Dashen Bank, one of the trailblazing private financial firms in the country, concluded the past financial year with massive successes including the rise of interest free banking (IFB), assets and loans. With galloping success, the shareholders approve the bank’s capital to be pumped to 12 billion birr within two years.
The bank that conducted its general assembly on Thursday November 18 at Mechare Meda disclosed that its gross profit has also surged by 25.6 percent.
According to the annual report of Dashen, which is one of the top profitable banks, indicated that as of June 30, 2021 its asset spiked to almost 95 billion birr. The asset growth sees a 39 percent rise when compared with the preceding year which was 68 billion birr.
In notable fashion, the deposit amount grew by over 39 percent and stood at 74.6 billion birr. In a single year the bank deposit mobilization was 21.1 billion birr.
The other significant growth occurred in the loan sector. As per the annual report of Dashen, the bank’s outstanding loan expanded by half to reach 64 billion birr.
With another record performance in loans which is mainly driven by massive deposit mobilization, the IFB business has achieved more than threefold increment compared with the same period of last year.
According to the report, over 70 percent of the resources of the bank were channeled to major economic pillars that included domestic trade and service, manufacturing and international trade.
The pioneer bank stated that the loan for real estate and consumer financing exhibited strong growth during the reported period.
In the successful year, Dashen amassed 10.3 billion birr in total revenue with 36 percent growth, while the highest income that is 77.6 percent was secured from interest income.
With the total revenue being boosted in the stated period where the bank achieved massive successes like deposit mobilization, its costs also expanded. The bank stated that the deposit increment and cost of doing business are the main reasons for cost increment for the year.
In the year, the total cost shot up by 36 percent compared with the preceding year and stood at 7.8 billion birr.
From the total cost, the lion’s share went to payment for depositors’ interest, followed by personnel expenses that were 38 and 24 percent respectively.
Despite the costs incurred, the profits for the financial firm before tax stood at 2.4 billion birr bearing growth of 36 percent from 1.8 billion birr a year ago.
In the year that ended June 30, the bank’s profit after tax stood at 1.7 billion birr showing increment of 12.3 percent.
From the international banking activity in the year, Dashen was able to mobilize USD 603 million that grew by 9.3 percent.
Dashen that is a pioneer to introduce technology based banking activity in the country said that digital banking remains a strong competitive edge of the bank, “in the reviewed period the bank’s digital payments platform, Amole, was integrated with three payment gateways, Visa, Thunes and Flutter Wave. In the card banking co-branded cards were introduced with three partners.”
Currently, Dashen’s Amole platform has 2.4 million users with additional 427 thousand new users in the reported year alone, and 552 thousand transactions undertaken through the platform.
On the same day, the general assembly conducted an extraordinary meeting and decided to expand Dashen’s paid up capital by more than twice of its prior state.
As of June the bank paid up capital stood at 5.4 billion birr, and as per discussions the shareholders agreed to raise the amount to 12 billion birr in the coming two years. The bank said that the capital increment will allow the bank to expand to its activities and affirm its competitiveness in the financial industry.
Dashen which started operation with 11 initial investors currently has 2065 shareholders.
Dashen anchors yet another successful financial year
Century-long Endeavors Open Up the Right Path to the Future
By Zhao Zhiyuan
The 19th Central Committee of the Communist Party of China (CPC) convened its sixth plenary session in Beijing from November 8th to 11th, 2021. Chinese President Xi Jinping, also the General Secretary of the Central Committee, attended the session and delivered an important speech. The plenum was convened in a year of significance, which marked the 100th Anniversary of the CPC’s founding and when China embarked on the journey toward realizing its second centenary goal. It was a milestone meeting to review experiences of the past and draw blueprints for the future, which attracted much attention worldwide.
At the session, the Central Committee fully affirmed the historic achievements scored since the Party’s 18th National Congress, and considered and adopted the Resolution on the Major Achievements and Historical Experience of the Party over the Past Century, which is the CPC’s third resolution in its century-long history. The epic journey of determined explorations and unremitting endeavors by the CPC over the past 100 years is well-captured by this landmark Resolution of more than 30,000 words. The Resolution is an epoch-making Marxist guideline document that takes stock of the major achievements and historical experiences in the century-long endeavors, and speaks volumes of the CPC’s strong sense of mission and self-confidence as the world’s largest governing party celebrating its centenary.
