Wednesday, October 1, 2025
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$400M worth of petroleum smuggled out of the country

Around 400 million dollars’ worth of petroleum has been illegally smuggled from Ethiopia in 2020/21 according to reports. The contrasting prices with markets in neighboring countries have offered a lucrative prospect for profit through cross-border contraband trade, causing irregularities and disruptions in domestic fuel distribution.

“Even if there is no figure set by the government’s side, the issue is a huge problem the country is facing,” said Ahmed Tusa, Director of Ethiopian Petroleum and Supply Enterprise (EPSE) whilst commenting on the issue.

Ethiopia’s annual oil consumption has reached 3.8 million metric tons. Which 65 percent of this is gasoline. Over 250 million dollars is currently spent every month on fuel purchases.

As Ahmed elaborates, to cope with the challenge, the enterprise is applying different mechanisms both short-term and medium action plans. Applying quota and strengthening the control is noted as the short-term mechanism whilst removing the government subsidy from oil products are viewed as the sustainable solution.

Recently, the central government has announced that it has designed to apply a quota on oil distribution for stations in Somali and Oromia regions mainly for the towns that are highly attached to the contraband activity.

As the enterprise’s director highlights, the quota allows the government to limit the amount it delivers to those border areas. The decision will impose a burden on regional administrations to tighten their regulation to curb the contraband with the aim to keep the public from petroleum shortage.

Likewise, removing subsidies will be applied with different mechanisms where it will be removed within one to five years based on assessments. As Ahmed indicates the government is working closely with different stakeholders on the issue. “This will help us to minimize the price gap with neighboring countries,” Ahmed added.

Ethiopia allocates an almost similar proportion of foreign currency income secured from export earnings to oil imports.

Compared to the previous year, the annual petroleum import bill of the Government has increased by close to 19 percent during the last budget year 2020/21 reaching an all-time high of 72.60 billion birr. In the previous budget year (2019/20) ended July 7, 2020; Ethiopia spent a total of 62.05 billion birr to purchase close to 3.87 billion metric tons of petroleum.

With regards to pointing out the thorn in this space, oil company executives, transport companies, and gas stations are said to be part of the problem as opposed to the solution.

NBE knits new directive to place IT at banks’ core operations

National Bank of Ethiopia (NBE) puts in place a directive that will see core banking services receiving mandatory IT support.

The directive that is set to take full effect in 2-years’ time as of April 1, sees the regulator setting the standard so as to strengthen the core operations of banks.

Similarly, bankers have openly welcomed the new directive citing that it will boost the banking industry as it preps for stiff competition when it opens its doors to other international banks.

Experts explained that thus far, the banking industry was in part through its due diligence pushing for excellence to modernize its operations and business, though it was not a requirement by NBE.

Bank presidents like Asfaw Alemu, President of Dashen Bank, which is one of the strongest when it comes to technology investment in the financial sector activity, said that the new directive of the regulatory body is beyond core banking implementations that the financial sectors conducted in the past.

He said that it is pivotal for banks to invest in IT, “banks have different investments on information technology to which the new directive will give the required framework for their investments and brings them to the standard on the sector.”

Asfaw reminded that at its core the directive requires banks to have policies and strategies for the implementation and administration of modern technology.

The ‘requirements for information technologies (IT) management of banks directive no. SBB/83/2022’ in its preamble said that the business process supported by IT improves the efficiency, effectiveness and competitiveness of a bank and added that some banks are running their operations manually or their operations are inadequately supported with IT.

The directive argued that it has become important to require banks to automate at least their core business processes and their management information system.

“Risk related to the usage of IT should be adequately and periodically identified and managed to ensure the safety and soundness of individual banks and the banking sector as a whole,” it further adds explaining why the directive was issued.

The directive said that banks are supposed to allocate finance and human resource for the effective implementation of IT strategy and IT risk management programs.

Article four sub-article, one and two of the directive stated the requirement that a bank shall describe and include the role of IT in its business strategy, and develop and implement an IT strategy.

