TIMESTAMP

Shareholders' Rebellion Rattles Amhara Bank(0:35)

From Bubbles to Troubles(1:47)

Addis Abeba's Land Allocation Leap Stirs Hope, Skepticism(3:05)

Awash Bank Propels to New Heights Despite Economic Headwinds(4:35)

Oil Refiners Infused in Compulsory Boost(5:56)

 

Welcome to the latest edition of Addis Fortune's Weekly Digest, where we present an engaging and comprehensive roundup of our top five stories. We cover a range of topics, including in-depth analyses of significant economic developments, trends and forecasts, insightful updates on policy, detailed reports on business and investment opportunities, and compelling stories. Addis Fortune remains your go-to source for reliable news and expert analysis.

The newly incorporated Amhara Bank is embroiled in a deepening governance crisis where some of its shareholders have launched an unprecedented rebellion against the Bank's Board, chaired by Melaku Fenta, sparking an urgent call for a regulatory investigation. The Bank's leadership is under intense scrutiny, with the integrity of its election process and board member nominations. Melaku Fenta, the board chairman with a controversial past, is at the heart of the Amhara Bank debacle. His previous conviction in a corruption case is now under the spotlight, as the National Bank of Ethiopia's regulations prohibit individuals with conviction records from leading financial institutions. Yet, Melaku's significant role in the Bank's formation and governance was accepted, for many saw his conviction as politically motivated. The controversy escalated with the sudden termination of its founding President, Henok Kebede. The move, coming amid a flurry of accusations of governance breaches and ethical violations, is seen as a drastic measure to regain control.

Ethiopia's beverage giant, Moha Softdrink Industries is facing a critical moment as it approaches the end of its franchise and distribution arrangement with the global beverage giant. For the past 27 years, the company has been bottling popular soft drinks under a license from PepsiCo. The change comes at a time of economic challenges, including a tight foreign currency squeeze that forced Moha to cease operations across its eight plants, depleting its inventory, after dispatching the last of 52,000 cases. The cascade of events leading up to this moment was marked by the retirement of Getachew Birbo, at 75, whose departure was set into motion by a letter from billionaire owner Mohammed Hussien Al-Amoudi (Sheikh), who holds the majority stake in the company. Amidst this fizzling saga, the spotlight turns to Amanuel Muhe, the new helmsman tasked with steering Moha through these troubled waters. Amanuel's appointment, recommended by Midroc CEO Jemal Ahmed, is seen as a crucial step in re-asserting management stability and renegotiating the contract with PepsiCo. The international company has yet to accept the nomination of a candidate, however. 

As the Addis Abeba City Administration greenlights an ambitious development plan that will see the rise of new commercial bank headquarters, luxury hotels, and shopping malls, the city's landscape is set for a significant change. Spearheaded by Girma Beka, the allocation of plots to 168 developers, including names like Sidama Bank and Mama’s Kitchen, marks a threefold increase from last year. It is part of the City Administration's ambitious plan to see the construction of four commercial bank headquarters, 16 five-star hotels, 46 malls and residential apartments, 15 places of faith, 26 industries, and 47 project extensions. The plan also includes provisions for seven plots earmarked to compensate farmers. Despite the apparent progress, the city's land policy has been subject to criticism from various quarters. Academics and urban planning experts frequently question these policies' effectiveness and transparency. The municipality receives an average of 700 requests for allocations annually, revealing the high demand for land in the capital. Beginning last week, developers have already begun the process of transferring land from the Land Development & Administration Bureau. The allotment terms require developers, except religious institutions, to deposit up to 20 percent of the total lease price in advance.

Navigating through global economic challenges and domestic strife, Awash Bank has outshined the banking industry’s anticipations with 6.99 billion bitt net profit, benchmarking a successful financial year. Tsehaye Shiferaw, Awash Bank’s president, credited the success to a well-executed strategy of infusing fresh capital, which has resulted in a massive 42.4 percent increase in paid-up capital. The Bank almost tripled the regulatory minimum capital of five billion Birr set by the National Bank of Ethiopia, expanding its capital base and reassuring shareholders about the growth prospect. Diverse revenue sources have played a crucial role in interest income and fees, as well as commissions, seeing significant increases while the Bank has shown its operational efficiency and expertise in capitalising on market opportunities. Its impressive 25.6 percent increase in loan disbursement, leading among its peers, illustrated Awash Bank’s promise to grow in the banking industry. As Awash Bank continues to excel, some industry observers point out areas for improvement, particularly in the digital finance landscape. While Awash is a pioneer in this field, keeping pace with digital advancements is crucial for its sustained leadership.

Despite compulsory edict, edible oil manufacturers are struggling to sustain vitamin infusions into their products before releasing them to the market. The mandatory infusion of Vitamin A and Vitamin D, essential for night vision and bone strength, was stipulated by the Ethiopian Food & Drug Authority with a yearlong transitional period, which ended in September. A warning to comply with the requirement was sent out through the Ethiopian Edible Oil Manufacturing Industries Association, urging manufacturers to obtain certification from independent laboratories before hitting the market. From a nutritionist's perspective, the infusion of minerals and vitamins in edible oil is a plausible way to expand reach. However, manufacturers who were sprung with additional production costs are choked with foreign currency shortages. The 35 oil refineries out of a 200-member Association claim to have tried reaching out to aid organisations, with hopes of getting fortified premixes that are commercially prepared. Global Alliance for Improved Nutrition, a Swiss-based foundation established in 2002, came to the rescue providing 240,000 dollars in revolving funds.

That’s all for today. We’ll be back with more updates next week. 

May good luck and fortune always be with you.