The long-standing dispute, according to inside sources, boiled over when ECCSA demanded that AACCSA pay monthly rent for the offices it leases within the building, which also houses the offices of seven other chambers of commerce from around the country.

AACCSA and the other tenant chambers had been subject to a discounted rate (40 percent of market value) for a year, following a decision from the ECCSA board to begin charging rent in 2024.

However, AACCSA’s inability or refusal to pay rent has forced the Ethiopian chamber to seal its offices and bar its staff from entry, according to Sebsib Abafira, who was elected ECCSA president in July 2024.

He alleges that AACCSA violated the terms of its lease agreement with ECCSA, and justified his organization’s move to seal the office space as a valid legal decision.

ECCSA decided to begin charging rent in an attempt to cover costs associated with administering the building, including taxes and other expenses, according to the President. Prior to the move, AACCSA had no obligation to pay rent on the basis of a past agreement between the leadership of the two chambers.

Sebsib says the Addis Ababa Chamber and the other chambers housed within the property had been paying their rent regularly before AACCSA allegedly decided to cease payments.

A source who has served on the boards of both chambers told The Reporter that AACCSA’s objection to paying rent stems from a past decision from the Ministry of Trade granting ECCSA property rights but obliging it to accommodate other chambers of commerce within the building.

The long-serving board member views the dispute as a stain on the reputations of both chambers, and criticizes ECCSA’s unilateral decision to begin charging rent as being misguided.

The dispute with ECCSA comes as a blow to the Addis Ababa Chamber, whose plans to erect its own headquarters in the capital have made little progress.

In 2013, AACCSA unveiled the design plans for a headquarters its leaders estimated would cost upwards of 100 million Birr to construct at the time. However, a plot of land allotted to the Chamber has since been reclaimed by the Addis Ababa City Administration owing to a failure to begin construction on time.

Sources say the Chamber has filed a request for another plot and is awaiting a response from the City Administration. In December 2023, Chamber leadership told The Reporter that the planned headquarters project was expected to have a price tag in the billions of Birr.

Bank executives decried the change during the Ethiopian Finance Forum held Tuesday. Among them was Zemen Bank chief Dereje Zebene, who called on the government to reverse the decision and explore other options.

Dereje, who joined Zemen as president in 2018, fears the move will shrink the incentive for depositors to save money at banks, which will in turn lead to liquidity problems and ultimately hurt loan disbursements and investment.

“Without mobilizing more money from depositors, banks cannot provide more capital for investors. Government policy should prioritize how to incentivize saving, not the other way round,” said the President. “I doubt whether serious research was conducted before doubling the tax rate on deposit income. We expected new policy packages that encourage depositors to save more money—what we see now is otherwise.”

Experts who spoke to The Reporter also worry the move is untimely and detached from the economic context. They observe that high inflation rates already negate bank deposit interest rates, which sit near seven percent. The government’s latest figures put headline inflation at more than double that figure.

Deposit interest rates also pale in comparison the interest banks charge on loans, which can go as high as 24 percent.

The discrepancies were noted by Dereje.

“Inflation is higher than the deposit interest rate. This means the saving rate is negative,” he said.

Experts also foresee the increased tax rate could push banks to raise loan interest rates.

During the forum, bankers and investors asked NBE regulators and Ministry of Finance officials why loan interest rates for critical sectors like agriculture are not lowered.

Abie Sano, president of the Commercial Bank of Ethiopia, said the state-owned giant offers credit to the agriculture sector with a reduced interest rate—one percentage point lower than the rate offered by private banks.

NBE Governor Mamo Mihretu and Agriculture Minister Girma Amente (PhD), stated they are developing packages to lower loan interest for agriculture, as well as mechanisms to allow farmers to borrow without collateral.

Ethiopia’s savings-to-GDP ratio increased from 20 percent in 2000 to 33 percent in 2018, before it declined to 18 percent in 2024, according to an UNDP report from April 2024.

The African Development Bank (AfDB) has slightly different figures. Its latest reports indicate that Ethiopia’s gross domestic savings has grown from 9.5 percent of GDP in 2004 to 24.3 percent in 2020 through its banking nonbank financial institutions.

Speaking at the Ethiopian Finance Forum held mid week, the governor highlighted the government’s decision to open up the financial sector to foreign banks as one of its key recent policy shifts.

