Of late, Revenue, Budget and Finance Standing Committee of House of Peoples’ Representatives has visited Development Bank of Ethiopia (DBE) and overseen its activities as part of the committee’s entrusted responsibility.
The committee was briefed on the bank’s five months’ performance report of 2012 (2019/20) Ethiopian fiscal year as presented by DBE President, Haileyesus Bekele.
He reported that the bank approved 3.13 billion Birr loan – 58.8 percent for manufacturing sector; 28 percent for financial sector; 6.6 percent for agriculture sector; and 6.68 percent for other sectors. On the occasion, he said 3.75 billion Birr loans have been released for these sectors and that the performance has reached about 81 percent.
“Regarding loan repayment, the president said a 3.92-billion Birr loan has been reimbursed and we have achieved 118 percent of our target,” the president noted.
For its part, the standing committee commented that the bank’s controlling and monitoring ability has shown improvements citing as it has worked debts to be paid per statute of limitations.
They noted that the bank was in bankruptcy due to bad loans.
The committee also sought further explanations on whether the bank has done enough to recuperate from the losses in short period of time.
The Bank is historic and has made a significant contribution to the development and growth of the country, Haileyesus said, adding: “However, it suffered from losses due to bad loans in 2010 (2017/18) and 2011 (2018/19) fiscal years. “In the current fiscal year, the bank transformed to be profitable.”
When explaining the reasons for the high performance of the bank in loan repayment, he said that checking and adjusting the problematic lending system of the past; placing a great emphasis on loan repayment; and strong monitoring and controlling activities of the bank have been very sturdy pillars in bank’s success.
Members of the Standing Committee also conducted field visit on Ayka Addis Textile and Investment Group PLC which was nationalized by DBE. They visited production units, product storage warehouses and sewage treatment plant.
After visit, the committee’s members asked for an explanation as to why the company was closed and why products were stored in the stores.
According to DBE’s President and other officials, Ayka Addis Textile and Investment Group PLC were founded in 2008 by Turkish investors and with loan from DBE. “The company was able to create job opportunities for more than 4,500 citizens while exporting textile products.”
However, investors have left the company due to losses and the bank took ownership of the company since the company failed to reimburse its loans.
The company’s license expired four months ago, Haileyesus said. He also added that the organization has been paying monthly wages to over 4,500 employees.
The officials expressed concern that there are products in three warehouses readied to export and they warned that the products could be exposed to damages as there is no mechanism for selling them on the domestic market.
The officials said that the House and the Standing Committee should consult with the concerned bodies to resolve the issue. The Standing Committee also visited the activities of BMET Cable Manufacturing Company including the packaging stage and finished products. They also discussed with officials and employees.
In the discussion, the company’s officials told members of the Standing Committee that the company is the only one in Africa that has been producing electricity and telephone cables though it is not producing enough due to the shortage of raw materials and foreign exchange. And also, the company was unable to properly repay the loan it had received from the DBE.
Representing the Committee, Sara Abi said that the bank had shown strong performance in rescuing itself from bankruptcy as it worked hard in managing bad loans and loans that faced less chance of reimbursement. These effective activities of the bank should continue with more vigor, she stressed.
The Ethiopian Herald Friday 24 January 2020
BY ABDUREZAK MOHAMMED