Sub article three of article four stated that an IT strategy shall be aligned with the bank’s business strategy and shall cover likes of assessment of IT opportunities, threats and internal strengths and weaknesses to manage information technologies, assessment of stock of existing IT and planned ones to be introduced in the future, strategies to ensure security in the usage of IT, and identification of IT initiatives to achieve indicated objectives.

The directive included that the bank shall develop and implement IT governance, including duties and responsibilities of the board, senior management IT department, risk management and internal audit functions and other relevant organs of the bank.

Formation of IT department, policies and procedures, and annual IT plan with an allocation of duties and responsibilities among all responsible organs of the bank are also expected to be developed and implemented.

Article five stated that a bank shall fully automate at a minimum its core business processes, “so as to improve the efficiency and effectiveness of its operation, customer service delivery and risk management, among others.”

It imposed that the automated core business of a bank shall be interoperable with one another to ensure automated data sharing and communication among the IT systems.

The automated system is required to support the generation of periodic operational and financial performance reports of the various businesses of the bank, proper exercise of shareholders’ rights including getting the necessary and relevant information, and generation of periodic supervisory returns or reports as required by NBE.

MoF’s move causes uproar amongst bankers

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The Ethiopian Bankers Association (EBA) raise concerns following the latest move by the Ministry of Finance (MoF) which orders public institutions to expel their accounts from private financial firms. Financial experts warn this will cause quakes in the sector.
Recently MoF wrote a letter to public institutions to close their accounts at private banks and repatriate their resources to the coffer at public banks which would be in the Commercial Bank of Ethiopia (CBE), which has so far been assigned by the government financial arm, central bank, to manage public money on its behalf.
Sources told Capital that during its meeting held on Friday, April 15, EBA which includes presidents from private and public banks, had in-depth discussions about the issue and agreed to file its concerns to the relevant government body.
Some described the decision of the government as astonishing with respect to the banking industry and added that they’re afraid that it may erode the confidence of the public.
After Friday’s meeting, a senior banker that Capital asked for comments about the decision generally said that the government has continued through with its socialist ideology as before.
“The main reason to continue on this poor economic growth is the attitude. The government is saying that the private sector is the economic engine for Ethiopia but financial institutions are the heart of the engine. I believe that the government does not totally understand the role of the private sector which will end up creating a paradigm shift for the economy if it does not get proper attention and support from the government,” he expresses his anger, adding, “proper liberalization is a must.”
He said that banks by default are public property rather than a few individuals or groups, “the major stakeholder of the financial industry is not shareholders, clients, staffs or the community but the government first. We pay income tax every year to the government.”
Some other bankers that Capital interviewed about the issue said that the government may have a right to select a financial firm for the budget management but it passed a swift decision that might break the private sector and public’s trust in private banks.
However, some argued that all banks including public banks have similar licenses for a similar business, “but the government is issuing different directives for the private banks and public banks, which raise eyebrows on the right to operate in the country equally.”