‎Mamo then announced that the necessary groundwork has already been laid for the expected entrance into the Ethiopian financial sector of the foreign banks.

Stopping short of naming the banks on their ways to Ethiopian financial turf, Mamo emphasized that integrating foreign financial institutions remains one of the NBE’s top priorities.

‎Discussions at the forum also touched on the potential impact of foreign banks on the local market and the broader economy, including anticipated benefits in terms of competition, efficiency, and

access to finance.

‎During his presentation Mamo has disclosed that certain guidelines previously considered “obstacles” to the entry of foreign banks will be revised sooner than the timeline initially indicated for their entry.

‎Among the policies cited as restrictive are the mandatory bond purchases required of banks and the 18 percent credit cap. The NBE Governor indicated that these policies will be repealed and that a clear deadline has been set for their removal.

‎‎Delivering an opening speech at the event, Ethiopia’s President Taye Atske Selassie, has remarked that although Ethiopia’s financial sector is over a century old, it has not matured into a strong and resilient system due to numerous challenges.

‎One key reason, he noted, was the prolonged dominance of government-led economic policies.

‎He added that in the past, the government relied heavily on large loans to finance investments, which burdened the country with debt and weakened the financial system.

‎‎He noted that Ethiopia’s macroeconomic reform has already produced promising results within a short period.

‎According to him, the reform, is built on three main pillars and has been implemented through clear planning, effective coordination, and well-defined goals.

‎Mamo on his part emphasized that Ethiopia was undergoing major reforms in its monetary, exchange rate, and financial sector policies.

‎”The overarching aim is to create a more competitive, market-based financial system,” he stressed.

‎Mamo also stated that the reform agenda places strong emphasis on the private sector and is guided by digital transformation and efforts to expand access to financial services.

 Three years after securing a license that allowed Oromia Credit & Saving S.C. to transform into a full-fledged commercial bank, the executives of Siinqee Bank are preparing to venture into lease financing and the insurance business through the establishment of Siinqee Group.

Bank President Neway Megerssa told The Reporter that work is underway to realize the conglomerate, which will include up to 10 subsidiary companies. Among them are Siinqee Bank itself, an investment banking firm, an insurer, a lease financing business, and a microfinance institution, according to the President.

Siinqee Bank already offers some of these services, but the massive new restructuring would place them under their own independent firms under the Group’s umbrella.The Group will also include an institution dedicated to providing education and training services for finance professionals, according to Neway.

The President hopes to see the restructuring expand Siinqee’s market reach and competitiveness, and improve its operations in the fast-growing digital finance scene.

Siinqee Bank currently holds 15 billion Birr in paid-up capital.

The firm has seen deposits from its 7.6 million customers surge to more than 80 billion Birr since it joined the commercial banking industry in 2022. The Bank’s more recent reports indicate it has provided more than 50 billion Birr in credit to a quarter of a million borrowers.

Siinqee Bank operates close to 600 branches across Ethiopia and boasts an employee network of more than 11,000 people.

Sefialem served at Ahadu’s helm for a year and a half. Sisay Gebru, Sefialem’s former deputy, has assumed the role of acting president. However, Sisay’s appointment is still subject to the approval of regulators at the National Bank of Ethiopia (NBE).

The central bank’s directive on the licensing and supervision of the banking industry dictates that the appointment of a chief executive officer of a bank on an acting basis must be approved by the NBE. It also caps the term limit for an acting president at six months.

Ahadu Bank, among the financial sector’s latest entrants, launched operations in June 2022. Under Sefialem’s leadership, the Bank announced its first-ever profits two years after it opened its doors. In 2023/24, Ahadu registered 175 million birr in profit before taxes and other deductibles.

Its latest annual report reveals the Bank’s income has surged to 1.15 billion birr, reflecting sustained growth in banking activities and diversified revenue streams that have contributed extensively to its solid performance.

The Bank managed to raise its paid-up capital to 1.03 billion birr by the end of the last fiscal year, far short of the minimum five billion birr threshold the NBE requires all banks to meet before June 2026.

According to the report presented during the bank’s general assembly held on November 15, 2024, the bank recorded a pre-tax profit of 5.28 billion birr for the 2024 fiscal year.

