NBE Bill Repealed

Addis Ababa: November 22, 2019 (NBE):- National Bank of Ethiopia has repealed the NBE-Bill Purchase Directive which used to mandate private commercial banks to buy NBE Bill 27 percent of every loan disbursement.
The Bank has issued a new directive; “NBE–Bill Purchase (Repealing) Directive No. MFA/NBEBILLS/004/2019” and stated in article 2 of this directive that the former Directive No. MFA/NBEBILLS/003/2018 is hereby repealed.
The repealed directive shall have effect with respect to any outstanding NBE Bill which has been issued before the coming into effect of this directive.
The new directive shall come into force as of the 20th November 2019

የኢትዮጵያ ብሔራዊ ባንክ የ27 በመቶ አስገዳጅ ቦንድን አነሳ

አዲስ አበባ፡ ኀዳር 12 ቀን 2012 ዓ .ም (ኢብባ)፡¬- የግል ባንኮች ለተበዳሪዎች ከሚያቀርቡት እያንዳንዱ የብድር ገንዘብ ውስጥ የ27 በመቶ ተቀናሽ አስልተው ለብሔራዊ ባንክ ቦንድ ግዥ እንዲያውሉ የሚያዝዘው መመሪያ ተነሳ።
የኢትዮጵያ ብሔራዊ ባንክ ሥራ ላይ የቆየውን የ27 በመቶ አስገዳጅ ቦንድ መመርያ ቁጥር MFA/NBEBILLS/003/2018 ማንሳት አስፈላጊ ሆኖ አግኝቶታል።
በመሆኑም ባንኩ አዲስ ያወጣውና የቀድሞውን የሚሽረው መመሪያ “NBE–Bill Purchase (Repealing) Directive No. MFA/NBEBILLS/004/2019” ከኅዳር 10 ቀን 2012 ዓ.ም ጀምሮ ሥራ ላይ ውሏል።
አዲሱ መመሪያ ከመውጣቱ በፊት በቀድሞው መመሪያ መሠረት በሂደት ላይ የነበሩ ተግባራት በቀድሞው መመሪያ መሠረት ተፈፃሚ እንደሚሆኑ ታውቋል።

News letter October 2019

የኢትዮጵያ ብሔራዊ ባንክ ከተጣለበት ትልቅ ሀገራዊ ሀላፊነት አኳያ አቅሙን አጎልብቶ በርካታ ትላልቅ ተግባራት ማከናወን እንዳለበት የባንኩ ገዥ ዶ/ር ይናገር ደሴ ገለፁ፡፡ አዲስ ከተሾሙት ም/ ገዥዎችና ዳይሬክተሮች ጋርም የትውውቅ መድረክ ተካሂዷል፡፡ መስከረም 29 ቀን 2012 ዓ.ም በባንኩ የቦርድ አዳራሽ በተካሂደው የሲኒየር ማኔጅመንት ስብሰባና የትውውቅ መድረክ ላይ ክቡር ገዥው እንዳሉት ባንኩ ጠንካራ ሥራ ማከናወን የለውጥ ሂደቱን ማሳካት ያስችለው ዘንድ ነባር አመራር አባላትን በአዲስ በመተካት በአዲስ ሀይል አቅሙን ማሳደግ ይጠበቅበታል፡፡

IMF

Ethiopia Has Builton Its Strong Track Record of Development over More Than a Decade

The International Monetary Fund (IMFhas praised Ethiopia’s remarkable progress over more than a decade.

Published on its website on December 4, 2018, IMF stated that over more than a decade the country has built on it s strong track record of Development.

Growth slowed in 2017/18, but remained high while the current account deficit continued to narrow;the IMF says in its recent report on the economic health of Ethiopia. The sub-Saharancountry is embarking on its next phase of economic and social development—supported by reforms and powered by the private sector.

Over the last decade, high growth has led to a significant reduction in poverty and improved living standards for many Ethiopians.The country’s large infrastructure investments are beginning to bear fruit and the provision of public services such as education and health has increased dramatically.As a result, the population has enjoyed important welfare gains. For example, the number of maternal deaths per 100,000 live births fell radically from 1,080 in 1995 to 353 in 2015 and the proportion of people living in poverty fell from over 45 percent in 1995 to around 23 percent in2015.

