Sunday, June 16, 2024
BusinessBank official: private sector shuns loans

Bank official: private sector shuns loans

– Calls for telecom sector liberalization

Assuming his leadership role last December, Pierre Guislain, the vice president of the African Development Bank (AfDB) for the private sector, infrastructure and industrialization, said during a presser on Tuesday that Ethiopia’s private sector lags behind in terms of accessing financial services the bank provides in Africa.

According to the vice president, Derba Cement is the only private entity that has been able to secure a USD 55 million loan back in 2009. That has to do with the lack of knowledge the Ethiopian private sector has towards the services provided by the bank. For Pierre, AfDB mostly is viewed as a lender to the public sector in Ethiopia.

In an exclusive interview with The Reporter, Pierre said that the purpose of his visit to Ethiopia is to hold discussions with representatives of the private sector in an effort to change the status quo. “I think we are not well known as a private sector lender. We are mostly known as a public-sector lender”, he said. During his stays, Pierre met with both government officials and CEOs of companies. He also visited Derba Cement Factory.

As part of his portfolio, the vice president is tasked to reform the telecom sector in Africa. Having the needed expertise and vastly accumulated know-how in the field from his previous stint at the World Bank Group, Pierre emphasized that Africa’s telecom sector in general, and Ethiopia’s in particular, needs to be liberalized.

- Advertisement -

“Telecoms are part of information communications technology and that sector has seen the biggest revolution globally in the past two decades than any other sector. Ethiopia is aware of that. There is a bit of a risk in staying outside of this global development. One is at a disadvantage if one doesn’t open up to what’s happening around the world. Ethiopia is currently well into the accession process to join the WTO. Liberalization of the telecoms sector is one of the basic requirements, and discussions are ongoing”, he notes.

He also talked about the initiative of the AfDB launched last year. Dubbed the “High 5s”, namely, light up and power Africa, feed Africa, industrialize Africa, integrate Africa, and improve the quality of life for Africans,” the initiative would be implemented across the continent in connection with Agenda 2063, the African Union (AU) flagship project that eyes to resolving economic, social and political bottleneck of the continent in the coming 50 years as well as the UN’s Sustainable Development Goals (SDGs).

According to Mumina Wa-Keyndo, chief transport engineer with the AfDB, since the commencement of operations in Ethiopia in 1975, the bank has funded some 130 projects for a cumulative net commitment value of USD 4.6 billion. Currently, the bank has some USD 2 billion of commitment for 26 ongoing operations in the country, Wa-Keyndo said.

Moreover, AfDB has invested USD 900 million in energy projects that interconnect Ethiopia with Djibouti and Kenya. USD 1 billion has been invested in transport operations for the benefit of regional integration. Hence, the Ethio-Kenyan transport corridor, Ethiopian Airlines and the Bole International Airport expansion work are some of the projects that have received financing from the bank. As regards the agriculture sector, the bank extended USD 630 million for the development of the Koga irrigation project which seeks to irrigate 7,000 hectares of land with a storage capacity of 77 million cubic meters of water. Some of the financing includes the USD 160 million provided for cement and mining industries. USD 340 million for water supply and sanitation projects and an additional USD 1.2 billion for budgetary support in education, health and the like are some of the areas where AfDB has provided financing to improve those sectors in Ethiopia.

- Advertisement -spot_img


- Advertisement -


More like this

Unprecedented budget proposal draws parliamentary fire, exposes inequity, inefficiency

It was with his usual nonchalance that Finance Minister...

Loan exposure worries give rise to barrage of NBE directives

Central bank Governor Mamo Mihretu has introduced a series...

Bills look to grant broader investigative powers over money laundering, terrorism financing

MPs fear bills aim at muffling opposition parties Lawmakers...

Influx of fuel business license requests prompts investigation

The National Fuel Reform Steering Committee has launched a...