Its shareholders have also decided to raise its paid-up capital to 17.5 billion birr.

As the profit represents a moderate growth compared to the previous year, the dividend per share for the bank’s shareholders amounted to 33 percent, equivalent to 330 birr per share.

Among the key metrics reflecting the Bank’s performance is its annual revenue, which surpassed 27.75 billion birr. The figure represents an increase of 22.09 percent or 5.02 billion birr compared to the previous year.

According to the report, the bank’s revenue for the last fiscal year ranked as the second-highest among private banks in the industry.

Aemro Belete, deputy board chairperson, told the assembly that a significant portion of the total revenue came from interest income.

The report disclosed that the bank demonstrated strong growth in mobilizing deposits. According to the report, Bank of Abyssinia’s total deposits reached 192.5 billion birr, an increase of over 33.97 billion birr compared to the previous year.

It was further stated that the bank’s growth rate reached 21.43 percent.

Aemro noted that 66.4 percent of these deposits came from savings accounts, underscoring their critical role in stabilizing the bank’s overall deposits, with reports of loans to various economic sectors reaching 167.74 billion birr.

Compared to the previous fiscal year, the total loans and advances showed an increase of 14.49 percent, equivalent to 21.23 billion birr. Additionally, the report highlighted that 64.57 percent of the bank’s total loans were allocated to sectors such as import-export trade, industry, and domestic commerce.

Regarding interest-free banking services, it was disclosed that the number of customers benefiting from these services surpassed 2.1 million, reflecting a 36.99 percent increase compared to the previous fiscal year. This represents 15.32 percent of the bank’s total customer base.

Aemro noted that Bank of Abyssinia has been providing interest-free banking services for the past seven years, with available services across all branches and in 69 other dedicated branches exclusively offering interest-free banking services.

According to the report, the bank generated a total of USD 424 million in foreign currency during the fiscal year. This represents a decline compared to the previous year. Additionally, Aemro said that the bank recorded a lower performance in foreign currency acquisition compared to the previous year. 

The report indicated that foreign currency earnings decreased by USD 30 million compared to the prior year.

“Our bank will continue its full-fledged efforts to enhance foreign currency income by strengthening relationships with international trade partners, increasing the number of customers using international cards, and improving service quality,” he said.

The report stated that the bank’s total foreign currency holdings were recorded at 22.47 billion birr at the end of the fiscal year. This represents a 4.97 billion birr or 28.41 percent increase compared to the previous fiscal year.

Bank of Abyssinia surpassed 200 billion birr in total assets during the year.

According to the report, the bank’s total assets had reached 222.30 billion birr by the end of the fiscal year, which marks an increase of 32.79 billion birr or 17.30 percent.

Sebsibe Abafira was chosen to replace the outgoing Melaku Ezezew, who had been serving at the helm past the expiry of his official term.

Although its  bylaws oblige the Chamber to convene a general assembly every year, Melaku says it was not possible to do so for the last six years due to members’ inability to participate. ECCSA comprises 18 regional and sectoral chambers of commerce. Sources say the latest assembly took place partly due to pressure from the government.

“The members failed to discharge their obligations as stated in the rules. The eighteen regional and sectoral chambers in particular failed to contribute their membership fees to ECCSA. Very few of them have been paying. This has significantly affected ECCSA’s revenues,” Melaku told the general assembly.

According to ECCSA’s bylaws, membership is revoked if a member fails to pay its fees for two years.

“However, if we cancel their membership, only three members would have been eligible to remain as members, since most were not paying the membership fee,” said Melaku.

The general assembly moved to excuse all delinquent members from paying any fines they may have racked up and to maintain their membership status. The lengthy meeting, which reportedly lasted until 8:30 pm, also saw the presentation of the Chamber’s financial audit reports for the last five years.

The assembly was lively, and although criticism was voiced by participants on a number of issues, the election of the Chamber’s new president was the highlight.

The election process began abruptly, and did not feature the customary introductions and statements of vision from candidates. The rush faced opposition from the general assembly and ensuing arguments took up much of the time. The presidents of the Addis Ababa and Amhara chambers of commerce and sectoral associations went as far as calling for a suspension of the election. The process was eventually resumed.