- The CPC’s role is central to running China’s affairs well
In the past 100 years, the Party has led hundreds of millions of Chinese people into taking the road barely travelled and blazing a new trail where China has stood up, grown prosperous and is now becoming strong, and has transformed from once catching up with the times to now setting the pace on all fronts. Such irrefutable facts have made it clear that “ Only socialism can save China, and only by upholding and developing socialism with Chinese characteristics can China’s national rejuvenation be realized”.
The Resolution recounts the Party’s lofty cause of pursuing happiness for the people, rejuvenation for the nation and common good of the world; explains with historical contexts, under theoretic frameworks and in practical terms the reasons behind the success of the CPC, Marxism and socialism with Chinese characteristics; and reveals the key to success of the CPC from Day One all the way to the future. It should be noted that the Resolution, with a particular focus on the historic achievements and shifts as well as relevant experiences in the new era, will have a powerful and far-reaching impact on the development of socialism with Chinese characteristics in the new era, and become a political declaration and guidance of action for CPC members in the new era.
- The leadership core is vital to a country and a party
Since the year 2012, the CPC Central Committee with General Secretary Xi Jinping at its core has successfully led China and its people into scoring coordinated economic, political, cultural, social, and ecological progress; implementing the four-pronged comprehensive strategy in a balanced way to finish building a moderately prosperous society in all respects, deepen reform, advance law-based governance, and exercise full and strict governance over the Party. The CPC developed and then put into implementation the new development philosophy featuring innovative, coordinated, green and open development for the benefits of all, and has been fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. The Party has promoted modernization of China’s system and capacity for governance, delivered a more fulfilling, happy and secure life for the people, and prompted historic achievements and shifts in the cause of the Party and the country, setting the Chinese nation on an unstoppable journey toward great rejuvenation.
It is General Secretary Xi Jinping that has presided over the governance of the Party, the country and the military with resolve and courage, laid out the overarching plan for reform, development and stability with perspective and vision, rightly pointed out the parallel imperative of development and security with the foresight of a strategic thinker, and delivered on the motto of putting people first with deep care. It is General Secretary Xi that has established the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, led the Party members and Chinese people into opening up a new era for socialism with Chinese characteristics, and been wholeheartedly supported by the whole of Party, country and military and highly commended by the international community.
The Resolution explicitly reaffirms General Secretary Xi’s core position on the Central Committee and in the Party as a whole, and defined the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. This reflects the common will of the Party, the armed forces, and the Chinese people of all ethnic groups, and is of decisive significance for advancing the interests and cause of the Party and the country in the new era for lasting stability and prosperity.
- The key to the Party’s success lies in ten aspects
A political party is empowered by truth only when it has a scientific theory. Over the past century, the CPC has led the people in great endeavors of making breakthroughs, rising up to challenges and going from victories to victories, and accumulated valuable historical experience along the way.
The Resolution draws lessons from history and points the way forward. The century-long experience boils down to ten points: upholding the Party’s leadership, putting people first, advancing theoretical innovation, staying independent, following the Chinese path, maintaining a global vision, breaking new ground, standing up for ourselves, promoting the united front, and remaining committed to self-reform. The ten points are closely connected and mutually reinforcing, which provide fundamental guarantee for the continued success in all undertakings of the Party and the people, pave the way for the Party to maintain its advanced nature and purity as a pioneering force in all times, and is set to serve as guidelines for the CPC in steering the future of China.
- Whole-process people’s democracy is the advanced Chinese model of democracy
Democracy is a shared value of humanity. The CPC has always been committed to the development of socialist democracy. Countries vary in history, culture, social system and stage of development. China firmly opposes the use of a single yardstick by some countries to measure the world’s various political systems and democratic models, which deprives other countries of the right and freedom to explore their own democratic paths.
