Challenges, opportunities and policy options for effective use to stimulate industrialization. A full history of the currency dates back to the year 1894. It shows how money facilitates transactions by comparing a money system to a barter system. The dates, like the rest of the legend, appear in amharic, the official language of ethiopia. Since a pegged exchange rate does not necessarily represent a currencys true market value, the eprdf replaced the fixed exchange rate system with a floating exchange rate system. Briefly, evolution of money was mainly through commodity money, metallic money, paper money and bank money.
Evaluation of the financial performance of banking sectors in. Banks in ethiopia overview and guide to banks in ethiopia. To a certain extent, this is what we are now seeing across africa. It is not a result of brain storming of some economist rather there is a long process of evolution since start of civilization to this modern complicated credit system. It has made interbank money an d foreign exchange markets operational as of 1998. In other words we will follow the larger stops money has made while growing up, going from exchanging different items to turning into the electronic money we can use today. This will undoubtedly affect the business of other entrepreneurs in the same business ikpang, 2011. This period witnessed the establishment, as most readers will know, of the countrys first bank. The 1970s heralded the appearance of the first payment systems which were mainly developed inhouse and ran on large mainframes.
Ethiopia has registered remarkable economic performance with annual growth averaging 10. Well cover history, notes, coins, the current value, and much more. The bank of abyssinia banknotes took time to be accepted by the population at large. Evolution of money, convention, functional economics theory. Ethiopia is one of the fastestgrowing economies in the world. The issue of endogeneity or exogeneity of money is one that runs through the history of. Ethiopian banking history, in its modern sense, began towards the end of the reign of emperor menilek. Pdf on apr 1, 2017, mulu gebreeyesus and others published foreign direct investment in ethiopia. One of the most remarkable features of the economic history of ethiopia is the use of primitive money, such as bars of salt.
Find out how this system of money management developed into what we know today. Evaluation of the financial performance of banking sectors. Pdf the relationship between inflation and economic growth. Established in 1963, the national bank of ethiopia nbe started its operations in 1964. The aid program helps achieve these objectives by encouraging and selectively supporting ethiopias efforts to accelerate social and economic growth and attempting.
The world bank public disclosure authorized ethiopia. Money laundering works in three phases see figure 1 below. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted. Origins and early development of banking in ethiopia. The case of zemen bank by muhabie mekonnen mengistu pan african university, cameroon. Effects of money laundering on the economy of nigeria. Free books online, free pdf books, books to read online, free ebooks. Ethiopia, budget deficit financing, money supply m2, inflation, cointegration, public spending 1. Ethiopia money prior to 1993, the official rate of the ethiopian birr was pegged fixed to the u. Ethiopias economy experienced strong, broadbased growth averaging 9.
Ethiopia s growth miracle, coupled with its large population and significant land mass, has attracted. In other words we will follow the larger stops money has made while growing up, going from exchanging different items to turning into the electronic money we. In the earliest period of human civilization, any commodity that. History, evolution, and prospects 5 the institute of internal auditors research foundation accountant and the internal auditor use many of the same techniques often leads to a mistaken assumption that there is little difference in the work or in ultimate objectives. With the italian occupation 19361941, the operation of the bank of ethiopia came to a halt, but a number of italian financial institutions were working in the country. Levines classic work on the social evolution and integration of the many ethnic groups that make up ethiopia has been a must reading for all sociologists and those concrned with economic and social development in africa and elsewhere since the book was first publilshed by the university of chicago almost 25 years ago. The structure and performance of ethiopias financial.
Its headquarters are in the capital city of addis ababa. Evolution of money supply and inflation 21 figure 5. In our rapidly changing world, everything happens online. The birth and development of banking services in ethiopia. Alemitu lives with her mother in a small ethiopian village, and her days are filled with heat.
The africa investment report 2016 letter from the editor 1 letter from the editor in markets as in nature, what goes up must come down. In ethiopia, inflation has remained reasonably stable before 200203. Before 1976, dollar was the official english translation of birr. Why is the world bank bothering the government of ethiopia on. Some of the major stages through which money has evolved are as follows. Deficit financing, money supply and inflation in ethiopia. Introduction its common for governments in developing countries to use fiscal and monetary policy tools to achieve their desired objectives. Ethiopia money, information about money in ethiopia. Ethiopia as a nation, defining it as an obsolete empirestate, a prison house of peoples. The national bank of ethiopia nbe is the central bank of ethiopia. A thesis submitted to the school of graduate studies of addis ababa university in partial fulfillment of the requirements for the degree of master of science in. Low mobile phone subscription is usually blamed for low mobile money account penetration in ethiopia. Well, to an extent, we can trace back our steps and understand what brought us here.
Oct 09, 2019 discover how the evolution of banking has changed the business model. The development of money has passed through various stages in accordance with time, place and circumstances with the progress of civilization of mankind. One of the most remarkable features of the economic history of ethiopia is the use of primitive money, such as bars of salt, pieces of cloth and bars of iron for many hundred years prior to the italian invasion of 1935. Money, in some form, has been part of human history for at least the last 3,000 years. The last 150 years show us an evolution in the payments or otherwise known as the money transfer industry. The structure and performance of ethiopias financial sector 5 clearly there is evolving structural shift when deposit is observed by institutions. Propose and test an epayment system that can be used in ethiopia. Occidental ancient history ends with the fall of the western roman empire in. This is double the sub sahara africa and triples the world average growths over this period and has led to ethiopia being rated as one of the fastest growing economies in the world. The bank of ethiopia opened branches in dire dawa, gore, dessie, debre tabor and harrar. Today, it is officially birr in english as well in 1931, the emperor of ethiopia, haile selassie i, formally requested that the international community use the name ethiopia as it had already been known internally for at least 1,600 years citation needed. The evolution of payment systems to understand the functions of money better and to obtain an idea over the forms money has taken over time, we now take a look at the evolution of the payment system, the method of conducting transactions in the economy. Abstract this study is aimed at evaluating the financial performance of the banking sectors in ethiopia with a special focus on zemen bank s. Need to facilitate exchange of goods led to evolution of money.
