Safaricom Ethiopia said it is participating in the consultation process with the national bank in amending the financial proclamation.The company has said it is ready to launch its operation in August, after four months delay in its agreement with the government and plans to reach the expected plan until April 2023.
Recently, the new telecommunications entrant announced that it has started to purchase equipment to operate M-pesa in Ethiopia, and owing to the fact of the country’s financial law not allowing foreign companies to participate in the financial sector, the company is awaiting for the national bank to amend the law.
“A couple of months ago, the national bank started the consultation process to amend the proclamation. We are participating in the consultation process to suggest what exactly is needed to be changed to allow foreign investors, into the market,” said Matthew Harrison-Harvey, Chief External Affairs and Regulatory Officer on Thursday, July 7, 2022 on a press briefing, adding that he expects the proclamation to be amended soon.
The company has said there will be a phased launch of its network and services that will commence from August 2022, switching on the network in 25 cities across the country when ready by April 2023, starting with Dire Dawa as it is conducting rigorous tests to ensure the provision of quality services.
Based on the agreement with the government and its license operation, the new telecommunications entrant was supposed to start after nine months following its license award which was supposed to be in early April, , but that had faced setbacks.
“Currently, we are in a testing period to ensure that when we switch on, we will deliver a quality experience for Ethiopians. We are working to fulfill our commitment to building the longterm foundations for our contribution to Ethiopia’s digital transformation and inclusion objectives to transform lives for a digital future,” stated Matthew Harrison-Harvey, adding, “Dire Dawa is chosen because of the network quality.”
The company has so far invested 1 billion dollars including the license fee to the government of Ethiopia. Also Safaricom has signed infrastructure and interconnectivity agreement with Ethio telecom.
The agreement is said to last for 10 years on infrastructure sharing and interconnection. Severe disagreements had earlier arisen between the two companies regarding the price and currency of payment and under this agreement, the payment will be in both currencies, with varying ratios across the infrastructure type.
“Both agreements are really important because even though we are building our own network towers and transmissions at the same time in line with that it make sense to share infrastructure rather than to build two in the same area,” said Matthew, adding, “This will enable the company to have options and redundancy indicating that the agreement is now under implementation.”
The agreement in principle with Ethio telecom was announced in April barely a month after the telecom operator signed an infrastructure-sharing agreement with the state-owned Ethiopian Electric Utility (EEU) to deploy its aerial fibers.
Safaricom Ethiopia liaises with NBE to amend financial proclamation
Oromia bank scoops international award
Oromia bank receives a Quality Choice Award of 2022 from the European Society for Quality Research (ESQR) in Barcelona, Spain. This international quality award is unique as it is the first international Quality award in the history of the Bank.
ESQR has been giving such an award to internationally renowned organizations, universities, banks, and others amongst which is the African biggest airline, Ethiopian Airlines.
The award ceremony was held in Barcelona at the Marriott Hotel on July 3 and 4, 2022 with the attendance of representatives from 35 countries and 43 award-winning companies. Teferi Mekonnen, president of the bank received the award on behalf of the financial firm.
IS THIS IT?
This column is known for incessantly ranting about global economic imbalances, which have efficaciously led to extreme polarization between and within countries. In addition, this global economic regime systemically promotes destructive exploitative patterns in the realm of the natural. For example, June 2022 was the hottest month on record, globally, etc., etc.! Aspects of these gross imbalances were manifested in a mild global crisis, euphemistically called; ‘the financial crisis’ of 2007. Since then, instead of trying to solve the protracted problems of the world system, the useless palliative ‘kicking the can down’, was perniciously employed. But the can has now hit a massive boulder. Moreover, the can itself, from rolling down for quite a while, has accumulated too much dirt/mud and has become too heavy to roll. Is this it?
