It was a crude moment for the Commercial Bank of Ethiopia (CBE) - the biggest bank in Ethiopia, whose assets are pushing on half a billion dollars - had to be assisted by the much smaller private banks to foot the bill for the Ethiopian Shipping Logistics Services Enterprises (ESLSE) to the Djibouti ports. The amount was 15 million dollars, and a quota was put on the banks according to their capacity. They had to come up with the money in a mere three days.
The crisis - if one chooses to call it so - is a case in point of Ethiopia's lack of foreign currency exchange. Ethiopia's most haunting, most prevalent problem since at least a decade. It is only getting worse. In fact, not long ago, Prime Minister Hailemariam Desalegn himself claimed that the forex crunch would probably last the state another two decades.
This could be shocking, indeed, if it was not for the fact that Ethiopia has more or less gotten used to. There has never been a time, at least in the life span of the current administration, where export has not been far lower than import, exasperating the forex crunch. Ethiopia has friends around the world, they use the country as a destination for aid and loans but, exasperatingly, for exports too. This is an especially stark occurrence when it comes to one of Ethiopia's closest allies, China, which buys over 200 million dollars worth of goods from the country, but exports many times that amount.
And such an annoyingly constant phenomenon is making the country more and more socialist by the day. As the amount of foreign currency exchange is significantly small, the government has been forced to designate sectors it deems more important, and thus deserve foreign currency more quickly. The ESLSE, which is of prime importance, an undeniable truth, is one such enterprise whose foreign currency woes are prioritised when it needs some. The manufacturing, agriculture and health are other sectors that are prioritised for when they need forex to acquire machineries, fertilisers and medicines, respectively.
On the other hand, businessmen and many private institutions, outside the more prominent, "socially beneficial", pro-poor sectors of the economy, are left to their own devices until at least some forex has been made way for. These sectors are not considered of the 'national importance', at least not directly. A strikingly sad occurrence, but an entirely obvious one, in a country that never considered the private sector on the same footing as the large state-owned enterprises that have monopolized shipping, the financial sector and the airlines industry.
For the government, the whole attitude is a cliché. It goes hand in hand with the 'development state' mentality, where the government is the chief means of economic growth, not the private sector or individuals. Prioritizing such sectors is but an obvious character of such a government as that of the Revolutionary Democrats - it would have been stranger if the case had not been so.
But it is indeed strange why the banks are not more annoyed.
Does such a directive not undermine their corporate interest? And how does the whole incident affect customers' trust in the banks, especially when they find them with even less forex? Or is it that customers and the banks are so patriotic, the 'national importance' trumphs the corporate or individual one?
Of course, on the other hand, the government has never been entirely too harsh on the commercial private banks. After all, they do exist in unruffled waters, where competition is easy (as it is with each other) and growth is almost exclusively on a steeply vertical trajectory. Their success could be tracked back to the fact that there is a population that is in large numbers growing its income and becoming banked.
There are a total of 16 private banks for a potential 100 million local customers. And even though the CBE swigs a large portion of this customer base, the bank's owner - the state - protects the private banks from more stern competitors, like the latter. It is unlikely that foreign banks would stay out of the Ethiopian financial sector for long, in the meanwhile, the private banks are being allowed to grow and prosper.
Another such incident that should have irritated the private banks more was the 27pc five-year government bonds they are required to buy for every gross loan disbursements. Yet, another example of the 'national importance', they are being asked to fund infrastructure projects. But much in the same way, even though there are complaints here and there, it is not in the volume and intensity it should actually be.
Such directives the private banks have to live with, and the banks' seemingly nonchalant response to them, signify an unwritten agreement. They would take anything from the government as long as it protects them from foreign competition, making them mere followers of the state. They are blocked from innovating and ultimately leading the industry, as their interest is too tied up with the current state of affairs. The National Bank of Ethiopia (NBE), the central bank, is more than a regulatory body in such circumstances, more like a friendly boss, until at least such time it deems the CBE strong enough to compete on the global financial stage.
Christian Tesfaye Is Fortune's Op-Ed Editor Whose Interests Run Amok in Both Directions of Print and Celluloid/Digital Storytelling.