Five Big Stories Vol. 25, No. 1291

Capital Crossfire Catches Geez Bank as Promoters Bicker Over Future

INVESTMENT

Geez Bank, an under formation commercial bank, faces an uncertain future due to internal disputes and missed deadlines for meeting increased capital requirements. A power struggle between the original organizing committee and a newly formed committee has stalled progress, leading to negotiations with Lion International Bank regarding a potential share transfer. Shareholders are increasingly frustrated by the delays and are considering alternative options, including shifting to microfinance or investing in other banks. Experts offer differing opinions and the situation remains unresolved as the bank struggles to secure sufficient capital and navigate internal conflicts.

Leather Exports Face a Hard Floor as Officials Try to Patch Forex Crunch

EXPORT

The Ministry of Industry implemented minimum export prices for leather products to combat under-invoicing and increase foreign currency earnings. This surprised exporters who had already signed contracts below the new minimums, leading to concerns about contract cancellations and potential losses. While the Ministry aims to address the discrepancy between rising export volumes and stagnant revenue, critics argue the policy lacks detail, sufficient stakeholder input, and consideration for varying leather grades. The effectiveness and practicality of the new minimum pricing strategy remain uncertain, with some industry members expressing cautious optimism while others voice concerns.

Hibret Bank Names Tsigereda Tesfaye as President During Shifting Industry Dynamics

FINANCE

Hibret Bank announced Tsigereda Tesfaye as its nominated president, pending regulatory approval. With three decades of banking experience, she will become the third woman to lead a major Ethiopian bank. Her appointment follows the strong financial performance of the Bank in 2023/24, which saw growth in profits and assets. Tsigereda’s career trajectory, coupled with commentary from industry experts, points to both the struggles and opportunities for women in leadership positions within Ethiopian banking. She plans to focus on digital expansion in her new role.

Ethiopia, Djibouti Trade Blame Over Deteriorating Corridor

LOGISTICS

Ethiopia and Djibouti's vital trade corridor is facing hefty obstacles. Deteriorating road infrastructure, particularly a damaged 143km road, is causing delays and damage, with both countries blaming each other for the problem—Ethiopia for overloading trucks and Djibouti for insufficient road maintenance. Further complicating matters are bureaucratic delays, disparities in customs operating hours, and a stalled trilateral agreement with South Sudan.

Nib Bank Sees Year of Reckoning

BANKING

Nib International Bank (NIB) experienced a testing 2023/24 fiscal year, marked by declining assets and deposits, increased reliance on external borrowing, and a drop in profitability. Despite these setbacks, new leadership is implementing a strategic realignment, focusing on attracting long-term deposits, streamlining its credit portfolio, and leveraging technology to regain competitiveness. While difficulties remain, including liquidity concerns and the need to rebuild depositor confidence, NIB is undertaking measures such as capital increases and cost control to improve its financial health.