Ethiopia sacks two state bank presidents

Ethiopia sacks two state bank presidents

Finance

Ethiopian government today announces sacking of two big state bank presidents.  The Finance Institutions Enterprises Agency of Ethiopia has appointed new presidents for the Commercial Bank of Ethiopia (CBE) and the Development Bank of Ethiopia (DBE).

Mr. Bacha Gini, who was deputy president of Cooperative Bank of Oromia, has become president of CBE replacing Mr. Bekalu Zeleke. Mr. Haileyesus Bekele has become the president of DBE.  Mr. Haileyesus Bekele has served as president of the Construction and Business Bank of Ethiopia, has become part of the CBE a few years ago, according to a state affiliate local media report.



CBE, is the biggest bank in Ethiopia with about half the market of in the overall banking sector of the country. With some 66% share of the total deposit, 31.5% capital, 52.6% credit and 36.3% branch network in the sector, the Bank dominates the banking business in Ethiopia.

Meanwhile in the past few years, especially after it has embarked on a huge government housing program, CBE’s reputation has been going down following the delay of the delivery period of the house and the controversies around the construction.

The Development Bank of Ethiopia was set up in 1909 with the name, the Society for the promotion of Agriculture and Trade. After going through different names under different regimes, DBE has structured itself with the priority of finance both state and private developments and investments in the priority sectors of the government.

Over the past two decades DBE is known for giving loan without collateral for projects such as, agriculture, agro-processing, pharmaceuticals, chemicals, textiles,  leather and leather products, among others.

An investor, local, foreign or joint venture can get 70%-85% loan of her/his total investment for the projects from DBE.

Meanwhile, this has also led to abuses of the money by fake investors and party affiliated companies and politically exposed people. Some of the reports that shows the abuses of DBE’s loan includes failed agricultural projects in Gambella region, ten state sugar factory projects, among others.

The new presidents of the two banks are expected to resolve some of such crisis the institutions have fallen into mainly as a result of fatal mix of politics with business that jeopardized professionalism.

It is recalled that recently the new prime Minister of Ethiopia has appointed a new governor for the National Bank of Ethiopia, which is in charge of regulating the financial sector of the country [ banking, insurance and microfinance institutions].

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