DBE Looks Within to Clean Up House


The Bank through its new Inquiry will investigate violations of the bank's policy




The Development Bank of Ethiopia (DBE) has established an internal inquiry team which will look into violations of its policy, proclamations and directives mandates. The team is composed of staff members of the Bank who hold different posts.

In a meeting on February 6, 2017, the Bank told staff members that this team will have the power to hold accountable anyone who violates the Bank’s rules of operations and start investigations into cases of prior violations of the Bank’s policies and directives.

“We were told that the team will look at all the staff in the course of the investigation,” said a senior official from the Bank who asked to remain anonymous.

Established in 1909, DBE is now considered to be a policy bank, which is a bank structured to implement government policies and focus on supporting areas of investment. The last few months have marked a season of turmoil and controversy for the bank.Two months ago the Bank let go its long-serving president, Esayas Bahre, and replaced him with the former governor of National Bank of Ethiopia, Getahun Nana. Getahun declined to comment on the new inquiry team stating the issue it is an internal matter of the Bank.

Upon the appointment of the new president, Eyob Tesfaye (PhD), a senior official at UN Capital Fund and who has had a two-decade working relationship with Getahun, suggested three things that the new president should concentrate on: strengthening the project analysis capacity of the bank, weeding out bad loans, and removing bad “apples.”

Following Esayas’s departure, a controversial report was released by a committee tasked with compiling findings on commercial farm investments.

The committee, in its report to the Prime Minister’s Office, indicated that there were gaps in how investments were handled. The productivity levels were below expectations and cases of financial misuse and impropriety were reported.

A year before the report, the Bank paused loans for commercial farm investments. The loans were reinstated only two weeks ago.

Last year, the Bank’s unaudited report showed that, in its core role of financing projects, it managed to improve its figures. During the last fiscal year, the bank disbursed total loans of 11.84 billion Br across 283 projects, although that number was below its target of 14.82 billion Br.

Manufacturing took the lion’s share of the loans, with 9.4 billion Br; agriculture followed with 1.5 billion Br, while the rest was spread throughout other sectors. Total loans to the manufacturing sector increased by 68pc, while agriculture loans declined by half.



By DAWIT ENDESHAW
FORTUNE STAFF WRITERS

Published on Feb 14,2017 [ Vol 17 ,No 876]


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