Tewodros Tilahun Managing Director of the Ethiopian Insurance Corporation		Kidane Nikodimos President and CEO of Wegagen Bank

The growing presence of the private sector in the Ethiopian economy has served to revitalise two industries in particular: insurance and banking.

The Ethiopian insurance sector is currently made up of nine insurance companies and is still dominated by the state-owned Ethiopian Insurance Corporation. Established in 1976, it held a monopoly until 1991, when the sector was opened up to private companies. The corporation’s market share promptly dropped from 100 percent to 48 percent in 2001 leading to a wholesale restructuring process, which is now starting to bear fruit.

The result has been a reversal in the corporation’s recent fortunes, which its Managing Director, Tewodros Tilahun, puts down to company’s financial strength and the effective utilisation of its well-trained personnel. “Clients are once again putting their trust in us and our market share is on the rise, which we hope will continue,” he says.

Certainly, the trend is positive, as demonstrated by the B-(Strong) rating awarded by the African Insurance Corporation Credit Assessment Scheme, which is supported by UNCTAD (United Nations Conference on Trade and Development) and Standard and Poor’s London. “The fact is we have been rated amongst the best 15 companies in Africa,”states Mr Tilahun.

With 29 branches and plans to grow, the Ethiopian Insurance Corporation’s goal is to further consolidate its leading position in the local market before expanding into regional markets.

Another institution that has also undergone a recent restructuring is Wegagen Bank. One of Ethiopia’s leading banks, it is doing its best to tap into Ethiopia’s emerging entrepreneurial spirit.

Founded in 1997, Wegagen Bank prides itself on being the only bank in the country with a fully computerised network, a commitment to technology that appears to have paid immediate dividends. “During the last fiscal year our profit grew three-fold compared to the previous year,” declares Kidane Nikodimos, the bank’s President and CEO.

Although the country’s six private banks have only acquired 20 percent of the market share since liberalisation, the future is theirs for the taking. As Mr Nikodimos says, “The private banks have to be in a position to serve the increasing numbers of entrepreneurs and grow in line with the country’s increasing economic activity.”