'Habibi, Come to Dubai!'

Welcome to the 73rd edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🛣️ From Churchill Road to Sheikh Zayed Road: CBE Heads to Dubai

• 🤝 Profit Sharing: Fixing Ethiopia’s Productivity Problem

• 🗝️ The Key Takeaways

Thanks for reading!

One Small Branch for CBE, One Big Swipe for Forex

Banking

Fresh on the heels of our article two weeks ago Ethio Telecom Packs Its Bags, Ethio Telecom was the talk of the town flirting with expansion into Saudi Arabia and beyond.

Now, the Commercial Bank of Ethiopia (CBE) is tipping its toes outside the nest too. For years, CBE reigned supreme almost everywhere….within Ethiopia. It financed megaprojects and dominated deposits, while private banks played catch-up. But recently, CBE has begun whispering something new: "We’re packing our bags." Strategic expansion? Perhaps. Empire building? Perhaps not.

Whatever you call it, CBE is rolling out a 50 billion birr loan package for Ethiopians abroad, with a focus on remittances, investor loans, and maybe even a storefront in Dubai.

CBE Has Been There, Done That (Sort Of)

Correction time: CBE isn’t brand-new to overseas action.

• It still runs two branches in South Sudan, a remnant of earlier expansion (and contraction).

• It previously had a branch in Djibouti, which they closed after loan losses.

• Now, Dubai and even Washington, DC (also known as the American ደሴ) are on the brainstorming board apparently.

So yes, CBE has dipped its toes abroad before, but the Gulf still feels like a proper international debut, so let’s roll with that.

Diaspora: 50 Billion Reasons to Pay Attention

In Dubai, the bank’s President Abe Sano officially unveiled a 50 Billion birr loan facility targeting Ethiopians living abroad. Think homes, cars, businesses, all on what we imagine are favorable terms. (We’d tell you for sure, but in typical fashion of grand announcements, the details are thin.)

CBE is also packaging tailored savings products, streamlined remittances, and even Sharia-compliant financing through its “CBE Noor” arm. Homes, cars, and business tied neatly into ethical finance.

In short: they’re saying, “Bring your birr home! Send your Dirhams to Papa! But don’t forget to fill three forms, get two signatures, and wait for the system to be back online.”

What’s in it for CBE?

• Diaspora loans meet diaspora return: CBE wants to offer mortgages, car loans, and investment financing to Ethiopians abroad. An upgraded “diaspora account” we hope one can actually access and make use of.

• Forex stabilizer: They’re pulling in foreign currency formally, meaning less hawala runs, more official channels.

• Brand-building in Dubai: Seeing is believing. Opening even one branch is a trust signal for Ethiopians with diaspora dollars looking to invest back home. A branch also means legitimacy, especially for an audience that has relied on money couriers or informal remittance links

• Regional ambition, local roots: It mirrors Ethio Telecom’s plans; a low-risk high reward playbook.

Frank’s Take

As Donald Trump would say, the engineers of this move might well have “Very, Very Large Brain” and this could pay off “Bigly”.

We don’t know how large their brains are. However, make no mistake: the Ethiopian banking sector is under pressure…Bigly.

Never mind the introduction of Foreign Banks in the market being around the corner. Private lenders and CBE alike are scrambling to meet local loan demand as they are forced to park deposits in low-yield government bills. The result? Lending is tight, transfers between local banks drag on, and businesses and families wait in line for basic credit access.

So with Ethiopia’s banks stuck in a liquidity crunch, would the smart money have been to back up, fix the inside, and make lending here easier before chasing Gulf branches?

Let’s not ignore that many Ethiopians at home are also waiting for a break.

That said, let’s give credit where it's due. If CBE can lure official remittances away from hawala channels, it’ll help plug the forex leak and stabilize reserves. Easier diaspora borrowing possibly means more property investment, businesses, and maybe small enterprises back in Ethiopia.

If CBE balances both modern diaspora outreach and liquidity for ordinary Ethiopians, it might be pulling off something clever.

Key Takeways

1. CBE is no stranger to international branches; South Sudan remains, Djibouti has faded, Dubai awaits.

2. The bank launched a 50 billion birr diaspora loan package, plus tailored savings, remittance, and Shariah-compliant products.

3. It’s a good move (possibly, maybe?): building forex inflows, diaspora trust, and a platform for meaningful regional presence.

ፍራንክ Picks 

🚶🏽 Event: Assessing Ethiopia’s Telcom Market @ Skylight [Oct 1st, 2025]

🗞️ In the news: Kenya’s Equity bank deposits its interest in Ethiopia  

♟️ Innovation: Siren goes off on new ambulance dispatching platform

The Productivity Rant We’ve All Heard

Economy

Every sector has its version of the same rant: “Nobody is productive.”

Construction sites? Crews standing around like they’re waiting for a DJ to drop the beat, one guy holding a shovel, three guys supervising the shovel.