Recovering growth after a dip

In 2017/18, Ethiopia’s economic growth dipped to 7.7 percent due to reduced government public expenditure aimed at tackling the growing current account deficit and indebtedness.

Political uncertainty and severe foreign exchange shortages also dampened growth.As the political climate settles and investment recovers, growth is expected to recover to 8.5percent this fiscal year, and the current account deficit should continue to narrow.In their report,IMF staff say they expect inflation—which currently exceeds the single-digit authorities’target—to continue to fall due to an appropriately tight monetary policy.

Risks to medium-term outlook

Despite positive developments, the large external imbalances and the public debt burden are constraining future growth and pose risks to the medium-term outlook.While debt is sustainable in the medium term, Ethiopia remains at high risk of debt distress.

To mitigate those risks, restrained public sector borrowing—particularly on non-concessional
loans—while protecting pro-poor spending programs, will be key, say IMF economists.At the same time, the government will need to mobilize tax revenues and raise exports to reduce vulnerabilities over the medium term.Since his election, Prime Minister Abiy has created space for a more inclusive political dialogue and has taken steps to bring stability to the region. On the economic front, the new government has announced an ambitious reform program for the country aimed at opening the economy to private investment and competition to support sustainable growth.

Developing an open and inclusive economy

The new legal framework for public-private partnerships can play an important role in strengthening growth by promoting private sector development and the provision of public services, while reducing government costs, says the report.It also calls for privatization and removal of barriers to private investment in key sectors, which supports policy announcements by the government.The government also wants to develop the domestic financial system. An important first step will be to introduce a market for government securities with market-determined interest rates.

This will allow the central bank to reduce direct financing of the government and increase the effectiveness of monetary policy in maintaining low and stable inflation.

Reforms to support continued development

In their report, IMF staff encourage the authorities to review the strategy and financial model of the government’s development lending agency—the Development Bank of Ethiopia—which has seen lower-than-expected returns to its investments in recent years. A more flexible system for the exchange rate is also needed to increase foreign exchange reserves, improve external competitiveness, and increase the availability of foreign exchange.This would support the country’s continued development.Analysis carried out jointly by IMF staff and UN Women finds that the government’s agenda of promoting gender equality could yield large economic benefits over time. Closing gender gaps in educational attainment, formal labor force participation rates, and access to quality land another resources are key to realizing these benefits.

The new government has made progress in this area.They have appointed a gender balanced cabinet, while women have been placed in key decision-making positions, including the presidency and the head of the Supreme Court.

CBE Launches Internet Banking

ADDIS ABABA, June 15, 2012- The Commercial Bank of Ethiopia CBE has launched internet banking services in its effort to diversify its business ventures and reach a broader section of customers by providing alternative medium of transactions.

  • The services are divided into personal and corporate internet banking. With CBE’s internet banking individual customers can check their balances transaction details transfer funds transfer money to business partners, family and friends place standing orders, view cheque details, etc around the clock from the comfort of their homes or offices without having to visit a branch.
  • Under corporate banking, organizations can create multiple users with different access rights for each manage their users’ mandate by having multi-level authorization of payments as they require view their account balance information and other account details view daily transactions transfer money between their eligible accounts make payments and/or money transfers to their standard beneficiaries, etc Speaking at a press conference the CBE held in connection with the launch of the service, Information Systems Acting Vice-President Ato Solomon Mengesha said the launch of internet banking will enable the bank to significantly enhance its services.

He said the bank has paid cardinal attention to security issues so that customers’ finances are in the best possible care.

Ato Solomon said the CBE will continue investing in innovative banking services to meet growing customer needs.

CBE goes live with core banking solutions

The Commercial Bank of Ethiopia CBE on April 30, 2012 successfully went live with the core banking solutions in major head office organs and 34 branches in Addis Ababa.

The implementation of the state-of-the-art technology would enable the CBE to better cater to customers requirements in efficient, cost effective and secure manner.

With the new technology, the CBE would also offer additional services, such as internet banking and mobile banking shortly.

Local and international consultants had participated in the project that took 20 months to ensure efficiency, compatibility, security and other issues.

Preparations are in full swing to roll out the technology in the remaining branches.