Other articles where history of ethiopia is discussed. A recent report noted that 39 percent of all mobile users in the u. In this article we will be talking about the two theories which explain what money is. Ethiopia banknotes ethiopia money catalog and ethiopian. May, 2019 money, in some form, has been part of human history for at least the last 3,000 years. The first is the convention theory which looks at the evolution of money. Before that time, it is assumed that a system of bartering was likely used. Nov 11, 2006 bank of ethiopia 50 birr 1932 and state bank of ethiopia prederg birr italian occupation of ethiopia ethiopian singers are overseen by italian fascist as they broadcast indegenous ethiopian music to rome. Evolution of money is probably one of the biggest invention in human history. They define money as anything that is generally accepted in payment for goods and. Bank of ethiopia 50 birr 1932 and state bank of ethiopia prederg birr italian occupation of ethiopia ethiopian singers are overseen by italian fascist as they broadcast indegenous ethiopian music to rome. Second, difficult tradeoffs often must be made between multiple objectives in relation to specific functions and. The ethiopian central bank issues banking licenses and supervises banks in ethiopia.
During the 1980s, packagebased solutions began to appear, which, while an improvement on their predecessors, were hampered in their ability to handle. The history of currency and banking in ethiopia and the horn of africa from the middle ages to 1935. Evaluation of the financial performance of banking sectors in ethiopia. During the aforementioned year, the first currency of ethiopia was called menelik talers. We dont know how we got here, but, at last, we are here. Ethiopian relationship was first established in 1903 and remained in good standing until the italian occupation in 1935.
Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. On the other hand, to economists money has a very specific meaning. The structure and performance of ethiopias financial sector. This was the final draft of the english text of une. Ethiopias real gross domestic product gdp growth decelerated to 7. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the private sector is becoming increasingly important. Not only that, the bank continues narrating, investors and those who send money to ethiopia will be attracted by this good deal and will send more money and invest a lot. The dichotomous evolution poses important challenges for the roles that these markets can play in emerging economies.
The evolution of payment systems rish yadav, a senior consultant at capgemini, explains how core banking systems and processes have evolved since their inception. Historically, the ethiopian birr reached an all time high of 33. Co integration and causality analysis fitsum sharew denbel, yilkal wassie ayen and teshome adugna regasa phd senior expert, ethiopian shipping and logistics service enterprise, addis ababa ethiopia. Early dated coins, those dated before ee1969, feature a crowned rampant lion holding a cross.
Pdf monetary developments and decolonization in ethiopia. Roles and objectives of modern central banks 18 issues in the governance of central banks 2 including the important financial stability function remain to be spelled out clearly, limiting the completeness of governance arrangements. Investigate challenges to epayment in ethiopia legalregulatory, infrastructure, socioculture. Uvadare digital academic repository financial market. Though i was predisposed toward the ethiopia i had studied since the late 1950s, i appreciated that within its. Ethiopia aims to reach lowermiddleincome status by 2025. Ethiopia banknotes, ethiopia money catalog and ethiopian currency history history.
The bank is active in promoting financial inclusion policy and is a member of the alliance for financial inclusion afi. Money is the most important invention of modern times. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the. Oct 26, 2017 ethiopias economy is concentrated in the services and agriculture sectors. Since its inception in 1961, usaid has provided assistance to ethiopia. The world bank public disclosure authorized ethiopia growth. Objects of gold and silver were used in religious activities, as sacrifices and gifts to gods and priests and. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. This is up from 14 percent in 2014 and by my estimations will in. What is evolution of money due to inconveniences of barter system, the need for introducing something as a medium of exchange arise. The country of ethiopia holds the ethiopia birr as its official currency.
The relationship between inflation and economic growth is one of the debatable issue and the most important macroeconomic discussi ons among macro economists, poli cymakers and monetary. Called the bank of abyssinia, or in amharic yeityopya bank, it was an affiliate of the national bank of egypt, and was founded in 1905. Discover how the evolution of banking has changed the business model. Situated in the horn of africa, ethiopia is bordered by eritrea to the north, sudan to the west, kenya to the south, somalia to the east and djibouti to the northeast. These modules basic idea is on symbol recognition, drawing of symbols, symbols for money in and money out, understandin g income and expenses. It has undergone a long process of historical evolution.
Origin, history and functions key concepts barter, the purpose of money, early and current forms of money summary this lesson introduces students to types of money cash, coin and the purposes of money. In the earliest period of human civilization, any commodity that was generally demanded. Besides having almost all the legends in amharic, there are two features that help to immediately identify an ethiopian birr. Placement this is a stage the launderer deposits the dirty money into a financial institution such as bank accounts. After the breakneck growth rates that characterised much of of the regions first decade in the 21st century, we are. The economic implications of money laundering in nigeria. We saw last week that the founding of ethiopia s first bank, the bank of abyssinia, in 1905, was followed, in 1915, by that institutions issue of bank notes. Globally, the evolution of capital markets in the last two decades has been dichotomous, in the sense that the markets have experienced integration as well as segmentation. Evolution of money, convention, functional economics. The relationship between inflation, money supply and economic. S military communications facility and has generally taken constructive foreign policy positions. Haile selassie and franklin delano roosevelt developed an. The money of account now became 1 birr 16 ghersh 32 bessa. Ethiopia, history of money in africa, monetary reform.