Welkessa
Welcome
Login / Register

Business and Economy


  • Bunna Bank to Get New CEO

    Bunna Bank S.C is set to endorse Negusu G.Egziabher as its new CEO after the board of directors selected him from three potential candidates. The Bank announced Negusu’s appointment on Tuesday, February 7, 2017. Negusu, the former president of Lion International Bank S.C, was selected out of three candidates who applied for the position. The other candidates were senior bankers from Awash International Bank and Nib Bank.

    “All we have left to do is negotiate benefits with the new CEO,” Tibebu Eshetu (Eng.), chairperson of Bunna’s Board told Fortune. “Then the selection will be endorsed by the board and sent to the National Bank of Ethiopia.”

    Negusu will be Bunna’s third CEO, following Negede Abebe and Eshetu Fanatye, who were the founding and second CEOs of the Bank respectively.

    Sources close to the selection process told Fortune that Negusu’s appointment was not unanimously decided.

    CEOs in the banking industry need to fulfill the criteria set by the National Bank, which directs that all people nominated to be CEOs should have at least eight years of banking experience, with half that time spent in a managerial position. Negusu has close to two decades of experience in the banking industry.

    He spent 15 years at the Commercial Bank of Ethiopia (CBE) in different positions, including vice president. He has a Bachelor’s Degree in economics from Addis Abeba University (AAU) and a Master’s Degree in Business Administration from Greenwich University, England. His latest post was as president of Lion Bank, where he worked for three years. He was then replaced by Getachew Solomon, Lion’s current president, in 2014.

    During Nigusu’s tenure, Lion saw its profits shoot up from 75.4 million Br to 127 million Br. He left the Bank for personal reasons. Bunna’s former CEO Eshetu, resigned from his position as of October 28, 2016, citing health concerns. His assumption of the position at Bunna came following the resignation of the former CEO, Eshetu. However, some sources who work at the Bank connected his departure to his contentious relationship with the board

    Prior to his resignation Eshetu was on sick leave for almost five months following a car accident that put him in hospital.

    At the time, Tadesse Chinkel took over as acting CEO. Tadesse has worked for Bunna for the past eight years and has almost four decades of experience in the industry. He has served as interim CEO three times: during the departure of Bunna’s first CEO, while Eshetu was on sick leave after the car accident, and after Eshetu’s departure.

    “I don’t know why the board took so much time choosing someone,” said a senior manager at Bunna. “It would be better for Bunna to look at recruiting from within instead of looking outwards.”

    “There are people who are capable of filling the post,” the manager added.

    Established in 2009, Bunna currently has over 107 branches. Bunna controls around four percent of the total income of all the private banks. The Bank currently has around 11,000 shareholders and a paid up capital of 760 million Br.As of June, 2016 the Bank reported a profit after tax of 187 million Br, a 40pc growth from the preceding year.

    Source: addisfortune

    Read more »
  • EthiopianAirlines bags record high profit of 6 bln birr

    Africa’s largest and fastest growing airline, Ethiopian Airlines, has made a record high net profit of six billion birr (273 million dollars) in the 2015-2016 fiscal year ending June 2016.

    Ethiopian Airlines Group CEO Tewolde Gebremariam told The Reporter in an exclusive interview that the airline registered record high operating revenue of 55 billion birr and a net profit of six billion birr. The revenue increased by 10.3 percent while net profit has shown a whopping increase of 70 percent.  In the 2014-2015 fiscal year, the airline made 49.4 billion birr revenue and a net profit of 3.5 billion birr.

    In the 2015-2016 fiscal year Ethiopian transported 7.6 million passengers and 270,000 tons of cargo. “It was a very good year for Ethiopian,” Tewolde said.

    The CEO said that the 2015-2016 was a challenging year for the African airline industry. “Because of the decline in oil price, demand for air travel has decreased. Our revenue from oil exporting countries was less,” he said.  The economies of oil producing countries like Nigeria, Angola, Cameroon, Gabon, Equatorial Guinea, Chad, Congo-Brazzaville, Sudan and Egypt were seriously affected by the sudden decline of oil price in the global market.

    Tewolde said the more difficult challenge was the shortage of foreign currency created in those countries particularly in Nigeria, Angola, Sudan and Egypt as a result of the oil price decline.   

    “Right now we have more than 220 million dollars in local currencies in those countries. Mainly, in Nigeria, Angola, and Sudan and we have a small amount in Egypt. We have in total 220 million dollars in local currency trapped there for more than a year. You can imagine what that means on our liquidity, cash flow because more than 70 percent of our expanses are in US dollars. So that has created a very strong challenge for the airline,” Tewolde said. 

