Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 16th of October twenty twenty-five. A quick summary of what's going down in Ethiopia.

The Ministry of Finance announced on Tuesday the 14th that negotiations with a committee representing countries that loaned Ethiopia over a billion US dollars about thirteen years ago have failed to strike a debt restructuring deal.

The two parties negotiated on the terms of restructuring a loan Ethiopia was supposed to pay back in twenty twenty-four. Ethiopia wanted the committee to lower the amount due by sixteen percent to eight hundred and forty million US dollars. However, the committee said it would agree to a reduction of only ten percent and didn’t accept Ethiopia’s proposed schedule to repay the debt.

After another round of back and forths, despite agreeing on financial terms, the two sides couldn’t strike a deal because, according to the ministry, the committee included non-financial terms that the government didn’t agree to.

The ministry also discussed a loan with the International Monetary Fund and the World Bank. The minister of finance, along with the governor of the National Bank and other top government officials, was in Washington, D.C to take part in the annual meetings of the two organizations.

The two organizations have already given Ethiopia a significant amount in loans to fund the homegrown economic reform. The minister of finance said the reform needs more funding for its implementation. He added that more financial support will help build on the reform’s momentum in bringing about positive change. He said the reform has contributed to inflation control and increased exports, among others.

It’ll be interesting to see whether the World Bank says yes to more loans, but in the meantime, the organization recently released a report, titled the Poverty and Equity Briefs. In the document, the bank said that even though Ethiopia has made basic improvements, it expects the country’s poverty rate to increase to forty-three percent because of various internal and external factors, such as conflicts in parts of the country and the consequences of COVID-19. This is an increase from twenty-three point five percent in twenty sixteen, the last time official poverty estimates were calculated.

The bank also said literacy rates and earnings are low and that basic services are not available to a significant percentage of the population. City dwellers are also having trouble getting by due to inflation, but those living in rural areas are not struggling because of inflation as much as their urban counterparts. However, urban poverty rates are significantly lower at fifteen percent compared to rural poverty rates, which stand at forty-five percent.

Meanwhile, Residents of the Amaya Woreda district in the South-Western Shoa Zone of the Oromia region have been living in various parts of the Central Ethiopia region because they were displaced due to an attack that the Oromo Liberation Army carried out over a year ago. Among the over thirty thousand internally displaced, fifteen thousand relocated to the Central Ethiopia region.

A coordinator called on the government to provide them with humanitarian assistance and to ensure peace and security in the district so that they can return to their residences. The coordinator said he submitted complaints, including to the Ministry of Peace, the Oromia regional government, the Ethiopian Human Rights Commission, and the government, but said that he hasn’t heard back from the government yet.

Back in Addis Ababa, the Ministry of Transportation and Logistics held a press conference this week to communicate the specifics of its plans to replace all vehicle license plates with new ones, with new designs and numbering schemes. The minister said his office will begin replacing the old plates in two months and plans to change all plates by the end of the current fiscal year.

These new plates are mandatory. Vehicle owners will have to pay for them but the amount will vary depending on the type of vehicle, with electric vehicles (or EVs) and public bus owners expected to pay less because the government wants to encourage the use of EVs and subsidize public transportation. Also new is the ministry’s plan to allow vehicle owners to customize the number and letters on their plates for a higher fee.

More news from the ministry of transport, as it indirectly announced, via a letter it sent to the customs commission on Monday the 13th, that it has lifted its restrictions on the import of a Chinese-made heavy-duty truck commonly known as Sinotruck. The ministry initially suspended its imports because of quality and technical issues.

The ministry said it has discussed and reached an agreement with the manufacturer, promising it would resolve these technical issues.

In business news, local company AMG Holdings signed an agreement with a Chinese company to supply it with glass manufacturing machinery. The company said this is part of its plan to build a glass manufacturing plant that is expected to cost over fourteen billion birr, which is more than a hundred million US dollars.

The company said the plant will be able to cover ninety percent of the country’s glass demands and will produce over six hundred tons of glass every day.

Another company that is eyeing expansion is the state-owned Ethio-Djibouti railway company. It laid the foundation stone last Thursday the 9th for a railway construction project, marking its entry into the expressway and railway construction sector. Originally, it was an organization specializing in the transportation of goods and people.

The Minister of Transport attended the foundation stone laying ceremony. He pointed out that this will be the first-ever railway infrastructure construction project that Ethiopian professionals will exclusively build.

Next, at a press conference last Wednesday the 8th, The Ophthalmological Society of Ethiopia called on the government to exempt prescription glasses from taxes.

Members of the society explained that because taxes have pushed prescription glasses prices out of reach for many, eye disease cases that are easily curable with prescription glasses are becoming more complicated. The state minister of health was also present and acknowledged that prescription glasses aren’t currently easily accessible for many people who need them.

The National Bank held yet another round of its foreign currency auctions on Tuesday the 14th. Many banks participated and over thirty managed to win some of the hundred and fifty million US dollars that were up for grabs.

This week’s auction was the tenth round since the bank decided to let market forces determine the value of the birr against foreign currencies. On average, the banks bought one US dollar for a hundred and forty-eight birr.

The Ethiopian Deposit Insurance Fund, an organization established to help ensure that if banks can’t return their customers’ deposits, customers receive at least some of their deposits, announced that it has collected over two billion birr, which is more than ten million US dollars, in premiums.

The fund managed to collect this amount in just the first quarter of the current fiscal year, which is twenty-five percent higher compared to the amount it collected in this period last year. The fund receives premiums from financial institutions and said it was thanks to increased contributions from commercial banks that it managed to bring in this amount, which is also higher than its target.

And to close this edition, Etihad Airways, an airline based in the United Arab Emirates, inaugurated a new flight service that runs daily from Abu Dhabi to Addis Ababa. The new flight service was inaugurated last Wednesday the 8th with Etihad’s CEO and other executives boarding the flight to Addis, where the Ethiopian Airlines CEO welcomed them.

Ethiopian Airlines already has daily flights to Abu Dhabi and Etihad’s CEO said he still wants to see more flights between the two capitals. Addis Ababa is one of ten new destinations in Africa that Etihad launched this year.

Aaand that’s it for this week! Thank you for joining us!

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