News City Admin housing debts fluster CBE collection officers
April 12, 2025
Finance Ministry pays first installment of 845 billion birr in SOE debts
The Addis Ababa City Administration continues to struggle in financing its public housing projects, managing to repay just 1.9 percent of 25.85 billion birr in bond credit due to the Commercial Bank of Ethiopia (CBE) over the first three quarters of the fiscal year.
A report submitted to Parliament by executives of the state-owned banking giant reveals CBE collected 149 billion birr in loan payments between July 2024 and March 2025, with the public sector accounting for only 28 percent despite being a substantially larger borrower than the private sector.
Loans given to the Addis Ababa City Administration for extensive public housing projects are among the items on CBE’s credit portfolio contributing to a “low performance in collecting debt from the public sector”, according to the report submitted to a parliamentary committee overseeing state-owned enterprises (SOEs).
In May 2022, an assessment conducted by a group of experts from the Addis Ababa Housing Corporation and CBE concluded that the Corporation has the capacity to repay its 54 billion birr debt to the financier.
The loans were used to finance the construction of condominium housing over the past several years. At the time, the Corporation was overseeing the construction of 139,000 units with an additional 80,000 in the pipeline.
Six months after the assessment was made public, the City Administration transferred close to 26,000 units to the winners of a draw from a pool of candidates. Around the same time, the Corporation also secured 2.5 billion birr in additional credit from the CBE to complete 30,000 outstanding units.
Nearly three years later, the Corporation is among the long list of unprofitable state enterprises who collectively owe the CBE close to one trillion birr.
The Liability Asset Management Corporation (LAMC), formed to soak up debt from other SOEs, has unsurprisingly failed to repay hundreds of billions on their behalf, leading the federal government to assume ownership of the debt in November 2024 through the ratification of a bill authorizing the transfer of 845 billion birr in SOE debt and accumulated interest to the Ministry of Finance.
The Ministry is liable to repay the debt over the coming 10 years. Reports indicate it paid its first installment of 38 billion birr to CBE in January.
Still, the bank’s performance report indicates doubts over other debt, such as that owed by the Addis Ababa City Administration.
Meanwhile, the Administration is seeking to partner with the private sector in its housing schemes. In February, Mayor Adanech Abiebie announced an ambitious initiative, launching the construction of a staggering 13,752 new homes in Kazanchis in partnership with a private developer.