NBE Holds 16th In-House Presentation Forum

The National Bank of Ethiopia (NBE) held the 16th In-House Presentation Forum on November 25, 2011 here in the premises of the Bank. While opening the forum, Chief Economist and Vice Governor of Monetary Stability Cluster, H.E Ato Yohannes Ayalew noted that the forum plays pivotal role towards enabling researchers debate on important findings and policy proposals, beef up their research skills as well as update themselves with knowledge at the frontier of economic theory and policy.

The Vice Governor further stated that, It is the wish and objective of the Bank that this forum will be able to produce papers that could be published as working paper series.

To this end, a quality assurance and screening committee would be set up in a bid to ensure that papers selected for working paper series are up to the standard, according to the Vice Governor.

Apart from this, the committee will also nominate researchers for the Banks research awards; he said further adding that a research award fund amounting close to Br.100, 000 has been earmarked for 2011/12 fiscal year. Ato Yohannes also pointed out that so far the research award fund has never been utilized for
various reasons. However, he expressed his conviction that the story would be different this time; which would of course depend on the efforts and performance of researchers. Acting Director of Domestic Economic Analysis and Publications Directorate (Directorate tasked with organizing the forum) Ato Tesfaye Gezahagne on his part said that the forum is the first one among the three forums scheduled for the current fiscal year.

The Acting Director further added that nominating discussants from clusters other than Monetary Stability which was rare in the past makes the forum unique.
Among six study papers planned for the forum, five papers highlighting banking sector development in Ethiopia, domestic saving, trade and growth, among others, were presented and deliberated by the participants.

Over 50 researchers, Directors and other invited staff of the bank were in attendance at the day-long forum.

NBE Launches Credit Bureau, Upgraded Credit Info System

National Bank of Ethiopia (NBE) launched Credit Bureau and Credit Information System in a half day ceremony organized at Hilton Addis, Ethiopia, in August 2011. The new system is an upgrading of what NBE had introduced in 2004 in which 12 banks operating then were involved. This Credit Information System marks an important milestone in financial infrastructure development in Ethiopia, as it introduces a state-of-the-art platform to facilitate sophisticated credit information sharing in the country.

The launch heralds the beginning of a new approach in credit processing, extension and management. It is the beginning of the end of collateral based lending, which dominated our entire banking history, H.E. Getahun Nana, Vice Governor of Financial Institutions Supervision at NBE, said in his opening remark at the ceremony.

The government has launched an ambitious but achievable five year Growth and Transformation Plan. The plans financing need is huge and domestic sources are expected to finance a significant part of it. And this launch would increase access to finance, he added.
Existence of credit bureau and credit reporting system enables financial institutions to make informed decisions. This in turn has benefits both to the customer and the provider of the services. Making informed decision is a fundamental issue creditors have to address as part of their routine loan provision. In the absence of information the risk is high.

However, provision of loans is still traditional in that many financial institutions are more comfortable lending to large corporate bodies. At the moment access to finance in developing countries is less than 25 percent as opposed to more than 90 percent in the developed countries, Mr. Uli Zeisluft, Principal Financial Specialist with International Finance Corporation said in his presentation. The new system facilitates inclusion of the informal sector of the economy in the formal economy, he added.

Creating an enabling environment for sustained private sector growth requires a strong and well developed financial sector that can meet their financing needs. Up to now a major obstacle in responding to this challenge has been the very great reliance on collateral as the primary determinant in deciding whether to approve a loan request, Mr. Greg Tolumin, World Bank Acting Country Director underlined at the launching ceremony.

The World Bank financed the project; International Finance Corporation provided technical support; and Compus can Direct (CSD) did installation of the infrastructure and implementation of the system.

However, the new system would only be a technology platform improvement and more need to be done to further improve credit market in Ethiopia, Mr. Adamou Labara, Resident Representative of IFC Ethiopia said on the occasion. I urge all banks and micro-finance institutions to actively participate in the credit information system, Ato Getahun underlined.

NBE support to HIV victims of former bank staff families

Families of eleven former National Bank of Ethiopia (NBE) employees were given between birr 1,000 to 1,700 in a ceremony organized at the Bank on October 27, 2011. Ato Yemane Yosseph, Vice Governor of Corporate Services, handed over the checks to the 11 HIV affected families on behalf of NBE staff. A total of birr 14,700 was provided on the day. The 11 HIV affected families were identified for support based on the size of each family, their health condition, and the income they earn.

On the occasion, the Vice Governor said NBE staff do not believe the financial support provided on the day would solve all their problems. It is rather a gesture to express the staffs concern and affection towards fellow staff members.