Stocks are crashing around the world. China is changing; it has allowed the Renminbi to be more flexible. The Chinese stock market has also gone down by almost 30% since its recent peak. China is now the largest importer as well as exporter of commodities and goods, respectively. When exports decline imports follow. Today they are having difficulties serving their debts. Their currencies relative to the dollar are going down south, very rapidly. Currently emerging countries in South America and Asia are facing another debt crisis not very different from the early 1980s and late 1990s!
Debt is another of the major structural weaknesses of the current global system. Today no economy grows without accruing massive debt, in one form or another. Capital formation not coming from savings will ultimately prove worse than phony. Credit fuelled activities only encourage mal-investments across the world, not excluding the very poor countries like Ethiopia! The problem with debt is; when economic growth stagnates or even declines, the already incurred debt remains the same, exasperating existing payment difficulties. The other side of the debt coin is; the indebted cannot continue their usual shopping sprees! When consumption declines in the rich countries, economic decline follows, it comes with the territory. By extension, demand for commodities that go into the making of stuff will also decline; this is the vicious circle that is currently afflicting the unquestioned dogma of the perpetual growth model of the modern world system.
The culprit behind almost all the malaise of the global economic system is ‘fractional reserve banking.’ This is a system where banks perpetually create debt via credit (phony money), not only to make the usual ‘run-of-the-mill’ profit, but also to confiscate real wealth from the unsuspecting sheeple, including entrepreneurs! The more banks in an economy, the more the created debt (via credit), and the more the mal-investment. In the current system, unless banks create debt, they cannot exist, let alone make profit. Another consequence of this banking regime is; it abolishes the important concept of ‘price discovery’! Because of rampant money creation (out of thin air, via credit and ultimately debt) the value of goods/services become illusionary. Prudent money cannot exist in such an economic scenario. The whole world now operates in a fictitious money regime. Money created out of thin air abuses earned wealth and discourages honest economic activities!
Prudent money can come about only when banks lend money from their deposits. In this case, prices are solid, i.e., they are one and the same with clearing prices. Moreover, entrepreneurs are on solid ground and can operate rationally and logically. In our fictitious world of ‘fractional reserve banking’, a company’s share price or price to earning ration (P/E) can jump up and down by an astonishing percent, within hours and for no logical or rational reason. This happens because there is no prudent money in circulation and there is no real price discovery. Everything is speculation with phony money, mostly accessed by those connected to the financial spigot, compliment of crony capitalism! Unfortunately, situation also obtains in the poorer countries of the world, like ours. ‘The job of finance is to provide capital to companies. We do it to the tune of USD 250 billion a year in IPOs (initial public offering) and secondary offerings. What else do we do? We encourage investors to trade about USD 32 trillion a year (twice the GDP of USA). So the way I calculate it, 99% of what we do in this industry is people trading with one another, with a gain only to the middlemen. It is a waste of resources.’ John Bogle, founder of ‘the Vanguard Fund’!
Cooperative Bank of Oromia registers high earnings
Cooperative Bank of Oromia has announced it has registered 3.95 billion birr in profit before depreciation and provision during the 2021/22 fiscal year which is a 65.1 percent increase from last year.
The bank has distributed 84.26 billion birr in loans growing 52 percent from the previous year. In the fiscal year, through its interest free banking services the bank has mobilized 4 billion birr reaching the total to 16 billion birr, which is almost 20 percent of the total loan.
The bank’s total asset grew to 114.36 billion birr which is an increase of 40 percent. The total capital of the bank as well surpassed 12.28 billion birr with a paid-up capital 7.73 billion birr exhibiting 66 percent increase from last year.
During the 2021/22 fiscal year, the total number of its customers has reached 9 million which puts the bank as one of the leaders from the private banks. The total saving/ asset of the bank reached 96.77 billion birr showing a 36 percent increase from the previous year.
The bank earned USD 437.95 million in foreign exchange during the fiscal year. It has also expanded its reach by adding 124 new branches throughout the country totaling the number to 593.
“Cooperative of Bank of Oromia has made tremendous effort in all aspects to realize its vision of becoming the leading private bank in Ethiopia by 2025,”said Gadisa Mamo, vice president of the bank.