Legend has it that when Chinese contractors first came, they were so fed up with crews leaning on shovels that they literally cut the shovel handles in half.

And it’s not just construction. Walk into a government office to do whatever, and you’ll find people working in slow motion everywhere you look. By the time your file moves from desk to desk, you’ve aged a fiscal quarter.

It’s easy to blame laziness, but the problem is often deeper. If a company grows big, the worker’s life doesn’t change. If pay is fixed no matter how hard you work, why sweat? When a company’s profits don’t make it past the boardroom, why should the person on the ground floor treat deadlines like they matter? So much for motivation.

The real question is: how do you make workers feel that when the company wins, they win too? How do you make someone think, “If I finish this project faster, it might pay for my kid’s school fees,” not just, “Cool, maybe I get to leave 15 minutes early”?

What the Research Says

And yes, there’s data to back this up:

• Incentives matter: Studies in Ethiopia’s textile and garment sector show that yes, labor and raw materials are key, but incentive systems (read: how people are rewarded) are among the strongest drivers of productivity.

• Living wage gaps hurt motivation: There’s a big gap between what wages are and what employees need to live decently. The minimum wage for federal public sector employees is ETB 6,000/month. In many sectors, wages are so low workers juggle side hustles just to survive. That means showing up tired, distracted, and ready to jump ship the moment something better comes along.

• Tools, processes, and basic infrastructure also matter: You can’t expect world-class output with broken machines, missing supplies, or systems that crash every 20min. If the workplace is designed to waste time, guess what? Time will be wasted.

The conclusion is hard to escape: it’s not just a skills gap, it’s an alignment gap. Workers aren’t lazy, they’re rational. It often comes down to “what’s in it for me?” If effort doesn’t move their paycheck, why would they hustle?

What Profit Sharing / Shareholding Brings

Profit sharing or giving employees a share in the returns from their efforts does a few things:

• Creates ownership mindset: If workers see that when profit rises they directly benefit, behaviors shift: more care, fewer waste, more innovation.

• Reduces turnover & absenteeism: If your job offers more than just salary, people are likelier to stick around. Training investment pays off.

• Improves morale and reduces friction: Far fewer “that’s not my job” fights if everyone feels they reap rewards and losses somewhat collectively.

Why it’s still rare:

• Many Ethiopian firms (especially small/medium) lack stable enough profits to guarantee profit sharing without risk.

• High inflation, uncertain costs (fuel, transport, inputs) make profit volatile. Hard to promise something reliably.

• Weak systems of transparency: distrust if profit calculations are opaque.

• Institutional & legal limitations: shareholding by employees not always enabled or might be complex; tax/benefits implications unclear.

Rare Examples

• Zemen Bank: Employees are shareholders. The better the bank does, the higher the dividend, the better the employee’s bottom line. Given this cycle, the higher likelihood of employees going the extra mile. This is somewhat widespread among the local banking sector, and it shows shareholding works locally.

• MIDROC: They just cut a ETB 764 million bonus check to its staff. Even with 79,000+ employees, that’s a fair ~ETB 9,500 bump (Though by their own admission, some 588 executives pocketed a cool ETB 100k - ETB 500k each, but that’s besides the point here). Also raised wages, showing that sharing profit or surplus isn’t only possible in theory.

These aren’t perfect, but they are examples other businesses could follow.

Practical Steps

Here’s a blueprint for any company (small, medium, large) to try this:

What This Could Look Like In Ethiopian Life

This is as much about feel-good bonuses as it is downright economics. The efficiency wage theory tells us paying a little more can actually save money by cutting turnover and increasing effort. When employees think like owners, they act like owners. This should mean less theft, less wastage, more initiative.

And in a country where slow service is practically a slogan, aligning pay with performance might be the cheapest productivity upgrade we have.

Frankly Speaking

Lack of productivity isn’t a character flaw as much as a problem of alignment. Pay people like passengers, they’ll sit back and enjoy the ride. Pay them like partners, and suddenly they’re helping drive.

MIDROC and Zemen Bank are rare lights, showing this path isn’t fantasy. Profit sharing, shareholding, performance pay - whatever form it takes, it’s time to stop pretending that motivation grows on pep talks alone. The companies that figure this out will find their biggest competitive edge isn’t technology, or cheap labor, or imported machines. It’s a workforce who feels invested in the company’s future.

It won’t be perfect overnight. But the first company that makes this transparent, reliable, and fair will realize that productivity rises faster than their costs.

And that, dear readers, is how you bake a better cake for everyone.

Key Takeaways

1. It’s not laziness, it’s math: If effort doesn’t move the paycheck, why hustle?

2. Sharing wins boosts output: Profit sharing and ownership turn workers into partners, not passengers.

3. Clarity is king: Define profit, show the math, and watch productivity climb.

Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!