High rise developers eyeing “diplomatic safe haven of Bole” bite the dust
The Addis Ababa City Construction Permit and Control Authority bans erection of high rise construction projects around Bole Wereda 3, one of the city’s diplomatic hotspots, owing to city standards as well as safety and security.
The area’s residents, majorly diplomatic representatives and senior government officials have claimed that high rise building projects may affect their residential right.
As the letter issued on July 19, and signed by Sitotaw Akale, Director General of Ababa City Construction Permit and Control Authority, reveals, starting from last year, the city administration began implementing a city standard on the aim to make the capital city suitable and attractive.
The letter further cited that the implementation process so far is fairing smoothly.
According to the writing, an additional study is currently being carried out by the city administration Plan and Development Commission to decide on a set of building height stipulations on some areas.
“In light of this, till the finalization of the study and its applicability thereof; construction on the area behind Ramada Hotel is to be suspended,” the letter that was sent to the Bole Sub City Construction Permit and Control Office read.
The letter highlighted that the area accommodates several countries’ embassies and diplomats alike. Furthermore, it stated that the current houses were constructed as per the well established urban plan and standard.
“Any new construction and those who got permit to do so, are hence suspended until further notice,” the letter cited signaling the wait for the study to come out, before any final decisions are made.
As shown, the area is one of the locations in the city that have standard houses and accommodate government and private luxury houses that makes it a preferred residency for those who come to Addis, a major diplomatic and mission hub of Africa.
Apart from the international appeal, the area boasts standard houses that are owned by the Federal Housing Corporation whose residents are key government figures.
Cognizant of the lucrative vicinity, some high rise building and apartment developers are pushing to construct huge buildings that may affect the area and city standard besides, posing potential safety and security challenges for residents, state sources who closely follow the case.
As sources inclined, the city administration is getting ready to utilize the area with a common G+2 building standards similar to that of around Old Airport, which is located on the western Addis Ababa wing, and called home by the senior diplomatic community.
The city administration has set a standard for some parts of the Old Airport area to strictly adhere to only G+2 buildings.
The direct advance (DA) taken from the central bank, National Bank of Ethiopia (NBE), by government during the financial constricting times of the 3Quarter, rose by 84 percent in contrast to what it took the whole of the 2012/22 financial year, report reveals.
The government in the perilous funding challenge of the 2022/23 budget year received 140 billion birr in DA from NBE until the end of March to ease its cash demand.
The amount that it took saw the numbers climb by 84.2 percent when compared with the total amount that it grabbed in the whole of the 2021/22 budget year.
Since mid 2019, the government that came in to power in 2018 had taken strong measures to reduce the DA, which primarily is seen as a money print that has high contribution to the galloping inflation.
However, the unexpected northern Ethiopia conflict coupled by the pressure from western partners forced the government to seek financial resources from the central bank.
In its review of the 2021/22 budget year and the national debt, the Ministry of Finance (MoF) stated at the time that the DA that the government took in the year was very high.
In the 2021/22 budget year, the DA amount stood at 76 billion birr, which was very high, compared with the preceding years and the government strategy that was emplaced late 2019.
On the annual debt analysis report that was published in August 2022, MoF had stated that the net issuance of Treasury bills and DA during the year was relatively higher than in previous years.
In the 2020/21 budget year, which was also one of the challenging years for the government to secure funds from foreign partners because of the conflict, the government overdraft from central bank hit 52.5 billion birr.
While the amount that taken in first nine months of the budget year that ended July 7, 2023 saw newer staggering levels of 140 billion birr.
According to the latest report of MoF, in the third quarter of the budget year that closed March 30, 2023, the federal government received 40 billion birr DA, which is similar amount to the second quarter, while the amount for the first was 60 billion birr.
The MoF bulletin stated that as at October 7, 2022, the total outstanding DA was at 236.5 billion birr, including 60 billion birr that was taken in the first quarter of the 2022/23 budget year which was converted into a long term bond.
“And after the conversion, a new DA was issued which amounted to 80 billion birr,” the bulletin read.
In the year under review, the direct advance (DA), a government overdraft from the central bank, has also shot up.
It can be recalled that when the 2022/23 budget proposal was tabled to parliament, the government underlined that most of the budget sources should rely on local sources as opposed to external sources.
When the northern Ethiopia conflict began in November 2020, a ripple effect in the form of pressure from foreign development partners occurred which led to suspension of financial promises. The government then was derailed and ended up taking huge amounts of DA from the central bank, particularly in the preceding and past budget year.
At the same time, in the 2022/23 budget year, the government started using the Treasury bond as an additional alternative. The introduction of the Treasury bond has the primary focus of reducing the DA and the T-bond.
As part of the new policy, the government introduced a 20 percent Treasury bond that became effective on November 1, 2022.
As per the directive ‘MFAD/TRBO/001/2022’, all banks except the Development Bank of Ethiopia (DBE), a state owned policy bank, were set to invest 20 percent in Treasury bonds for their loans and advances.
Up until the end of March, the amount received from the T-bond has reached 25.6 billion birr.
