Ethiopian Business Review

Ashenafi Endale

Ashenafi Endale

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A Peek to Ethiopia's Landmark Project

Tuesday, 16 July 2019 00:00 Published in Topic

Grand Ethiopian Renaissance Dam

Eight years ago, when Ethiopia announced its bold decision to build the biggest possible dam on the Nile River, to which it contributes 86Pct of the water volume, with financing from domestic resources, the issue grabbed global headlines. Despite considerable consternation in Egypt and Sudan, the country was able to embark on the Grand Ethiopian Renaissance Dam (GERD), which will be the largest hydropower plant in Africa, and the seventh globally upon completion.

Seven years later, however, the Metal and Engineering Corporation (MetEC), the contractor for the electromechanical and hydraulic steel structure work on the project, became a focus of controversy amid allegations of delay, corruption, resource wastage and all sorts of mismanagement. The controversies have since put the GERD on the spotlight; and many even doubted the completion of the project. This was further complicated with the untimely death of Simengew Beleke (Eng.), manager of the project who was found dead of a gunshot wound on July 26, 2018, at Meskel Square, Addis Ababa.

Last year, the government cancelled all the contracts awarded to MetEC and signed contracts with five Chinese, French, and German companies to undertake the electro mechanical works. With this, the government seeks to start the project with a fresh schedule and finish the project in 2022, six years after its initially planned year of completion. However, there are still uncertainties over the finalization of the grand project. EBR’s Ashenafi Endale, who visited the game-changing power project, reports.

Islamic Banks are not Religious Banks

Tuesday, 16 July 2019 00:00 Published in Interview

Nassir Dino (PhD), associate professor of software engineering, is chairman of the organizing committee of ‘Zamzam Bank’. He is also the cofounder and president of Higher Learning Center of Excellence (HiLCoE), a specialized centre of excellence in education, research and consultancy in the field of information and communication technology (ICT). The Centre was established in 1997 and has since graduated thousands of skilled professionals.

Thirteen years ago, Nassir started to establish Zamzam, the first Islamic bank in Ethiopia. However, his effort did not bore fruit because the National Bank of Ethiopia (NBE), the financial regulatory body, denied them license to start operations in the final hours.

After 13 years of patience, however, his effort got favorable response from the administration of Prime Minister Abiy Ahmed (PhD). During the holy month of Ramadan, on May 22, Yinager Dessie (PhD), the new governor of NBE, met the founders of Zamzam; and informed them the good news. After more than a decade of stall, the Governor told them to resurrect Zamzam. On the same day, the Premiere also reaffirmed his support for the realization of the bank. This was announced in a historic speech the PM made at the grand Iftar at the Millennium Hall. For Nassir, his team and the tens of millions of Ethiopian Muslims, the ecstasy the news created was unprecedented and is still afresh.

Zamzam has already started floating shares and is set to start operations in about a year. EBR’s Ashenafi Endale discusses with the professor who also studied Islamic Banking and Islamic Insurance in London, the UK, about the prospect of the bank.

Swelling Budget Deficit

Tuesday, 16 July 2019 00:00 Published in Focus

Brews Inflation, Exacerbates Balance  of Payment Problem

The budget deficit for 2019/20 fiscal year stood at ETB97.1 billion, twice the amount registered two years ago. Despite the escalating figure, the government claims it is under control since it accounts for only three percent of the gross domestic product (GDP).

Nevertheless, experts stress that the deficit goes as high as 17Pct of the GDP when the money borrowed by public institutions is included in the equation. As the budget deficit grows, there is a fear money supply would rise, which will ultimately lead to a rise in inflation, which has already reached 15.4Pct. The consequence will further exacerbate balance of payment problem, which is already at alarming stage. EBR’s Ashenafi Endale spoke with officials and experts to shed light on the matter.