Establishing enduring people’s leadership

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The modern world system, which has been around for over half a millennium is collapsing in front of our eyes, but its demise still needs to be managed carefully, if we want to avoid catastrophic wars. The final collapse is expected to be unprecedented, given the scope of the system’s reign and the number of people that have been fully incorporated in it. Unlike before, the management of the impending collapse requires the active participation of ordinary people across the globe. To this end, the sheeple’s leadership must be qualitatively enhanced and forged to the fore. The nation-states and their main governance structure, namely; the legislative, executive and judiciary will not be adequate in the coming years, as the states are the very ones that are prone to waging wars!
Where are the loci of the sheeple’s leadership (not the elites) and how is it to be leveraged in the effort to bring about a more egalitarian, a more democratic, a more peaceful and a more sustainable societal existence to collective humanity? From the outset, one should realize dominant interests have always undermined the sheeple’s initiative to build its own capacity, particularly in interrogating as well as managing the modern world system. Since the anchoring economic regime of the prevailing world order is capitalism, its nemesis, labor or people, had to be subdued in all their activities; economic, political, cultural, moral, etc. As situations deteriorate, such institutionalized discrimination of the sheeple (by dominant capital), spearheaded by entrenched interests, is being challenged openly. Generalized unease, protracted rebellion (wars, etc.) and disillusion about the delusional economic foundations, particularly its lunatic assumption of non-stop growth in a finite planet, are increasing across the globe. This, on its own, can be regarded as another manifestation of the creeping breakdown of the modern world system! Late modernity served by its devoutly subservient elites has become out rightly anti-life and obviously this cannot continue any longer! Let’s revisit the achievements of traditional people’s associations that facilitated progressive popular participation in the world.
The modern world system has managed to achieve some solid emancipatory projects. For instance, voting right that was once the privilege of male property owners was ultimately succeeded by universal suffrage. Labor or organized labor to be more precise, which is the core of all industrial economies, also managed to share some of the surplus with capital. Progressively, democratic dispensations became strong enough to challenge some of the excessively destabilizing policies of entrenched interests, though not always successfully. People’s associations are generally and naturally unwieldy, unfocused even undirected, but their main thrust; that of ‘sustaining life no matter what’, differentiates them from the more powerful profit driven corporations/organizations that worship incessant accumulation without due regard to other aspects of existence. In some countries such people’s organizations are purposely weakened so that they cannot enlighten the sheeple as to the real workings of the dominant destructive system. When it comes to establishing meaningful peoples’ associations, the old socialists did make some impressive headway in the 20th century. Unfortunately, many of these people’s institutions were employed mostly as means of control and were quite effective at it, if we might add. Recent innovations in areas of popular participation, based on genuine democracy with a clear intent to empowering the sheeple in its quest to unravel the going-ons of the unsustainable system, are being experimented on in different places.
Let’s look at associations we have here in Ethiopia. The task at hand is how to augment them so that they will serve as countermeasures to the over dominant state institutions that have proved quite prone to capture by oligarchs and aspiring bourgeoisie (lumpen) from within the political leadership! Socialist Ethiopia has left us with the legacy of the ‘kebeles’, ‘peasant associations’, ‘youth association’, ‘women’s associations’, ‘trade union associations’, etc. Without a doubt, these institutions served as effective control mechanisms in those days. Nonetheless, we believe these people associations can be very useful to effect needed changes, if they are democratized enough. They might even become centers of emerging quality leadership that will have no unhealthy tie with dominant capital and its degenerate oligarchs. For instance, the ‘anti-corruption movement’ that was popularly initiated but was systemically frustrated by the operatives of capital and the state could have made its own impact along this line, to say nothing about the enhancement of good governance across the board. Since such people’s associations are closer to the crime scene and crave for accountability and transparency, they can be a potent force against intentional maladministration/corruption, etc.! Regular open discussions in these institutions (not always chaired by state operatives) on various pressing issues can help the politicos in power to form more relevant and need driven policies. By genuinely empowering these institutions the state can tap the immense energy of the sheeple, as well as solicit political support to its policies, existing or proposed. Many thorny issues can be successfully hammered out in these people’s organization if democratic principles are genuinely upheld!
When things start to sour between the politicos and the sheeple, means that might not be to the liking of many will be employed to convey dissatisfaction to the power that be, just like what we are witnessing in Ethiopia today. Peoples’ associations must be able to conduct peaceful protests/demonstrations, etc. legalistic obstacles notwithstanding! Such activities must be one of their prerogatives. When the heavy handedness of the state reaches a level that can be considered offensively suffocating (by the sheeple), direct actions, legal or otherwise, cannot be ruled out. For the sake of good governance, certain inalienable rights of citizens should not be considered as mere largess of the state! States all over the world should be reminded about the limit to their blunt preponderance, rather frequently, as prescribed by the old revolutionary/statesman.