– Industry insiders question official stance on cash shortage
The Vice Governor of the National Bank of Ethiopia, Solomon Desta, has downplayed concerns over a liquidity shortage in the country’s banking industry.
Speaking at a press briefing during the East Africa Finance Summit in Addis Ababa, Solomon said only one bank is facing a liquidity crisis, implying the rest of the industry is in a stable position. However, he did not specify which bank.
“Except for one bank, the banking sector in Ethiopia is not facing a liquidity crisis. That particular bank requires management change,” Solomon said while briefing journalists.
His remarks contradict the reality on the ground, with most bank branches struggling to meet customers’ daily cash withdrawal limits. Ethiopians currently grapple with long queues at banks and ATMs as they try to withdraw money.
Solomon acknowledged there has been a surge in demand for cash, which he attributed to the post-war economic rebuilding phase. But he downplayed concerns about an overall shortage of liquidity in the banking system.
Many bankers and customers have expressed skepticism over Solomon’s assessment, saying there are clear signs of a liquidity crunch affecting most banks.
“We don’t even have cash for our ATM,” said a private bank teller who spoke to The Reporter.
Another banker from another private bank downplayed the vice governor’s denial.
“It’s an industry problem, and difficulties with bank-to-bank transfers clearly show there is a cash shortage,” the banker said.