Tigrai Online
May 08, 2012
The state owned Commercial Bank of Ethiopia (CBE) is to open a second branch in Malakal, the second largest city of the newly born country Southern Sudan. Malakal is a capital of Upper Nile State and the only city that has an international airport after the capital Juba.
Malakal, 650Km North of Juba, is known for its navigable rivers, White Nile, connecting Juba and Khartoum as well as Sobat with Gambella of Ethiopia. Though the city is not well-connected by road network, it has a reliable connection with North Sudan and Ethiopia on dry season.
In addition to the existing road that connects Malakal with the border town of Kurmuk, another road is under construction to link Jekou and Jikou towns, which share border with Ethiopia. Malakal’s closeness to North Sudan and Ethiopia has attracted a significant number of Sudanese from the North, Ugandans, Kenyans, Eritreans and Ethiopians, who are engaged in various business activities.
The Bank’s move to the area aimed at tapping this business boom in the area, according to a banker who works at CBE’s Juba branch, who requested anonymity because he is not authorized to talk to the press.
Despite the city’s emergence as business hub, there are only three banks operating in Malakal: Nile Commercial and Ivory (both local banks), and a Kenyan bank, Equity. CBE will be the second international bank to open in the town when it starts operation in a month.
“Thirteen staffs have already arrived in Juba,” the banker told Fortune. “We have built the office that will host our branch.”
CBE is the only Ethiopian bank with an international branch in operation in Juba, opened in September 2009. It could have been its second international branch if its first branch opened in the 1950s in Djibouti remains in business.
Swarmed in non-performing loans, the branch in Djibouti was closed in 2004.
CBE’s South Sudan offshoot, CBE-Sothern Sudan Ltd., was opened three years ago with a paid up capital of 15 million dollars; its managers had sought to mobilize 100 million dollars in deposit from what is now 4,000 depositors.
“Most of our clients used deposit and money transfer services,” the banker said. Ethiopian, Eritrean and Sudanese are topped the list of these clients.
Nonetheless, due to the dollar shortage that hit South Sudan after the country shut down its oil pipelines in January 2012, CBE saw a decline on money transfers. In April 2012, officials in South Sudan took decision no longer to use the pipelines in North Sudan to export oil, a move that has escalated tension and military confrontation between the North and the South. Subsequently, the exchange rate in South Sudan hovered at 4.7 South Sudan pound (SSP) against a dollar, due to banks receiving 10pc to 15pc of foreign exchange allocations of previous level.
Source: Addis Fortune Read More