W/ro Hiwot Bahiru, NBE Womens Affairs Officer, on her part said visits have been made to the families to provide support as well as look into their situations with a view to decide on the kind of support that could be provided. Through such visits the committee was able to assess their needs:

  • Children and elderly people unable to access medical attention,
  • Children dropping out of school for lack of support
  • Unemployed youth living as dependents on their families
  • Children facing problems related to stationary materials, uniforms, school fee, transportation, and food Destitute .

There is also a need for auditing the finances because NBE staff who make the monthly contributions for the families would need to know whether it has reached the desired target properly, the Vice Governor said. The account reconciller is not around due to circumstances beyond control and its finances have not been reconciled for seven years. But now an account reconciller has been assigned and information is being gathered for the work to start.

NBE work place Anti-AIDS committee was established in August 1995 (Eth. C.) and had been carrying out prevention, and care and support activities since then, w/ro Hiwot said, and went on to add, it drew lessons from Commercial Bank of Ethiopia and Business Bank and drew up regulation. It identified former employees who died of AIDS in the years 1985 to 1995 (Eth. C.) and further identified those in bad need of support. And it provided eight rounds of support from 1996 to 1999(Eth. C.). Three bank employees i.e. People Living with HIV/AIDS and with very low monthly incomes, have been given support to enable them cater for their better food requirements.

It had been hoped to do better than the one delivered on the day and in the future efforts would be made to raise more funds to meet the need on the ground, Ato Yemane said.

Finally the Vice Governor expressed his appreciation of the support Change Management and Communication Directorate provided for the endeavour as well as the Committee and W/ro Hiwot, NBE Women’s Affairs Officer.

NBE to Set up Online Credit History

The financial sector regulating arm of the Ethiopian government, National Bank of Ethiopia (NBE), is set to commence an online client credit history at a cost of four million dollars in one month. The real time approach of sharing information with the central data system is expected to significantly reduce the information gap between lender and borrower. It also enables the regulator to assess and prevent systemic risks in the financial sector.
The system provides information about a borrowers behavior. Does the borrower have a positive credit history or a negative one? Such information helps one to make a decision of whether or not to lend much more easier, explained Uli Zeisluft, Principal Financial Specialist at International Financial Corporation Advisory Services.

The system includes in its database borrowers addresses, the partners information, previous credit performance, current levels of indebtedness, the amount of time credit has been in use, collateral information and court related issues.

Since there are no unique identifiers such as an address on a national level, the regulator is forced to make use of the Tax Payers Identification Number (TIN) provided by the Ethiopian Revenue and Custom Authority, said Mathiwos Shamo, Financial Sector Capacity Building Project Coordinator at NBE. The technology upgrading project will totally transform and expand the capacity of the former Credit Center under the Bank Supervision Department of NBE. It will replace manual correspondence between banks and NBE about both commercial and consumer loans borrowed once a month enabling a real time information exchange.

At present the database is set to link borrowers information from banks and microfinance institutions. In the near future it will also include insurance, added Mathiwos.

Experts in the financial sector argue that the creation of such an information mechanism will broaden and ensure fair access to credit by reducing the level of asymmetrical information on the part of tender about the borrower. This in itself facilitates access to credit and lowers credit costs thereby enhancing profitability for all parties involved in the lending and borrowing process. Above all, it ensures better financial resource allocation.

Non performing loans (NPL) will significantly fall following the implementation of the project because every lender will have full information about their clients credit history. This reduces risks of default. If the rate of default goes down, profitability will subsequently increase, contributing not only to the reduction of NPL but also to the stabilization of the financial sector in general, the project coordinator explained.

The program was financed by the World Bank and technically consulted by the International Financial Corporation (IFC); a World Bank Group financial advisory entity.

As we did yesterday and as we are today. IFC would be pleased tomorrow to provide its technical support to NBE with the overall objective of developing the private sector,said Adamou Labara, Country Director of IFC at Ethiopia.

The National Bank of Ethiopia was established in 1963 by proclamation 206 of 1963 and began operation in January 1964. Prior to this proclamation, the Bank used to carry out dual activities, i.e. commercial banking and central banking.

P.O.Box: 5550
Tel: +251 115 517 430
Fax: +251 115 514 588
E-Mail: nbe.edpc@ethionet.et