    Ethiopian is not the only airline which is unable to remit its sales from these countries. Several other African and foreign carriers are unable to repatriate their funds.  According to the International Air Transport Association (IATA), 18 African governments have a total of 1.4 billion US dollars blocked funds. Nigeria has 339 million, Egypt 310 million, Angola 190 million, Sudan 250 million and Algeria 125 million dollars in blocked funds. The new director general and CEO of IATA Alexander de Juniac told The Reporter that IATA is pushing governments to release blocked funds due to the shortage of foreign currency caused by commodity market crash.  “We are pushing governments to organize the repatriation of airlines blocked funds. We are trying to be able to negotiate plans to repatriate funds,” Juniac told The Reporter.

    Junica said that IATA, in collaboration with member airlines, was able to reduce the amount of blocked funds in Nigeria and Egypt. He said IATA is closely working with the governments of Nigeria, Egypt, Angola and Sudan, the four countries which hold the majority of the blocked funds.  The African Airlines Association (AFRAA) is also lobbying with the African governments to release the airlines blocked funds.     

    Tewolde told The Reporter that the recent political unrest in Ethiopia did not that a significant effect on the airline. “We are talking about 2016 and the fiscal year ended in June 2016 and by then we have not felt the impact of the unrest.”

    Tewolde said that since the airline’s 70 percent traffic is transit the impact of the political unrest was minimal. “Of course it had an impact but not that big. Because as you can see our revenue grew, profit grew, because 70-75 percent of our traffic is transit. And I think the effect is on this year than on last year. This year we have seen slight reduction but it is not that big. We have noted a small reduction on our traffic to Ethiopia. But overall I would not say it has affected us very much.”

    The competition coming from non-African carriers particularly that of Turkish and mega Gulf carriers is becoming stronger than ever before. “We have never seen such a fierce competition. We are at a price war. It is very frustrating.”    

    According to Tewolde, despite all the challenges, Ethiopian managed to register a remarkable financial performance in the reported period. He attributed the success to the dedication, hard work and commitment of the airline’s employees and strong strategic and operational leadership by the management team and the board of directors.

    Last December IATA disclosed that African carriers made a loss of 900 million dollars in 2015 and close to 800 million dollars loss in 2016. According to IATA, 2017 is going to be another year of loss for African airlines. IATA‘s latest market forecast indicates that African airlines would lose 800 million US dollars in 2017.

    Zemedeneh Negatu, a leading African aviation transaction adviser, lauded Ethiopian’s financial performance.  “This is a remarkable performance,” Zemedeneh said.

    Zemedeneh, who advised airlines across Africa including RwandAir, Ethiopian Airlines, Virgin Atlantic’s Nigerian Subsidiary, Virgin Nigeria, said that the overall African airline industry is in a bad shape. “The Government of Nigeria this week took over Arik Air (a private airline in Nigeria) because of mounting debt.  South African Airways (SAA) has been making loss for many years now. They have changed CEO and board chairman several times in the past five years. Kenya Airways (KQ) has not made money in the last three years. SAA and KQ would have been out of business by now has it not been for the millions of dollars subside they receive from their governments,” he said.

    “By contrast Ethiopian Airlines has grown rapidly with a very strong balance sheet. They are acquiring state-of-the-art aircraft like Dreamliners and Airbus A350, the first in Africa. They have a very young fleet of 82 aircraft with an average age of five years operating to more than 90 international destinations. It continues to be a pioneer,” he said.

    Zemedeneh said Ethiopian is a well managed airline. “It has a capable and focused management with a clear vision, more importantly capable of executing its vision.”

    He went on to say that Ethiopian has a solid management and dedicated staff that can deliver. He also attributed the success of the airline to the management independence the government granted. “The government does not intervene in the day-to-day operations of the airline. Though the airline is wholly owned by the state, it is purely run commercially. It is managed as an independent business entity.”

    He also said that Ethiopian is benefiting from its strong operation to Asia, which was launched many years ago a head of many other international airlines. He mentioned that Ethiopian is one of the only two airlines from Sub-Saharan Africa allowed by the United States Federal Aviation Administration (FAA) to fly to the United States. 

    Source: The Ethiopian Reporter

    Read more »
  • Definition of Entrepreneur

    Definitions by different scholars, sources and their views is described below for your reference.

    Entrepreneur is one who assumes the risk and management of business. Webster dictionary

    Entrepreneur is a person bearing risks of profits (loss) in fixed price contract with the government. The 17th century concept.

    Entrepreneur is a person bearing risks is different from one supplying capital. Richard Cantillon, 1725.

    Entrepreneur is a person bearing risks, planning, supervising, organizing and owning. Beaudeau, 1797.

