New Chairman Takes Helm at Development Bank


Shiferaw Shigute, a former Minister of Education, takes charge.




Shiferaw Shigute, the former minister of education and former board chairman of the dissolved Construction & Business Bank, has been tapped as the new board chairman of the Development Bank of Ethiopia (DBE). He replaces Ahmed Abitwe.

His appointment was approved by the Public Financial Institutions Supervision Agency. A letter signed by Director General of the Agency, Sintayehu Woldemichael, the same person who removed Esayas Bahre from his presidency at DBE, affirmed the post.

Shiferaw, who was recently transferred from the ministry of education, has chaired CBB during the presidency of Hayleyesus Bekele, who is now the new vice president of DBE. After CBB was dissolved, Hayleyesus took a position at the Commercial Bank of Ethiopia (CBE). However he resigned from his position in September 2016

The current turmoil at DBE has brought new faces to the helm. Currently the bank is being lead by the former long standing vice governor of the National Bank of Ethiopia, Getahun Nana. DBE’s former vice president came out of retirement to fill Getahun’s vacated position.

The turmoil at the bank came after the release of a report on the bank’s involvement in loans disbursed to commercial farms. The report was presented to the Prime Minister’s Office and revealed issues with the use of the loans. The report was the culmination of an investigation by a special committee, led by Alemayehu Tegenu, into allegations of mismanagement of loans, favoritism and impropriety on the part of loans recipients. Close to 3.3 billion Br in loans was said to be injected into commercial farm investments.

The report alleges that the investors misused the money for investments other than commercial agriculture.

The report flared controversy amongst investors. It disclosed that out of 229,755ha of land leased by commercial farm developers in eight weredas of the Gambella Regional State, only half of them are in operation.

Shiferaw will now look after the bank, which suffers from a high percentage of non-performing loans. They include over 50pc from a total of 11.8 billion Br loans and advances it has made in 2015/16. Much of the NPL comes from its financing of the manufacturing sector, whose share of non-performing loans reaches close to 60pc. The share of the agricultural sector in defaulted loans is less than 15pc, according to company sources.

Along with the outgoing board chairman of DBE, former board members including Redwan Hussien and Tolossa Shagi who has been sent overseas as an ambassador are being replaced.

 

 



By DAWIT ENDESHAW
FORTUNE STAFF WRITER

Published on Dec 27,2016 [ Vol 17 ,No 869]


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