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- 🍲 Tasting The Credit Soup
Welcome to the 69th 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:
⚡ BUZZ: The Credit Card Gets Added To The Menu
✈️ From No Class to Economy Class? The $10 Billion New Airport
🗝️ The Key Takeaways
Thanks for reading!
BUZZ: A New Dish For Ethiopian Finance
Finance/Technology
While fuel and gouda are imported, another product that seems to be flying in from the outside is financial technology.
We’re not sure what the in-flight movie was but we’re pretty confident that Cloud 9 was the seating section with a window seat overlooking the credit-less financial markets.
LC issues? We don’t think so, after all, these services are bought and used by financial institutions and those guys practically use our cash as pillows every night!
🧐 What Happened?
Seems like two companies became instant friends while bonding over their love of fintech.
SanuPay (out of the UAE) and OpenWay (From the country that came up with Waffles) teamed up to advance financial services experiences in Africa.
The twosome already have established track records: SanuPay deployed virtual cards and digital wallets in Rwanda while OpenWay helped Vietnam’s Eximbank set up a modern card management system.
Their new venture will see them:
Help banks and institutions alike by issuing more than 4 million debit and prepaid cards
5,000 international credit cards under Visa and Mastercard
As well as setting up 10,000 point-of-sale (POS) terminals and 200 ATMs nationwide.
Seems like a huge undertaking, like trying to finish a delicious በየአይነቱ all by yourself!
But there’s a smell of confidence in the air and the fact that credit cards are amongst the agenda should be exciting.
🔮 How Would This Change Things?
You’ve probably heard the phrase ‘Just take my credit card’ in movies. With actors flinging their plastic cards in the air as if they were tickets to heaven.
Well, maybe they kinda are close to heaven. Credit cards are issued by financial institutions, enabling card holders to spend money that really doesn’t belong to them.
It’s a tool that tests your discipline: every time you spend, you owe. Paying back shows your discipline. As the name suggests, it’s credit, a loan, which size depends on your trustworthiness to pay back (Also known as a credit line)
📋 Is Ethiopia Ready For This Test?
Well, we’re about to find out. Oromia Bank is tipped to be the first one to leverage the SanuPay/OpenWay partnership and start issuing credit cards.
There are so many questions we want to ask: Do customers need an Oromia Bank account to qualify? Is the credit issued by the bank itself? What is the interest rate? What benefits will you get?
(A loyalty partnership with Sheba Miles is on the books just FYI)
But all good things come with a warning label. That label might be invisible right now (T&C - Terms and Conditions are not always accessible when Ethiopian businesses sell you products) so risks and liabilities would probably need to be closely scrutinized.
Otherwise, credit can turn into debt quickly, with defaults ballooning and borrowers hard to reach when repayment comes knocking!
Big Picture
Credit Cards are the next frontier for Ethiopian finance.
It’s a gateway of opportunity for the credit market, a market that’s virtually inexistent.
A credit card can be a less overwhelming introduction to credit products: a physical card, just like an ATM card, that lets you borrow on the go.
The times ahead are exciting but the excitement should be taken with a grain of salt. Credit represents risk which, if not treated properly, could cause the whole credit market to collapse under its own weight.
Having said that, those educated on the risks and rewards shall prevail - like the subscribers of ፍራንክ Digest 😉
ፍራንክ Picks
🗞️ In the news: CBE coughs up 1,000,000,000 dollars
Ethiopia’s $10 Billion Mega Airport Project is Cleared for Takeoff
Finance
If you’ve flown through Bole Airport lately, you don’t need a consultant’s report to tell you what’s wrong. It feels dated, cramped, and well behind the glossy, duty-free wonderlands popping up elsewhere in Africa and the Gulf.
The queues stretch longer than the patience of a passenger whose flight has just been delayed, the terminals feel like they’ve missed a facelift or two, and the whole place creaks under the weight of too many travelers and too little space.
And so it goes, Ethiopian Airlines is thinking big.