The results, and Sebsibe’s victory with 81 votes, were announced in the evening. Sebsibe is a lifelong entrepreneur who embarked on his own business ventures at a young age. He has since grown his portfolio to include import-export, manufacturing, agriculture, real estate, and service ventures, many of which are in the Jimma Zone. He also has a proven track record in community service and positions in regional and national organizations.

Assefa Alemnew, president of the Amhara Chamber, was runner up with 40 votes. Mesenbet Shenkute, president of the Addis Ababa Chamber, won 17 votes.

Sebsibe replaces Melaku as the 23rd president of ECCSA, ending a tenure filled with controversy. Aynalem Abayneh (PhD), who was in the running as part of the Southern Ethiopia Chamber, will serve as Sebsibe’s deputy.

No less than sixteen candidates competed for ECCSA’s board positions, of which nine were elected.

Kasahun Gofe (PhD), who was recently appointed by the Prime Minister to lead the Ministry of Trade and Regional Integration, and Berhane Mewa, a former ECCSA president, were also present during the general assembly.

“ECCSA must regain its old strength. The organization must become vocal in representing the private sector interests, recommend policy alternatives for the government, and contribute a major role in economic development,” said Berhane.  “Security and inflation remain fundamental challenges for the private sector. These issues should have been on the agenda during the general assembly.”

The newly-elected president acknowledged the challenges ahead and made several pledges for his tenure.

“We will undertake several reforms. Especially since Ethiopia is preparing to join AfCFTA and WTO, we have a lot of work to prepare Ethiopia’s private sector for the global and continental competitions ahead of us,” said Sebsibe.

The government’s recent move to split the chambers into two along trade and industry lines is another issue on the agenda.

Sunshine Construction has become the latest real estate firm to sign on for an Ethiopian Airlines project that would see thousands of housing units constructed for the carrier’s employees at a cost of close to half a billion USD.  

In partnership with China Communication Construction Company (CCCC), Sunshine inked the deal late this week with Ethiopian for the delivery of five thousand housing units that will accommodate staff.

Ethiopian Airlines had last week signed a similar agreement with OVID Group, another local construction firm, to develop 5,000 housing units.

Samuel Tafesse, president of the Sunshine Group, disclosed his firm would take charge of construction of one half of the 5,000 units, while its Chinese partner would be responsible for the other half.

He told The Reporter that his company won the bid by teaming up with CCCC.

The project is to be inaugurated on March 9, 2024, with senior city administration and federal officials in attendance. Sunshine Construction is also expected to deliver another 5,000 completed units to homebuyers during the inauguration ceremony.

The project for Ethiopian Airlines will be located in Lemi-Kura Sub City, and will feature several buildings up to 20 floors high, according to the contractor.

Construction is projected to be completed in three years, Samuel told The Reporter.

Sunshine Construction is celebrating its 35th anniversary in the industry. The delivery of 5,000 units on Saturday will bring the firm’s total to 11,500 units.

The firm will also use the occasion of its anniversary to award houses to close to 20 members of its staff as a reward for their loyalty. It will bring the total number of residences bequeathed to employees to 65, according to Samuel.

Sunshine Construction is also gearing up to engage in a public-private housing partnership with the Addis Ababa City Administration, which would see it erect units under a 30/70 housing scheme. The city housing project is valued at an estimated 60 billion birr.

Samuel told The Reporter that the City Administration will hold on to 30 percent of the units under the scheme, while his firm will sell the remainder on the real estate market.

The project will reportedly feature 4,000 units and is scheduled for completion in four years’ time.

The secretariat of the Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) is slated to be the subject of a thorough investigative audit following a decision from the Chamber’s board of directors.

The board recently called for an emergency assembly to vote on the decision for the investigative audit reportedly after learning of misconduct and fraudulent activity among members of the secretariat.

Sources close to the matter told The Reporter a committee was formed immediately following the board’s decision to conduct an investigation.

The misuse of Chamber resources is among the allegations against the heads of the secretariat, according to sources. Unauthorized overseas travel and foreign currency expenditures are coming under the spotlight as part of the investigation.

The secretariat heads are also facing suspicions of forging cooperative agreements with foreign or domestic entities without the prior knowledge or consent of the Chamber’s board; signing unauthorized employment contracts and promotions; as well as huge procurement deals.

