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Cash on sale as commodity in Mekelle Town, Tigray

Five billion birr sapped within a week

100 bill of Ethiopian currency (Photo credit : 123fr)

By Staff Reporter

ADDIS ABABA – The five billion birr transferred from the National Bank of Ethiopia (NBE) to banks in Tigray Regional State reportedly paid out fully in a period of one week, sources said. Shortage of cash has deterred the reopened branches in Tigray from giving full service to customers.

The Amharic Weekly, the Reporter, wrote in its business column that customers have not yet been able to get any other than a small amount of money from limited bank branches reopened in Tigray after the civil war.

As per the decision made after the discussion the Premier had with the leadership of TPLF, the National Bank of Ethiopia transferred five billion birr to banks in Tigray Regional State. However, all the money was reportedly disbursed fully within a week. Of the five billion birr transferred to Tigray, Wegagen and Anbessa Banks received one billion birr each while the rest three billion birr was given to Commercial Bank of Ethiopia (CBE).  

One of the district managers of CBE, who requested to remain anonymous said that as the people in Tigray were in problems, his branch did not put restrictions, but rather adhered to the rules of NBE and allowed a 50,000-birr daily release to a customer. He said they had done this with a belief that customers would come back to deposit their money after transactions. However, the situation in the region did not allow that to happen or to reinstate to its normal trend of the business and the cash flowed out has not come back to the banks, the man said.

Of the 24 branches of CBE in Mekelle, all except one are networked. Many of them have now stopped paying out money due to shortage of cash, he said. “Few branches are now supplying the customers with an amount of birr two to three thousands. They draw these amounts from cashes customer companies are depositing in the bank,” he said. Ethio-Telecom, Ethiopian Airlines and other few Total Gas Distributors are the only companies that are depositing their cash from daily sales at the bank, he said, adding that this was the only money the bank gets as cash deposit. 

The source further disclosed that there has emerged an illegal cash flow among the community. He said, “cash is currently being sold as a commodity across the town”. He expressed his concern that unless the concerned body “stops this, it will be a big challenge for the banks”.

CBE has disbursed the three billion birr, which was transferred to it by CBE in five days. Apart from the fact that cash is not coming back to the banks, the customers draw their money and hold it tight as they lost trust in banks, according to our source. If cash management and the normal trade system had been reinstated, the five billion birr would have been sufficient, the unnamed bank manager commented.

Branch Banking Director of Wegagen Bank, Mengistu Tadesse, told the Reporter that though his bank was doing well, the impact of cash shortage witnessed in other banks has affected his bank adversely. “However, as big customer organizations have large cash flow, the bank has not faced an exaggerated problem to reinstate the banking business,” Mengistu said.

Wegagen Bank is working on cash payment based on the rules of NBE, according to Mengistu.

Including Afar and Amhara Regional States, 122 branches of Wegagen Bank were giving services before the civil war. Though these branches were damaged during the war, nine of them have now entered into service in Amhara Region. Of the 112 branches that were operational in Tigray, 87 have been reopened and gone functional, according to Branch Banking Director of Wegagen Bank. 


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