Page 1 - Print Version Volume 22 - Number 1126
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Volume 22 No. 1126, SUNDAY, November 28, 2021 Content Matters

Roads Authority                                          T e n ( 1 0 ) b i r r o n ly
 Lifts Embargo
                                              Central Bank Spurns Insurer
   on Tsehay                                    Outcries Over DBE Bonds
Following 4.7m                                                Private insurers account for 72pc of industry capital
 Br Settlement
                                                By BERSABEH GEBRE             Regulators at the National       introduced the bonds          industry under liquidity
The ERA debarred 12                                                         Bank of Ethiopia (NBE)           hoping to finance public      pressure, leaders of the
                                              FORTUNE STAFF WRITER            issued a directive three         projects launched by the      Association of Ethiopian
 financial institutions                                                       months ago, binding              government. Backed by the     Insurers (AEI), chaired by
                                              The central bank has rejected   insurance companies to           state, the bonds can be used  Yared Molla, CEO of Nyala
     earlier this year                        pleas from the insurance        spend a minimum of 15pc          as collateral.                Insurance, pleaded earlier
                                              industry to ease demands        of their net income in buying                                  this month to review the
     By BERSABEH GEBRE                        on firms to invest in bonds     the bonds. The authorities       Claiming the mandatory
                                              issued by the Development                                        investment would put the                             (Continued on PAGE 5)
   FORTUNE STAFF WRITER                       Bank of Ethiopia (DBE).

The Ethiopian Roads Authority                 SUNDAY MARKETS OFFER RESPITE
(ERA) has lifted a ban on Tsehay
Insurance S.C. preventing it from             Sunday has become a sought-after market day for                                                                                              Photo by: Sawrawork Tafari
issuing advance payment and                           residents of Addis Abeba. If they venture into the
performance guarantee bonds for                       areas of Mexico, Megenagna, Qality, Jemo or Piassa,      consumers, an issue the city administration is attempting
contractors ERA hires.                                they are bound to run into lively marketplaces where     to address. City officials hope to continue the markets,
                                              food staples can be bought at much lower prices than offered     encouraged by the excitement from both consumers and
The move comes after the                      at regular retailers. They could buy quantities of potato for    traders. They want to add 10 more locations to the list and
insurance firm paid a settlement              half the price, or onions for two-thirds and a bag of spaghetti  make grocery shopping a Sunday ritual. They plan to set
of 4.7 million Br to the Authority            20pc cheaper than other stores. This is no small respite for     them up in permanent places where the markets can be
for an advance payment guarantee              consumers in an economy where annual food inflation hit          more accessible.
bond it had issued to Akir                    40.7pc last month.                                               Economists that closely follow the market see the initiative
Construction more than seven                  There are 148 cooperatives in the capital, with many selling     as an encouraging start to stabilise prices. But they concede
years ago. The construction                   at these markets owing to the joint initiative by Addis Abeba’s  inflation is much more an issue of productivity than caused by
company was incorporated in                   Trade Bureau and Cooperative Agency. Consumers have              dysfunctional supply chains. The more produce available, the
2004 with Awetahegn Kiros as a                responded with enthusiasm and do not seem to miss the            less likely they are to be manipulated by intermediaries, they
major shareholder. A significant              intermediaries that connect them to the producers. Supply        argue. Relieved consumers, meanwhile, want city officials to
player in the construction industry           chain problems are one of the factors driving prices up for      continue installing more of the weekend markets. please
for two decades, Akir was awarded                                                                              see the full agenda on page 2.
a contract to construct a 59Km road
from Sembo to Shola Gebeya in the
Amhara Regional State in 2014. The
project was initially projected to
cost 663 million Br, scheduled to
be completed in three years.

Tsehay issued an advance payment
guarantee bond for the contractor.
These bonds cover from 10pc to
20pc of the project cost in value
and are designed to protect project
owners from default risks by the

The start of construction awarded
to Akir Construction was delayed by
two years. Its managers had blamed
disputes over the right of way by
residents, forcing the Authority to
extend the deadline to 2019. As the
project progressed, the value of the

                       (Continued on PAGE 5)

Deposits (2019/20)  Dashen (53.5b Br)         BoA (47.6b Br)  NIB (33.7b Br)  Hibret (34.7b Br)                Awash (74.3b Br)  LIB (26.1b Br)  BIB (13.9b Br)
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