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Ethiopia’s prime minister summoned senior officials over alarming decline of revenue from export

(ADDIS FORTUNE) – True to his promise, Hailemariam Desalegn, prime minister of Ethiopia, summoned some of his senior officials in the macroeconomic team to his office at Lorenzo Te’azaz Street last week.

Among these officials were two or three who are locked in a feud over the availability and stock of the nation’s foreign exchange reserves.

The meeting was an offshoot of a preceding meeting called to discuss the state of the nation’s exports, whose revenues showed an alarming decline over the past two quarters.

This ought to be all the more alarming to Hailemariam and his macroeconomic team who are in charge of managing an economy highly dependent on foreign imports to acquire capital goods, thus an ever rising import bills.

To the discontentment of Mekonnen Manyazewal, minister of Industry, the number of industrialists threatening to shutdown their outfits, owing to a shortage of foreign currency to open letters of credit, is on the increase.

Bekalu Zeleke, president of the Commercial Bank of Ethiopia (CBE), the state-owned bank where majority of these letters of credit are processed, had for so long acted in the “business as usual” mood, a position dictated upon every banker in the country by authorities at the central bank.

Three weeks ago, during a high level export committee meeting, he chose to speak truth to power and confronted Teklewold Atnafu, governor of the central bank.

During this meeting chaired by Hailemariam, the Governor fired back blaming the bankers for their failure to prioritise allocation of foreign currency on the basis of national needs.

Convinced that the squabble between the two gentlemen should be settled in a platform other than the formal and rather larger export committee meeting, Hailemariam reckoned both to move on to other issues of the day. The platform he had wanted came about last week, where he brought to the table the old guard of the macroeconomic team, and added more.

Neway Gebreab, his senior macroeconomic advisor; Sufian Ahmed, minister of Finance & Economic Development (MoFED); Bereket Simon, board chairman of the CBE; Abay Tsehaye, board director; as well as Mekonnen, Teklewold and Bekalu met to trash out their outstanding issues.

Much of the briefing, in providing the macroeconomic situation of the country, was made by Neway, before the senior officials tried to address the issue that had the two bankers bickering.

Neway has reported that there is indeed a foreign currency crunch in the economy and many businesses are in a tough operating environment and unable to access imports as a result.

The CBE President has also detailed the number of letters of credit his bank processed over the past few months against what was made available to him, while listing out all the outstanding applications for imports.

Nonetheless, some are reportedly surprised to learn that the Governor claims he has no knowledge of an alleged underground market in the banking system whereby businesses pay between 1.50 Br to two Birr as a kickback for every dollar they are allowed to access in letters of credit.

Although Hailemariam had wanted the two gentlemen to sit and hash their issues out, neither one strongly suggested that the source of their tension is their inability to discuss their problems on their own.

To the delight of Bekalu and perhaps his clients, the meeting did not conclude without a result, claims gossip. The Prime Minister has instructed Teklewold, his political ally for a long time, to make 400 million dollars available to the CBE, hoping that this will somehow push things, otherwise stalled, a little forward.

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