Reporting the top five stories of the week, this is Miss Me'nab from Addis Fortune News.
Ethiopia’s Petroleum & Energy Authority has suspended 40 gas stations in the capital and nearby Sheger cities, attributing a failure to comply with a state-mandated digital payment system, Telebirr. Director General Saharla Abdullahi's move, threatened to disrupt the fuel supply chain in the city and its outskirts, potentially leading to a severe petroleum shortage while fueling chaos and controversies. The decision comes on the heels of a month-long audit, which unearthed that over half of the transactions at these outlets sidestepped the digital payment platform introduced just this April. However, this heavy-handed approach exposed the cracks in implementing a cohesive digital transaction system and has faced fiery backlash from gas station owners, who challenged the accuracy of the audit findings.
in another news …
The Ethiopian steel industry is cracking under the pressure of cheap imports and contraband, with 28 companies already shuttered after struggling to compete with rampant and unchecked duty-free imports, which have undercut local prices. Another 15 producers of reinforcement bars are on the brink of failure facing similar challenges, including a lack of transparency in government auctions and a preference for imports over local materials. Exports have also been lacking, with Ethiopia earning 30 million dollars from exporting metals, electric, and electronic products last year. The Ethiopian Basic Metals & Engineering Industries Association warns of a looming collapse within three months and has formed a sub-committee to conduct an in-depth survey to combat the deluge of cheap imports. However, this initiative seems like a small step against a tidal wave of challenges exacerbated by the government's role or absence.
correspondingly …
Ethiopia's Ministry of Industry has proposed a two-year industrial policy focusing on import substitution to enhance the manufacturing sector's role in the country. The policy aims to attract investors by reorganising the policy and directing significant capital allocation and seeks to achieve 60 percent of import substitution within a decade through the 'Ethiopia Tamrit' initiative. Despite expanding industrial parks, Ethiopia's manufacturing sector contributes less than six per cent to the country's GDP. The Central Bank's annual report shows manufacturing accounted for 13 percent of the country's total export revenues. The bill aims to facilitate long-term financial loans and insurance policies by forging relationships between financial institutions and factories, emphasising greater automation and research to exhaust the potential of underutilised resources.
touching on the subject of finance
The pioneer Islamic financial institution, ZamZam Bank has made a significant turnaround in its operations, revealed at a recent shareholder meeting. The Bank has netted a 24.1 million birr profit while total assets have witnessed an impressive increase of 137.3 percent to 7.49 billion birr. ZamZam has reversed its fortunes, from 145.42 million birr loss in its first year, attributed to an expansion strategy and a surge in income from financing and investment activities, reaching 337.57 million birr, up from 6.85 million birr in the previous year. The growth trajectory highlights its robust approach to market penetration and customer reach. Chairman Nasir Dino, a long-time proponent of Islamic banking in Ethiopia, assured shareholders of prospective profit-sharing in the coming years, signalling confidence in ZamZam's continued growth. However, financial analysts caution about the rising operational costs, which have tripled to 295.96 million birr and general administration expenses more than doubled to 196.71 million birr.
finally
A 30-million-dollar investment proposal to empower smallholder farmers with access and resources was submitted to the World Bank with hopes of revitalising the local horticulture market. It is part of the 300 million-dollar rural connectivity project, to enhance rural road connectivity and bridge the gap between supply and demand while addressing inflated prices through surplus production. Research by the Food & Agricultural Organisation of the United Nations (UNFAO) indicates that low productivity and post-harvest loss are the most significant challenges for the horticulture industry. If approved, the pilot program is expected to begin in the next four years. However, discussions with World Bank executives reveal that the proposal has yet to meet their standards before approval which might take up to eight months.
That’s all for today. We’ll be back with more updates next week.
May good luck and fortune always be with you.