The vision of whole-process people’s democracy was put forward by General Secretary Xi Jinping in the context of developing China’s democracy. It has been written into the Resolution, which will be fully reflected in the development of institutions, standards, and procedures of democracy on the path of socialist political advancement with Chinese characteristics. It is evident that the whole-process people’s democracy, which fits into China’s national conditions and effectively addresses pressing issues, is an advanced model of democracy with full chain, comprehensive coverage and representation. It is results-oriented democracy that is most broad-based, genuine and effective. It is true people’s democracy in its form and substance, and is warmly received by the Chinese people.
History contains not only wisdom from the past, but also knowledge into the future. The century-long history of CPC is a history of unflagging endeavors, theoretic explorations and party-building. The great achievements are inspiring; the valuable experience should be cherished; and the historic mission is the source of motivation. From a new starting point, under the strong leadership of Central Committee with General Secretary Xi Jinping at its core, the CPC, in keeping with its founding aspirations and path, is striving to break new ground in the development of socialism with Chinese characteristics and lead the Chinese people into scaling new heights on the journey toward the great national rejuvenation.
China and Ethiopia are Comprehensive Strategic Cooperative Partners with extensive bilateral cooperation. China stands ready to keep deepening inter-party cooperation with Ethiopia and promote experience-sharing and mutual-learning on governance in a win-win spirit. China will continue to hold high the banner of peace, development, cooperation and mutual benefits, keep to the purpose of its foreign policy for maintaining world peace and promoting common development, and build a new type of international relations featuring mutual respect, fairness, justice and win-win cooperation. China will work together with Ethiopia and other developing countries to tackle risks and challenges and contribute to the noble cause of building a community with a shared future for mankind.
Zhao Zhiyuan is Ambassador of the People’s Republic of China To the Federal Democratic Republic of Ethiopia
Geothermal can power East Africa’s energy revolution
African nations have a challenging course to chart over coming decades. Rapid growth and rising populations are ratcheting up energy demand. However, the continent is also facing a future of floods, droughts, and other extremes driven by climate change. Economic success will require not only clean and consistent power supplies, but energy infrastructure that is resilient to climate-induced shocks.
Take Kenya and Ethiopia, two of the largest economies in East Africa. In both nations, many people continue to live without electricity—12.5 million in Kenya and 42 million in Ethiopia. Energy access is set to become even more pressing, with Kenya’s power needs growing 20% faster than GDP and rapid growth in Ethiopia implying a similar rise in electricity demand. Connecting people to the grid is a priority, both for productivity and the welfare of communities.
However, the energy needs of Kenya and Ethiopia are only half the story. Both face significant risks to existing capacity as climate change becomes more acute. Current power sources in Kenya are either carbon-emitting or vulnerable to increased droughts, with 35% coming from thermal sources such as coal, gas, or wood, and another 35% generated by hydroelectric dams. The climate risk in Ethiopia is even higher, with 89% of power hydro-generated.
Already, East Africa is warming at almost twice the rate of the rest of the world, with climate change expected to increase the frequency and severity of droughts.[1] Given these risks, Kenya and Ethiopia need to reduce fossil fuel reliance where possible and diversify energy supplies to hedge against extreme weather.
Amidst increasing demand and climate-related uncertainty, geothermal energy presents an untapped opportunity. Given geothermal energy comes from heat in the Earth’s crust, powerplants can generate electricity consistently throughout the day and without regard to changes in weather or overall climate. Moreover, the consistency of geothermal energy delivers a stable baseload to the grid, ensuring a reliable level of power supply while enabling integration of other, less consistent, renewable energy sources.
East Africa has incredible geothermal potential—15,000 MW or two and a half times the capacity of the Grand Renaissance Dam. However, this potential remains unrealised. In Kenya, only 500 MW is operational, while Ethiopia runs at just 7 MW. This is not because geothermal is unprofitable or overwhelmingly risky. It comes down to the fact that drilling geothermal wells incurs a high upfront cost, meaning project developers and potential investors cannot afford even the low probability that the well will prove unviable.