The plan is a $7.8 billion Bishoftu Mega-Airport: four runways, 270 aircraft parking slots, a first-phase capacity of 60 million passengers a year (expandable to 110 million), and cargo handling of 3.7 million tonnes a year. Possibly even an express railway linking the new airport to the capital. Let’s just pray the airport express train doesn’t inherit Addis’ light rail’s favorite feature: standing still.
For context, London Heathrow’s terminal expansion project is clocking in at over $60 billion. Meanwhile, we’re building an entirely new thing for $10 billion. Are we upgrading our airport from no class to economy class? Who knows, maybe we should send them our contractor’s number.
Nevertheless it’s an ambitious project, that much is clear. But beneath the renderings and brochures, the question remains: how exactly will we pay for it?
Now that, folks, is somewhat unclear.
How to Pay for a Dream Runway
The African Development Bank (AfDB) has taken the role of financial broker, better known as ደላላ in local circles. It has pledged $500 million upfront, and more importantly, promised to source $7.8 billion from global creditors.
Meanwhile, Ethiopian Airlines is putting in real skin: 20% equity, or about $2 billion. The rest will come from commercial banks, development institutions, and anyone AfDB can convince to back the deal.
So far, the model relies more on ambition than signed checks. The financing structure is clear in outline, but thin on detail. Who will actually foot the rest of the bill remains to be seen.
The Numbers Behind Ethiopian Airlines
What makes this financing plan believable is Ethiopian Airlines itself. The carrier has long been Africa’s aviation giant, with the kind of financial muscle that makes lenders listen.
Revenue in 2024/25: $7.6 billion (up 8% from the previous year)
Passengers carried: 19 million (up 11%)
Fleet size: ~156 aircraft, including Airbus A350s and Boeing 787s
Destinations: 161 passenger and 68 cargo routes worldwide
Vision 2035 target: grow to 65 million passengers, 271 aircraft, and 3 million tonnes of cargo annually
This isn’t a fragile national airline hanging by a thread on government subsidies (Read: Kenya & South African Airways). It’s a profitable, expanding, and ambitious company, the kind you want anchoring an airport project.
Beyond Jobs: What’s at Stake
The easy sell is jobs, and yes, thousands will be created. But the impact could potentially go further:
Trade hub: With huge cargo capacity, Bishoftu could strengthen Ethiopia’s push to become East Africa’s logistics center.
Tourism and transit: More direct routes and shorter layovers could turn Bishoftu/Addis into a genuine stopover city.
Investment magnet: Airports attract ecosystems: think warehouses, logistics parks, even tech firms.
But there are risks: the debt load, the complexity of managing a mega project, and aviation’s vulnerability to shocks like pandemics, fuel spikes, or recessions. The country could just as easily end up with delays and debt as with prosperity.
GERD vs. Bishoftu: Financing the Big Dreams Differently
This isn’t Ethiopia’s first mega-project. Remember the Grand Ethiopian Renaissance Dam (GERD), which is estimated to have cost nearly $5 Billion? Its financing was the polar opposite.
GERD was paid for entirely by Ethiopians: bonds, public donations, and even salary deductions.
It was a matter of pride as much as electricity. A unifying national project, financed without foreign lenders.
Bishoftu, on the other hand, is pragmatic. AfDB is both an investor and a ደላላ raising money abroad. Ethiopian Airlines puts in $2 billion, but the bulk rests on global creditors. It’s less patriotic, more financial engineering.
The Big Picture
The new airport is Ethiopia’s chance to cement itself as Africa’s aviation hub. It could enhance trade, tourism, and investment. But unlike GERD, it depends on external financing, global markets, and debt repayment schedules.
If AfDB pulls it off, Bishoftu could be the launchpad of Ethiopian Airlines’ next growth story. And given Ethiopian’s background, stature and financial footing, this one’s a project that’s likely to takeoff.
Key Takeaways
Financing gap: AfDB is putting in $500m and pledging to raise another $7.8 billion, while Ethiopian Airlines contributes $2 billion. The rest is yet to be locked in.
Ethiopian’s strength: $7.6 billion in revenue, 19m passengers, ~156 aircraft, and ambitious Vision 2035 targets make it a credible borrower.
Contrast to GERD: One financed through citizen sacrifice and pride, the other through global borrowing and financial matchmaking.
Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!
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