In May, Ahmed Shide, Minister of MoF, said that in order to reduce the access to direct advance, a new reform instrument had been rolled out to mobilize resources from domestic sources, “This instrument is very promising and will aid in minimizing the use of DA from the central bank.”
It is well known that following the deterioration of budgetary support from external partners in the last couple of years, the central government had resorted to alternative policies like using domestic sources to bridge its budget gap.
The treasury bonds were issued to each bank on a monthly basis having a maturity period of five years with each bond having two percentage points higher than the minimum saving deposit rate which is currently at seven percent.
When the government took a direction to pause the DA, it had been stated that using alternative sources would not have any inflationary pressure. This was then a crucial step taken to revolutionize the treasury bills so as to make it market oriented. Now the absorbed funds from the market became effective. However, it was noted that the additional pressure that correlated with the conflict forced the government to sway back to the DA which in two years has shot up alarmingly.
The state owned telecom operator, Ethio telecom, continues to fly high as profits double in the recently concluded budget year that end July 7.
As mobile money booms in the country, telebirr transactions hit astronomical heights with transactions leaping over 22 folds just in a year. The smooth sailing for the telecommunications firm during the year was welcomed by forward paving ventures with the firm unveiling116 services and products.
(Photo: Anteneh Aklilu)
The telecom operator which during the course of the year faced its first competitive experience courtesy of Safaricom embarking operations in October stated that it has surpassed revenue targets it set for the 2022/23 budget year.
The firm’s CEO, Frehiwot Tamiru, whilst giving a snapshot of the year pointed out that some hurdles were faced stemming from lack of foreign currency, service outage due to the conflict in the northern and some other parts of the country as well as through power interruptions.
Nevertheless, as the CEO indicates that did not deter the company from accomplishing significant milestones for the year.
In the budget year, the enterprise generated 75.8 billion birr in revenue, which was 101 percent of the projection, while also being 23.5 percent higher in contrast to the 61.3 billion birr of last year’s performance.
According to the telecom provider, the result was attained through expansion of its revenue sources, mainly through offering customer and institution-centered digital solutions and digital finance services beyond the basic telecom services.
The revenue share when described in terms of service types showed 43.7 percent share for mobile voice that was 51 percent in the 2021/22 budget year, 26.6 percent for data and internet and 9 percent for international business.
The remaining 6.9 percent, 4.7 percent and 7.2 percent were then contributed from value added services, devices and 7 other services respectively.
Regarding foreign currency earnings that includes services like international interconnections, roaming, infrastructure share and international remittance generated USD 164.1 million which were 107.8 percent of the target.
“This achievement is made possible due to the increase in the amount of traffic handled by all services,” the firm disclosed, citing that there was a growth of 34.5 percent in voice traffic and 94.5 percent in data traffic when compared to the previous fiscal year.
In the reporting period, the state owned telco registered 51.2 percent in Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) by increasing its revenue and instilling cost-saving practices and culture.
“The EBITDA amount has grown by 24 percent when compared to last budget year with 135 percent of the target performance being met,” the high flying firm underlined.
The enterprise had been projected to achieve a net profit margin of 22 percent, while the actual performance hit 25 percent recording a growth of 109 percent in comparison to the net profit from the previous year.
The CEO explained that in the reporting period, the enterprise profit had reached 18.8 billion birr that was almost nine billion birr a year back.
Regarding expenses, the enterprise has paid out of 82.2 billion birr for various payments in the budget year that included; 20.8 billion birr for taxes and 4.23 billion birr (USD 78.4 million) for loan payments.
The telecom operator disclosed that during the budget year, its total subscribers increased by 8 percent from the previous budget year to reach 72 million, achieving a 98 percent subscriber base target.
According to the annual report, mobile voice subscribers reached 69.5 million, while data and internet users hit 33.9 million.
As the firm disclosed, the telecom density has reached 66.8 percent.
“Among the 774 operators in the world, we are the 2nd largest in subscriber base in Africa and 21st in the world,” the CEO explained.
She said that for the year, her enterprise has introduced 116 new products and services that included; 11 international, 12 consumer, 18 fintech, 19 digital and lifestyle services. In the period under review, the enterprise products and service provided to customers reached 203 with 87 revamped business segments.
The Telebirr Boom
The mobile money platform that was introduced about two years ago by the telecom giant now boasts a 34.3 million subscriber base with a total transaction value of 679.2 billion birr that was boosted 22.6 folds in contrast to 30.3 billion birr, a year ago.
The year also saw gas fueling through the use of telebirr and other digital schemes being mandatory which was a huge boost for the platform.
(Photo: Anteneh Aklilu)
According to Firehiwot, the transaction volume for the year was 390 million, while USD 2.5 million in remittances was transferred from 45 countries.
In the year telebirr Sanduq, telebirr Mela and Endekise were launched in partnership with Dashen Bank in August 2022 to ensure access to financial services and in promotion of financial inclusion. As a result, micro loan services of over 4.1 billion birr were provided to 2.4 million customers using tele birr Mela and Endekise, while over 768,000 customers were able to save more than 3.6 billion birr using telebirr Sanduq (micro saving).
