By Muluken Yewondwossen
Ethiopia will get at least a fourth of its debt service for a year as per the deal that the Chinese and Ethiopian leaders agreed upon in the sideline meeting of Pretoria’s BRICS summit.
In his congratulation address, PM Abiy Ahmed hailed Ethiopia’s selection as one of the six countries to join BRICS and appreciated the Chinese leadership for the pledge to pause debt service for one year.
As the PM indicated, until a total debt restructure is emplaced, the Chinese President Xi Jinping has given a one year debt service relief, which is a great outcome for Ethiopia.
Over the past one and a half decade, China has been Ethiopia’s major source of finance through concessional and commercial loans. While the repayments have started to take shape in the past few years, the government has felt the weight of allocation of huge amounts on its budget portion for external debt service.
The growing service continues to be a thorn in the flesh for the government as the debt is paid in foreign currency, to which the country is highly in short of.
Cognizant of this, Ethiopia was a pioneer at requesting for a debt treatment under the Common Framework (CF), a framework that aimed to address the problem of unsustainable debts faced by many countries in the aftermath of the Covid19 pandemic. This agreement included all members of the G20 and the Paris Club.
Despite Ethiopia’s request being tabled in early 2021, the debt rework under CF is still under discussions with development partners to which the response is mainly expected from big financers like China.
As per the debt service information from the Ministry of Finance (MoF), Ethiopia repaid almost USD 1.245 billion to its creditors in the nine months of the 2022/23 budget year of which the principal was USD 947 million whilst the remainder was allocated to commission and interest.
As indicated by the MoF report, the debt service that was settled in the first three quarters of the past budget year that ended in June 30 was mainly channeled to Chinese financers.
In the first three quarters of the last budget year, Ethiopia’s public sector external debt service was USD 298.54 million, in total, to the Chinese financial institutions but the figure was not inclusive of payments for the government guaranteed private creditors as well as the non-government guarantees.
Of the stated service amount, USD 215.3 million was principal and the balance was commission and interest payments. Ethiopia mainly uses Exim Bank of China, Industrial and Construction Bank of China and China Development Bank as its financier. It has taken huge amounts of non-concessional loan from Chinese financial institutions including the Exim bank particularly in the second decade of the millennium.
The payment that went to China took 24 percent of the total service that was settled in the three quarters of the 2022/23 budget year.
For the coming two years, it is expected that Ethiopia will be on a high burden with regards to debt service since some other huge payments like USD one billion birr and Euro Bond repayment period is closed.
As a result, experts cite that the government has been highly demanding for a debt rework, to get some sort of relief, not only to channel the resources for other development projects, but also to ease the foreign currency shortage.
Ethiopia joins BRICS, China gives 1-year debt service relief
Wass Insurance commences share sales to bridge health insurance gap
By our staff reporter
Specialized insurers comprising individuals, medical experts and companies unite through an under formation to provide health coverage, which has become unaffordable for the general public.
Despite the insurance sector being re-liberalized in the mid 90s, the sector has highly been dominated by the nonlife insurance business which is in contrast to the insurance industry business globally.
To bridge this gap, a group of individuals and those close to the health business are under formation to develop an insurance firm called Wass Insurance.
According to the organizers, Ethiopia is one of the bottom five countries in terms of health expenditure per capita in the world.
“To change this narrative and trend, prominent health professionals are working to establish an exclusive insurance company that will support the sector and the public in general,” the organizers said.
The under formation insurance firm that secured a green light from the National Bank of Ethiopia (NBE) a year ago to offer public shares has disclosed that it has begun its share offer early this week, courtesy of a ceremony held at Inter Luxury Hotel.
According to the organizers that have 159 founding members at the current stage, the company offered 293.3 million birr in subscribed capital and is expected to commence its operations with 76.8 million birr.
Private health facilities, pharmacies and health equipment importers are part of the founding organizers.
As per the plan, the new insurance company is expected to conclude the share sales in the near future.
Our service will fully focus on health insurance coverage, which is almost nil at the moment.
“Currently, health expenses are shooting up and it is becoming unaffordable for almost everyone. The backing of the sector by health insurance it is a big relief,” experts said.
According to the under formation company, its major priority will be health insurance.
As experts opined, even through the sector has insurance companies providing life insurance, the sector is not properly promoted, “This has also resulted in lack of knowledge in the sector as well poor public awareness which direly needs to be worked on.”
“Companies like Wass are vital and timely to cut challenges on covers of health expenses, since the sector has become very expensive,” they added.
Experts said that if the health insurance registers growth, it will go hand in hand in improving health related services.
Bedele Special revamped its look
Bedele Special, Ethiopia’s leading local premium beer brand, unveiled a new label design on Thursday August 24. The new design includes a refreshed logo and more vibrant and modern colors.
Bedele Special is Heineken Ethiopia Brewery’s export standard local premium beer brand, with an alcohol content of 5.5 percent. The secret behind its unique flavor profile is two distinct hops and 100% natural ingredients. The brand is available across the nation.
We are excited to introduce our new label design for Bedele Special,” said Kassahun Feleke, Marketing Director of Heineken Ethiopia. “The new design reflects the freshness, quality, modern spirit, of Bedele Special. It is bold, stylish, and contemporary.” He also added “This label revamp represents our dedication and passion for innovation and quality in order to continue meeting the needs of our consumers and customers.”
Ashewa Technology issues lucrative short term share sales
By our staff reporter
The Addis Ababa based, emerging, home grown and ambitious technology company, Ashewa Technology Solution, announces a short term share sales window aimed at boosting its new business venture, which is said to bring in a massive revenue in the coming few years.
Daniel Bekele, CEO of Ashewa, recently disclosed that the company has targeted to boost its subscribed capital by ten folds from the current 200 million birr.
As per the plan, the short share sales window will go on for three months at a minimum share offer of 200 units at 2,500 birr each per share value.
The technology company has also offered an alternative which is the grouping of five individuals to come as a group to buy the minimum share.
Recently, the company that is well known for its ecommerce platform introduced new digital solutions that it called ‘smart solutions’.
Ashewa Smart ERP is one of the new businesses that it set to innovate and accelerate human resource and other accounting based administrations to ease companies’ businesses. The Smart Website Builder is also another notable initiative created by the company that allows interested buyers to get their own website within few hours. Such customer based software development is the other business that is offered for the market by the firm to which Daniel claimed it attracts huge demand on the market.
Currently, the company is also working with international development organizations to support small and medium businesses to promote their activity through modern digital based marketing.
