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.
A new regulation that restricts shipments with Freight on Board invoices valued at less than 25,000 dollars by Djibouti's customs officials has importers confronted with weeks-long delays and incurring significant demurrage costs. The new policy has led to a standoff, with containers falling below this invoice threshold facing difficulties in gaining clearance. This has prompted an immediate response from the Ethiopian Customs Commission, with Commissioner Debele Kabeta, urging the facilitation of streamlined clearance procedures. The Commissioner believes the new requirement by Djibouti officials for actual price invoices brought a significant limitation. He argued the new requirement impedes the free movement of transit cargo, leading to unnecessary delays, additional costs, and severe shortages of inputs for local manufacturers. Zerihun Assefa, communications director, revealed that ongoing discussions between the two countries are taking place.
A standard for nationwide land grades and property valuations is set to be launched by the Ministry of Urban & Infrastructure, with hopes of creating complementary standards to a historically haphazard approach. If approved, real property will include land-holding titles and any land-related estate for housing, business or industry purposes that can be rented and sold in the market. Officials believe it will be a cornerstone of the property tax. Land development and administration bureaus across city administrations will be mandated to provide valuations by factoring access to infrastructure, type of material used for construction and plot size. The Addis Abeba City Administration has been applying its own land grading and property valuation scheme with a three million Birr cost, following a study by the eponymous University. Dereje Lakew, head of Legal Affairs at the Addis Abeba Land Administration Bureau, points to the need to modify the proposed national standards with the context of each city.
In the face of global and domestic headwinds, Abay Bank has shown resilience and adaptability with a substantial surge in net profits that reached 1.55 billion birr, in the 2022/23 financial year. Its focus on operational efficiency, revenue enhancement, and strategic expansion has yielded significant financial gains. Executives point towards aggressive market penetration and service diversification strategies, bringing a 66.1 percent jump in net profits, doubling not only its growth rate for the previous year but also much higher than the 26.2 percent industry average recorded for the fiscal year 2021/22. President of the Bank, Yehaula Gessese, credited the financial success to strategic efforts in improving operational efficiency. Abay Bank reported a substantial increase in interest income from loans, advances, and central bank treasury bonds, which climbed by 56.8 percent to 5.55 billion birr. However, analysts warn that the rising expenses and potential risks in the loan portfolio call for careful management and strategic oversight. The Bank's operating expenses saw a 53.9 percent increase, reaching 1.07 billion birr, mainly paid to interest on deposits and wages as well as staff benefits.
A year after the cessation of hostilities agreement was signed, Tigray Regional State is set to reopen its tourism sector within the week, following discussions with regional administration. The regional Tourism Bureau received donations of furniture and computers from the Ministry of Tourism and 4.9 million birr from the Ethiopian Heritage Preservation Authority to help restart operations. The two-year civil war brought significant blows to the economy of the region, pushing three million people into extreme poverty, with rehabilitation costs ballparked at 20 billion dollars, according to the Minister of Finance, Ahmed Shide. Data from the Tourism Ministry indicates that Ethiopia earned a little over three billion dollars between July 2022 and June 2023. The State Minister Sileshi Girma revealed that preparations to open up the sector are nearing finalisation, during a quarterly report before the Parliament.
An ambitious move to roll out a three-year health plan includes Minister Lia Tadesse targeting the rehabilitation of health facilities in regions ravaged by conflicts and wars. With an estimated budget of 16.3 billion dollars, it marks a significant move towards addressing the country's pressing health issues, including rising non-communicable diseases, injuries, and malnutrition. Over 50 percent of funding is expected to come from development partners, while the federal government treasury is to share 19 percent, and public-private partnerships are slated to cover 11 percent. At its peak, the two-year war led to the internal displacement of nearly 5.8 million people in Tigray, Amhara and Afar regional states with over 76 hospitals and thousands of health facilities destroyed. The total damage exceeds 1.4 billion dollars while the destruction has left the health system vulnerable and struggling to cope with epidemics of cholera, measles, meningitis, and acute respiratory infections.
That’s all for today. We’ll be back with some more weekly updates next week.
May good luck and fortune always be with you!