Ethiopian Govt to Issue Bonds to Raise CBE Capital

The Ethiopian government is about to introduce bonds to raise the capital of the Commercial Bank of Ethiopia CBE. The Ethiopian House of People’s Representatives (HoPR) has approved a bill proposed by the government to sell 900 billion birr bonds to pay off the debts of the Commercial Bank of Ethiopia and increase the bank’s capital.

Public development organizations borrowed billions of birr from the bank for the construction of huge projects. Only Ethiopian Electric Power borrowed 191.79 billion birr from the Commercial Bank of Ethiopia, while the Railway Corporation borrowed 80 billion birr. The Ethiopian Sugar Corporation has not returned more than 110 billion birr to the bank. The government proposed the draft because the Debt and Resource Management Corporation, which was established four years ago to manage the debts of the development companies, was unable to raise enough funds.

The draft proclamation that was presented at the regular meeting of the House of Peoples Representatives held on Tuesday is titled “Government Debt Document”. It is mentioned in the draft law that the Ethiopian Commercial Bank’s “heavy debt” is having a “huge impact” on the financial appearance of the bank.

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