The Secretary-General of AACCSA alone is accused of making or approving 15 “unnecessary” and unauthorized foreign trips since his appointment to the post in late 2022.

The board has received information that has led it to believe that hundreds of thousands of dollars were spent on the trips, according to sources.

“There was no budget approved for the purpose of experience sharing or training abroad,” a source told The Reporter. “Foreign travel related expenses go against the Chamber’s financial policies.”

Information forwarded to the board shows that new employment contracts and promotions at the Chamber were not merit based, according to sources. The practice is against the organization’s establishment proclamation as well its human resource policy.

The board called for an investigation after the Chamber’s general manager for audit services was fired by the Secretary-General, sources say. The board feels it has lost control over the employment, promotion, and dismissal of its personnel.

The newly-established committee will conduct the investigation based on the board’s directions.

Fasikaw Sisay is the deputy president of the AACCSA, which has close to 15,000 members. He is among the individuals that brought the problems to the attention of the board.

Fasikaw told The Reporter the problems are serious and could make members of the Chamber secretariat liable for criminal offenses.

Shibeshi Bettemariam, secretary-general, and Mesenbet Shenkute, president, are bearing the brunt of the allegations as the two individuals responsible for coordinating the activities of the secretariat.

The individuals hold the responsibility to inform the board about loopholes and gaps in the Chamber’s operations. However, the board has never been presented with any reports with regards to financial problems, according to sources.

Mesenbet was the sole board member to vote against the motion to establish a committee and conduct an investigation.

Both Mesenbet and Shibeshi spoke to The Reporter about the developments concerning the investigation and committee. They both insinuated the accusations were false, and claimed to have sufficient evidence to prove their innocence.

Mesenbet downplays the issue, rejects the accusations entirely, and claims the matter is receiving more attention than it deserves. . 

Shibeshi maintains the Chamber has been conducting all its tasks legally, and says the new auditor coming will simply do its job. He denies that any of the accusations hold any substance, and argues that all travel to foreign countries was carried out according to the Chamber’s guidelines.

“The expenses presented are exaggerated. The truth will come out when the investigation is completed,” he told The Reporter. 

Mesenbet holds a similar view on the “exaggerated” amount of foreign currency allegedly spent on travels.

Shibeshi Betemariam, secretary-general, and Mesenbet Shenkute, president, are bearing the brunt of the allegations as the two individuals responsible for coordinating the activities of the secretariat. Mesenbet was the sole board member to vote against the motion to establish a committee and conduct an investigation.

Seid Mohammed, proprietor of several businesses under the brand name ‘Ambassador’, has shuttered the doors of Ambassador Hotel to repurpose the property as the hospitality industry struggles to recover from the holdover effects of the pandemic.

The three-star Hotel located adjacent to the Millennium Hall in the Bole area had been operating for 15 years before it closed its doors on January 10, 2024.

A slowdown in business forced the Hotel’s management to close the door with a plan to repurpose the property, according to Seid.

“Business isn’t the same after the COVID-19 pandemic,” he told The Reporter.

Seid disclosed the Hotel was running at a hefty loss.

He also disclosed plans to repurpose one of the four buildings on the property into a hospital. Seid says there are discussions underway with representatives of a well-known hospital, but he refrained from specifying which one.

The remainder of the property will be used for commercial and residential purposes, according to him.

“Ambassador Hotel played a big role in the hospitality industry, serving the guests coming to Ethiopia,” Seid told The Reporter. “But we have to repurpose the buildings for other services.”

Senior management and boards of the Ambassador businesses approved the decision to pivot the Hotel venture following long discussions and a conviction the change needed to happen.

Ambassador Hotel first opened in time for the Ethiopian Millennium with 48 rooms housed in one building. In the years following, the Hotel expanded to four buildings with a room capacity of 197.

Close to 100 staff employed in the Hotel’s security, custodial, finance, and other departments, will remain with Ambassador as it repurposes the buildings.

A portion of the staff will, however, be let go in accordance with labor laws and with severance compensation, according to Seid.

The Hotel employs 134 individuals, while the Ambassador conglomerate, including the core garment business and the Ambassador Mall property in Arat Kilo, employs 500 staff.

Seid founded his business in 1982 with a sewing machine, growing to the forefront of the domestic textile market over the last four decades.