway. EthSwitch’s plan is to integrate all major financial players into the NPG in the upcoming months.

Djibouti’s Space Milestone: First Satellite Launched with SpaceX

Djibouti’s Space Milestone: First Satellite Launched with SpaceX In a significant advancement for Djibouti’s space ambitions, the Republic of Djibouti successfully launched its first satellite, Djibouti 1A, as part of SpaceX’s Transporter-9 dedicated SSO rideshare mission from Vandenberg Space Force Base. This launch aligns with SpaceX’s recent Falcon 9 rocket launch for the 29th resupply mission to the International Space Station (ISS), showcasing a period of heightened space activity. Djibouti 1A was developed under a joint capacity-building program between Djibouti and the Centre Spatial Universitaire de Montpellier (CSUM). A team of Djiboutian engineers and technicians, trained in France, designed, constructed, and tested the satellite, marking a significant technological achievement for the country. In March, the satellite passed vibration tests at a joint CSUM/Latecoere facility in France, confirming its readiness for the launch. Djibouti’s Minister of Higher Education and Research, Mr. Nabil Mohamed Ahmed, highlighted the project’s success in training 10 technicians and engineers. This team was integral in all aspects of satellite design, manufacturing, and launch, contributing to the development of the necessary software. The minister emphasized the project’s objective of empowering Djiboutian students to lead in the satellite’s creation, thereby marking a technological leap for the nation. The satellite, Djibouti 1A, will play a crucial role in providing real-time data from climatological and seismic stations across Djibouti. This includes monitoring temperature, rainfall, river depth, and hydrometry. The nanosatellite will enable policymakers to access high-definition spectral information, enhancing agriculture and environmental monitoring across the country. 1 COMMENT Ittu Aba Farda November 13, 2023 At 4:33 am Congratulations to our Djiboutian brothers and sisters on this magnificent milestone and achievement! This beyond-repair Afro-centric here is madly proud of you! All the best!!! Congratulations to our Djiboutian brothers and sisters on this magnificent milestone and achievement! This beyond-repair Afro-centric here is madly proud of you! All the best!!! Comments are closed.

CBE Birr Enhances its Mobile App: A Strategic Move in Ethiopia’s Digital Payment Space

CBE Birr Enhances its Mobile App: A Strategic Move in Ethiopia’s Digital Payment Space The Commercial Bank of Ethiopia (CBE) has recently upgraded its mobile payment application, CBE Birr, marking a significant development in Ethiopia’s digital payment landscape. This enhancement is seen as a strategic response to the growing competition in the sector, particularly with TeleBirr. The updated version of CBE Birr introduces a more user-friendly interface and an expanded range of services. Users can now process payments for various services, including BeU Delivery, Ethiopian Airlines tickets, and DSTV subscriptions. This expansion transforms CBE Birr into a more versatile mobile payment solution, addressing the varied needs of its user base. CBE Birr’s integration with Ethiopian Airlines is a key feature of this upgrade, potentially increasing its appeal to frequent travelers. Moreover, the addition of services like BeU Delivery and DSTV payments indicates an effort to diversify the app’s utility, catering to the daily transactional needs of users. This upgrade comes at a time when digital transactions are becoming increasingly prevalent in Ethiopia. By broadening its service offerings, CBE Birr positions itself as a comprehensive digital payment tool, potentially increasing its market share in the face of competition from TeleBirr and other mobile payment platforms. In summary, the latest upgrade of CBE Birr represents a significant step in enhancing its service offerings and user experience. This move not only reflects the dynamic nature of Ethiopia’s digital payment industry but also highlights the evolving strategies of key players like CBE in competing and maintaining relevance in this fast-paced market.

Mobile Money Titans Clash: Safaricom’s M-PESA Hits 1.2 Million Users in Ethiopia, Challenging Telebirr’s Dominance