    Entrepreneur is separated profits of an entrepreneur from profits of capital. Jean Baptiste Say, 1803.

    Entrepreneur is distinguished between those who supplied funds and received interest and those who received profit from managerial capabilities. Francis Walker, 1876.

    Entrepreneur is an innovator and develops untried technology. Joseph Schumpeter, 1934.

    Entrepreneur is an economic man who tries to maximize his profits by innovations. Haggen, 1958.

    Entrepreneur is an energetic moderate risk taker. David McClelland, 1961.

    Entrepreneur maximizes opportunities through systematic innovations. Peter Drucker, 1964.

    Entrepreneur takes initiative, organizes some socio-economic mechanisms, and accepts risk of failure. Albert Shapero, 1775.

    Entrepreneur seen differently by economists, psychologist, business person and politicians. Karl Vesper, 1980.

    Intrapreneur is an entrepreneur with an already established organization. Gifford Pinchot, 1983.

    Entrepreneur is the process of creating something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychological, and social risks and receiving the results- rewards of monetary and personal satisfaction. Robert Hisrich, 1985.

    Entrepreneur is a person starting a new company who takes on the risks associated with starting the enterprise, which may require venture capital to cover start-up costs. Indigo Dictionary of Business, 2002.

    Entrepreneur is an individual who undertakes (from the French entreprendre to undertake) to supply a good or service to the market for profit. Entrepreneurs will usually invest their own capital in a business and take on the risks associated with the investment. The view of capitalist is that the initiative of entrepreneurs creates a society’s wealth and that governments should therefore establish conditions in which their activities are encouraged. Oxford Dictionary of Business, 2002.

     

    Read more »
  • Advantages of Starting a Business at Home

    There are mainly three places where you can start your business. These are leased space, virtual office and your home. Leased site is where you rent a room or building to start your business. You use virtual office when doing online jobs. Online jobs do not require a certain location. You can do it anywhere if you have computer and internet connection. You can take your office anywhere. You will have flexible working place.

    You can use your home for starting a business if you have ample space. Most small businesses are started at home. This is because it involves less cost and is free of hassles.  There a number of advantages of starting a business at home. In the following section we are going to see the advantages of starting a business at home.  

    Friendly Environment: Your home is the place where you spent most of your time. You like staying at home because your home is more or less equipped with the necessary resources. You get comfort in doing a business at home as same is environmentally friendly.

    Family Time:  When starting your business at home you will get more time for your family. You will be in close contact with your kids as there is no distance between your home and work. By doing at home you will have the opportunity to take care those who need your help. You will also have enough time for your personal issues.

    Proximity: There is no place gap between your work and home. You are free to contact your family at any time due to short physical proximity. This gives you comfort for child care and elderly care. You will be easily accessible to your kids when working at home.

    Business Attire: You do not need to have formal office clothing. This saves money on clothing and dry cleaning. When you work at home you are free to wear anything you like.

    Cost Saving:You will also spend less for automotive maintenance and spare part. You also save cost for fuel, car wear and tear, road taxes and parking fee. This is because of there is no or less travel to work.

    Stress Free: When working at home you will have less stress. This is because your work does not require travel. If you do not travel then you will not have traffic stress and tiredness even before starting your work.

    Improved Health: You will have enhanced health by working at home. This is because you eliminate the stress and tiredness that arise due to long travel. You will get improved mental and physical health by working at home.

    Working Hours: When you start a business at your home you are free to work long hours. You can do even in the late evening. You will not have any travel problem in the evening. You just can go to your bed when you are tired.

    Proper Eating: When working at home you will eat at your home. You will have healthy eating. Eating proper diet will make you free from diseases. If you are free from diseases you will save your medical expenses.

    Watch Your Home: When starting a business at home you will have the opportunity to look at your home. You do not need to employee anybody to care your premise.

    Concentration: Your home is quieter than the downtown. In downtown there are many people working in one building or place. There will be huge chaos when working at crowded place. This will diminish your concentration and focus and in turn your productivity. By working at home you will have full concentration and focus. This will result in increased productivity.

    Less Investment: When starting a business at home you will require less investment than doing in a leased site. This is because you will not have office rent expense. In addition to this you may not require additional office furniture as you are going to use your personal items.

    Long Travel: There will not be any long travel when working at home. This will save your time and travel expense. You will not face any traffic problem.

    Work-Home Balance: Working at home gives you the benefits of work-life balance.  

    Increased Productivity: You will have increased productivity due to less travel and stress. You will not have tiredness due to long travel. You do not waste your time for traveling.

    Therefore, consider the above points as advantage when starting a business at your home.

    Read more »
RSS