Hello, this is Addis Fortune bringing you the biggest stories of the week. Headlines include Real Estate Deal Gone Awry, Market Dynamics to Drive Monetary Decisions, Oromia Bank's Strategic Advance Yeilds Growth, Highways in Hurdles and Global Bank Ethiopia Faces Escalating Labour Dispute.

In a landmark corruption case, Abnet Gebremeskel faces charges over an allegedly “dubious real estate deal,” over a contentious 1,971Sqm plot in Qirqos District, on Africa Avenue (Bole Road). Prosecutors allege that the transfer to Mullege Plc for 83 million birr purported to have occurred at the Sheraton Addis and later authenticated, was fraudulent. American citizen, Abnet owns a 40 percent stake in Bole Towers Plc, which leased the plot, with the remaining share held by Al-Amoudi, a Saudi business tycoon. However, the prosecution contends that Abnet concealed ownership details in collusion with officials at the Land Holding & Registration Agency. Key testimonies surfaced from Jemal Ahmed, CEO of MIDROC Investment Group. Defence attorneys from 5A Legal Firm challenged the prosecution’s claim, focusing on potential procedural lapses and questioning the integrity of witness testimonies. Jemal’s credibility was questioned by the defence, especially his claim of not knowing Al-Amoudi’s non-consent. Their probing into Jemal’s role and his company's involvement in supplying construction materials adds layers of intrigue. The prosecution’s strategy hinges on linking Al-Amoudi’s part-ownership through Bole Towers Plc and a significant financial transaction from Midroc to Bole Towers, backed by CTO Teklu Hailu’s testimony that the transfers were described as an 'investment'. As the trial progressed, testimonies from landholding experts raised alarming questions about the authenticity of landholding documents and the role of the Agency.
 

The National Bank of Ethiopia is redirecting its policies towards a price-based monetary system, marking a fundamental shift from the bank's traditional methods. With ambitious targets like beefing up foreign reserves and reducing inflation, Governor Mamo Mihretu and his advisors are set to emulate global trends. They are pushing aggressively towards digitalising financial services, aiming to quadruple the value of digital transactions to a staggering 17 trillion birr. The focus is on modernising the banking industry. This digital leap could be crucial in Ethiopia's journey towards robust economic stability. Ethiopia's central bank shift signifies a deeper reliance on market forces, moving away from government-driven policies. With the reactivation of a monetary policy committee, the focus is now on market-based decision-making, particularly in price stability. A significant aspect of the policy overhaul is the introduction of open market operations. In collaboration with US-based Motran, the central bank is set to implement a Central Securities Depository system, crucial for these operations. Funded by the World Bank, the project aims to take a strategic approach to managing the economy's liquidity. The journey towards Ethiopia's monetary reform has been long, with efforts dating back nearly a quarter-century. With this latest strategy, there is an ambition for an autonomous and market-driven financial sector. Experts see this as a critical moment that requires unwavering commitment and a strategic approach to overcome historical constraints.
 

Recent financial advances reveal Oromia Bank boasting a staggering 31.7 percent growth with profits surging to 1.58 billion birr attributed to meticulous operational efficiency and a forward-looking three-year strategic plan. In an industry where escalating expenses shadow revenue growth, experts commend Oromia Bank’s balanced approach towards expansion and staffing. The Bank's emphasis on managing expenses, as articulated by Teferi Mekonnen, the president of the Bank, illustrates a prudent path in an industry often marred by costly expansions. Oromia Bank's notable 44.3 percent increase in income from primary sources, such as interest on loans, advances, and investments, signals a robust financial footing. This, coupled with significant rises in income from interest-free financing and fees, marks a promising trajectory. However, with rising operational expenses, industry experts urge vigilant expense management to sustain profitability. Despite not leading the sector, the Bank's competitive returns on assets and equity, along with a healthy loan-to-deposit ratio, indicate a solid market presence. In an industry dominated by giants like Awash and Abyssinia banks, Oromia's strategic focus on operational efficiency and market positioning is crucial.
 

The Ethiopian Roads Administration is terminating 32 road construction projects and suspending an additional 52 projects due to an array of hurdles involving security concerns, supply chain disruptions, budgetary shortfalls and surging compensation claims. The obstacles cast a shadow over the Administration's mandate of overseeing the construction and maintenance of approximately 30,000 kilo meter roads across the country. Renovations in the Kombolcha town, Amhara Regional State, which suffered severe damage from the conflict in the north were not able to commence while those in Debre Markos town faced delays due to ongoing instability. Similar projects in Shashemene town Oromia Regional State were pushed back due to heavy rainfall over the past six months. A pervasive lack of capacity in contractors, with 25 domestic and 11 foreign contractors performing at less than 50 percent of the scheduled plans was cited as another predicament. Experts call for an urgent need for strategic reevaluation, enhanced professionalism, and a holistic approach to address the issues facing Ethiopia's road infrastructure development becomes increasingly apparent. 

 

In a brewing labour dispute, tensions are on the rise as Global Bank Ethiopia executives terminate 315 employees including union leaders causing uproars amongst labour advocates. The discord revolves around the Board of Directors' decision chaired by Bikila Hurissa to outsource certain services and concerns over unmet educational qualifications. The letter dispatched to employees was penned last month and was brought to the attention of the Addis Abeba Labor & Skill Bureau, the Confederation of Ethiopian Trade Unions and Ethiopian Financial Trade Unions with efforts for mediation by labour advocates hitting a roadblock. Formerly known as Debub Global Bank, the 12-year-old financial institution has its workers, trade union leaders and management failing to see eye to eye. Union leaders are considering taking the case to court. Despite informing the bank management about the legal implications of terminating union leaders, a resolution remains elusive, according to them. The management, on the other hand, believes terminations were performance-based and part of a strategic plan to enhance the efficiency of the Bank by weeding out underperformers. As the standoff between the Global Bank of Ethiopia and labour advocates continues, the fate of the terminated employees hangs in the balance. Legal experts believe the Company is well within its rights while stressing the need to reconcile corporate decisions with workers' rights. 

that’s all for today. We’ll be back with more updates next week. 
May good luck and fortune always be with you.