Mobile Money Titans Clash: Safaricom’s M-PESA Hits 1.2 Million Users in Ethiopia, Challenging Telebirr’s Dominance In the competitive landscape of Ethiopia’s mobile money market, a significant development unfolded with Safaricom’s announcement during its 2023/2024 Half Year Results. The Kenyan telecom giant has successfully registered 1.2 million customers for its M-PESA service in Ethiopia since its inception in August. M-PESA’s rollout was a strategic move by Safaricom, positioning it against Ethio Telecom’s Telebirr, the leading mobile money service in a country with over 100 million people. This expansion is part of Safaricom’s broader vision to increase financial inclusion in a country where only 35% of the population currently has access to financial services. Safaricom’s M-PESA, a mobile money service that revolutionized financial transactions in Kenya, is now making strides in Ethiopia’s burgeoning market. Since its launch, the service has seen transactions worth Ksh. 43.7 billion, and the establishment of a network comprising 23,000 agents and 12,000 merchants. This growth signals Safaricom’s commitment to fostering a cash-lite economy and enhancing financial services in Ethiopia. The CEO of Safaricom, Peter Ndegwa, underscored the company’s ambitions, emphasizing Ethiopia’s role in its growth strategy. He noted the impressive uptake of M-PESA services, comparing it favorably with Kenya’s trajectory, where similar usage levels took nearly a decade to achieve. The company’s progress is evident, with expansion to 22 cities and a customer base now standing at 4.1 million users. Safaricom has tailored its services to the Ethiopian market, offering M-PESA access through a USSD code and planning to introduce an app in multiple languages, catering to the diverse linguistic landscape of Ethiopia. This move is set against the backdrop of Ethio Telecom’s Telebirr, which dominates the market with over 50 million subscribers, highlighting the clash of these two titans in a race to dominate mobile money services in one of Africa’s most populous nations. Tags mpesa telebirr

The Benefits of the Ethiopian Stock Exchange for Small and Medium-sized Enterprises (SMEs)

The Benefits of the Ethiopian Stock Exchange for Small and Medium-sized Enterprises (SMEs) By- Henok Gidey Small and Medium-sized Enterprises (SMEs) are the backbone of many economies, including Ethiopia. They play a pivotal role in job creation, innovation, and overall economic growth. To support and empower these SMEs, the Ethiopian government has taken significant steps to encourage their participation in the Ethiopian stock exchange. This move is expected to provide a host of benefits to SMEs, enabling them to expand, access capital, and contribute more robustly to the country’s economic development. 1. Access to Capital One of the most significant advantages of SMEs listing on the Ethiopian stock exchange is access to a new source of capital. Capital is the lifeblood of business growth, and SMEs often struggle to secure sufficient funding from traditional lenders. By going public, SMEs can raise funds through the issuance of shares, which can be used for expansion, research and development, or debt repayment. 2. Visibility and Credibility Listing on a stock exchange offers SMEs visibility and credibility in the marketplace. It is a stamp of approval that can attract investors and customers alike. It demonstrates that the company adheres to regulatory standards and financial transparency, which can instill trust in potential partners, customers, and stakeholders. 3. Increased Liquidity Stock exchanges provide a platform for trading shares, which enhances liquidity for SMEs. It allows existing shareholders to sell their shares and new investors to buy in. This liquidity can be particularly valuable when existing shareholders want to cash out their investments or when companies require additional capital for growth. 4. Attracting Institutional Investors The Ethiopian stock exchange also opens the door to institutional investors such as pension funds, insurance companies, and mutual funds. These institutional investors have significant resources at their disposal and can provide SMEs with stable, long-term capital. This, in turn, can contribute to the financial stability and sustainability of SMEs. 5. Valuation and Benchmarking Being publicly listed enables SMEs to assess their value objectively. The market determines the share price, providing an independent benchmark of the company’s worth. This can be helpful for SMEs when making financial and strategic decisions. 6. Employee Incentives Stock exchange listing can also be advantageous for SMEs’ employees. It offers them the opportunity to own company shares, aligning their interests with the company’s performance. Employee stock options or equity incentives can be a powerful tool to attract and retain talent. 7. Mergers and Acquisitions Publicly listed SMEs can use their shares as currency in mergers and acquisitions. This can provide them with strategic advantages when seeking to expand through acquisitions or partnerships. Challenges and Considerations While the benefits of SMEs listing on the Ethiopian stock exchange are significant, several challenges and considerations should not be overlooked: 1. Regulatory Compliance: SMEs must adhere to strict regulatory requirements, including financial reporting and governance standards. Compliance can be resource-intensive. 2. Market Volatility: Stock markets can be volatile, and SMEs may face pressures related to stock price fluctuations and investor expectations. 3. Disclosure Requirements: Publicly listed SMEs are required to disclose financial information, which may include sensitive data that they prefer to keep confidential. 4. Initial Costs: The process of going public can be expensive, including the costs associated with an initial public offering (IPO) and ongoing listing fees. In conclusion, the Ethiopian stock exchange provides a valuable avenue for SMEs to access capital, gain visibility, and unlock a range of financial and strategic opportunities. While there are challenges to overcome, the benefits of listing on the stock exchange can be transformative for SMEs, allowing them to contribute more significantly to Ethiopia’s economic growth and development. This initiative not only supports individual businesses but also enhances the overall resilience and dynamism of the Ethiopian economy.