“Furthermore, in our partnership with Commercial Bank of Ethiopia (CBE), we launched additional telebirr digital financial services namely telebirr Sinq, telebirr Enderas and telebirr Adrash in June 2023. And within 13 days of the launch, micro loan services of 155.3 million birr were provided to 25,666 customers and 2,564 customers were able to save 14.2 million birr,” the CEO disclosed.
According to the firm, as part of the fuel management digitalization initiative, 1,263 gas stations have started receiving fuel payments via telebirr and with this, more than 66.5 billion birr fuel transactions (both subsidized and non-subsidized) were made through telebirr.
The Djibouti Damerjog Industrial Development Free Trade Zone (DDID FTZ) receives an injection of financial boost in the form of another accelerating fund for its multiple development projects to which also Ethiopia has eyes on investing.
The lucrative venture that is led by Djibouti’s Great Horn Investment Holding (GHIH), and newly formed Djiboutian sovereign wealth fund (SWF), has secured USD 120 million in financing from the continental trade and project financing body, the African Export-Import Bank (Afreximbank) for projects being undertaken around Damerjog area, the southern outskirt of the capital Djibouti for Damerjog Liquid Bulk Port’s (DLBP) related projects, which is part of the wider USD 4 billion project of DDID.
As the statement of the continental bank which has its based in Cairo, Egypt disclosed, the agreement came to fruition following the meeting between Afreximbank’s President, Benedict Oramah (Prof) and Ismail Omar Guelleh, President of Djibouti, at the heads of state of the African Union summit held in Nairobi.
The deal, which is Afreximbank’s first in Djibouti in collaboration with GHIH and the government, is targeted at supporting the development of a trade-enabling infrastructure to assist Djibouti in achieving its plan to become a regional trans-shipment and logistics hub.
As the document further details, the financing is part of a total facility amount of USD 155 million for work on the free trade zone.
According to the statement, the balance, USD 35 million is being financed through Banque pour le Commerce etl’IndustrieMer Rouge (BCIMR) of Djibouti.
Proceeds of the facility will be used for the completion of the Damerjog Oil Jetty, which will provide marine connectivity to the free trade zone, and for the construction of a 150,000 cubic meter first storage depot as well as for other costs related to the projects.
The project is stated as a promotive agent to intra-African trade, given that Djibouti’s economy is largely based on the provision of marine services to neighboring nations Ethiopia and Somalia, by offering them a gateway for ocean-borne freight.
As Prof. Oramah indicates, the establishment of a jetty and bulk port in the Djibouti Free Trade Zone will add significant value to Djibouti’s role as a trans-shipment hub for neighboring landlocked countries.
Commenting on the transaction, GHIH’s Chairman Aboubaker Omar Hadi stated, “We are very proud of our collaboration with Afreximbank, a dynamic African multilateral and transaction driven institution, and the continuous valuable technical support of the EPC SOMAGEC.
The DLBP project which is officially being constructed by SOMAGEC, a Moroccan firm specializing in the construction of port infrastructure, will consume USD 350 million.
Regarding the project, Omar Hadi, recently told Capital that the new facility will be able to accommodate Ethiopia’s demand for the coming years as its new facility is colossal in comparison to the Horizon Djibouti Terminal (HDT) which was established in 2003 with operations being commenced in 2005 with a capacity of 4.5 million tons per annum.
“The concepts are not even similar as the oldest oil terminal is operating in a single jetty and one terminal, whilst the new one will have different terminals, while using one jetty. Regarding capacity, the new one will have 13 million tons,” the Chairman explained.
The DLBP structure consists of an offshore jetty that is connected to onshore storage facilities. This will serve multiple end users, enabling them to load and unload a wide variety of products to and from inland storage facilities. The jetty is located around 3km from land, with a causeway that provides access for vehicles and pipeline services. It is designed for the berthing of two ships – one capable of accommodating vessels of up to 100,000 DWT and the second for vessels up to 30,000 DWT.
DDID FTZ will be Djibouti’s first heavy industrial and petrochemical base, and East Africa’s only industrial complex with a road-port-air-railway network. The new liquid bulk port will enable Djibouti to become a leading oil product trading hub for East Africa’s petrochemical sector.
The entire DDID FTZ project which is scheduled to be built in different phases in ten years time, also includes a multipurpose port, a liquefied natural gas terminal, a livestock terminal, dry docks and a ship repair yard, a power plant and a factory that will produce construction materials. The development of the complex will help Djibouti to better meet the region’s hydrocarbon needs-especially for landlocked Ethiopia.
The oil port project is financed by different foreign sources.
The Ethiopian SWF, Ethiopian Investment Holding (EIH), is also interested to take stake on the infrastructure.
Founding and former CEO of EIH Mamo Mihretu, recently told Capital that the investment holding has primary focus areas to which the logistics sector is among the priority list, “It is vital to boost regional integration with neighboring countries including Djibouti.”
“We also have an objective of insuring Ethiopia’s energy sector. Cognizant of this, we are exploring the potential of co-investing in the oil terminal in Djibouti,” the former CEO said, adding, “We are in advanced conversations with the Djibouti Port Authority.”