Finance is key to unlocking East Africa’s geothermal potential. This begins with the region’s insurance sector, for whom the high cost, low probability profile of geothermal projects is precisely suited. By underwriting risks associated with initial set up, insurers can provide reassurance to potential investors, freeing private capital to flow into geothermal ventures.
The rewards from mobilising the insurance sector are considerable. An underwriting facility set for launch by Parhelion, a specialist in energy and climate risk finance, and backed by the UK government’s flagship financial sector programme in Africa, FSD Africa, is alone projected to increase geothermal capacity in Kenya by 20% and in Ethiopia by 500%. These increases in generation would prevent 515,000 tonnes of CO2 from entering the atmosphere per year while bringing electricity to 5.25 million people. The facility also demonstrates the economic potential of geothermal, with 2,600 jobs forecast for both East Africa’s insurance and energy sectors.
Underwriting geothermal projects would also help reposition East Africa’s insurance sector to capture a greater share of value. Currently, complex projects look to the international market for insurance, where these is both available capital and the right expertise. These global insurers then contact local counterparts as intermediaries, enabling them to meet the regulatory and practical requirements of operating in the region but channelling the premiums out of Africa. By engaging with projects directly, African insurers can go from middleman to main player. Moreover, by pooling exposure into an underwriting facility, these businesses can reduce their shared risks while still accessing the attractive returns from a profitable, reliable, and high potential geothermal sector.
Geothermal is not a golden bullet for East Africa’s energy challenges. However, it can provide a stable and reliable platform to underpin economic growth and the broader transition to clean power. Moreover, by building its capacity to underwrite geothermal projects, domestic insurers can expand their capabilities to de-risk other part of Africa’s fast-growing renewables sector. An energy revolution is coming to the region—it just needs the backing to light the spark.
Thomas Wiechers is Assistant Director, Risk at FSD Africa and Julian Richardson is Founder of Parhelion
ET projects pleasant performance despite global trends
Unlike the global trend, Ethiopian Airlines (ET) projects to reel in 80 percent of its business relative to the pre COVID 19 era performance by the end of this year.
The International Air Transport Association (IATA) estimates that the aviation industry shall recover from the COVID 19 impact by the end of 2023.
The global aviation business is still battling to overcome the problem and at least save itself from loss. However, unlike other airlines, Ethiopian Airlines has been performing better and continued to be profitable during the pandemic.
Lemma Yadecha, Ethiopian Airlines International Services Managing Director, said that in the end of the budget year that ended in June Ethiopian shall met 65 percent of its performance of the pre COVID period or in 2019.
“At the end of this year, December 31, 2021, we expected that Ethiopian Airlines will close the year by 80 percent of pre COVID 19 performance, which is odd compared with others,” Lemma told Capital.
“Other airlines are struggling to meet at least 50 percent of their pre COVID performance, while our operation is on upward trajectory, contrary to others,” he added.
Agility and taping challenges as opportunity is the major success of ET, according to the International Services Managing Director, who stressed that the leadership is valiant to manage challenges.
“Despite the enterprise being owned by government, it is operating like a private company and the management and staffs are working as owners and family,” Lemma explained while showing the reason for the success of Ethiopian Airlines that has 62 destinations in Africa and flights to all the continents around the world.
When the air transportation world was hard hit, it can be recalled that ET converted some of its passenger aircrafts to transport cargos to transport personal protective equipment for COVID 19 and vaccine to different destinations while most aircrafts were grounded all over the world.
Lemma said that the passenger sector is now bouncing back while the major success is mainly attributed by cargo service.
Regarding passenger operation ET announced that it reached 55 percent of the pre COVID 19 period, while it may vary from month to month.
The International Civil Aviation Organization reported that as seat capacity fell by 50 percent in 2020, passenger totals dropped by 60 percent with just 1.8 billion passengers taking to the air during the first year of the pandemic, compared to 4.5 billion in 2019.
Annually ET used to transport 12.7 million passengers before the pandemic. “This Ethiopian year we have planned to transport 9 million passengers that is about 70 percent of 2019, a year that was pre COVID 19.”
According to him, the MRO service that is providing maintenance service for other airlines is also growing and similarly the aviation academy is playing its part to rebound ET’s revenue.
