Eleven Guardians of the Birr: Ethiopia’s Central Bank Governors Through Time













Introduction

The history of a nation’s central bank is never merely a story about money. It is, more often than not, a mirror of the state itself—its political ideals, economic ambitions, and evolving place in the world. In Ethiopia, the trajectory of the National Bank and its precursor institutions provides a striking lens through which to view the country’s modern transformations. From the twilight of the empire and the dawn of modernization, through the convulsions of revolution and socialist planning, to the cautious liberalization of the 1990s and the bold financial reforms of the 2020s, the institution has both shaped and been shaped by Ethiopia’s political economy.

At the heart of this saga stand the governors of the National Bank of Ethiopia (NBE) and its predecessors. They have been more than mere administrators. In every era they have navigated upheaval—war, famine, ideological shifts, debt crises—while balancing the twin imperatives of monetary stability and national development. Their leadership reflects the country’s recurring struggle to reconcile state control with market forces, political imperatives with central bank independence.

This article provides a comprehensive historical and analytical account of the governors who have led Ethiopia’s central banking institutions since the early twentieth century. It moves beyond a simple list of names to examine how each governor’s tenure was shaped by—and in turn influenced—the country’s political and economic context. Throughout, several themes recur: the tension between sovereignty and dependence on foreign expertise; the chronic challenge of inflation and foreign-exchange scarcity; and the delicate, often contested boundary between politics and monetary policy.

Before turning to the detailed narrative, the table below presents the full chronology of Ethiopia’s central-bank governors. It serves as a quick reference to more than a century of leadership and the political eras they represent.

Chronology of Governors of the National Bank of Ethiopia and Precursor Institutions

Source: National Bank of Ethiopia archives and historical records

Part I: Foundations of Central Banking in Ethiopia (1906–1959)

Modern Ethiopian banking was born not as an indigenous initiative but as an imperial project, part of the country’s effort to modernize and integrate into the global economy. The first half of the twentieth century saw a succession of expatriate governors whose work reflected the shifting geopolitical winds—from British influence before World War II to the emergence of American technical dominance after 1945.

From the Bank of Abyssinia to the Bank of Ethiopia

The story begins on 16 February 1906, when Emperor Menelik II inaugurated the Bank of Abyssinia. Far from a purely national institution, it was established through a fifty-year concession granted to the British-owned National Bank of Egypt. Its shares were sold not only in Addis Ababa but also in New York, London, and Paris, making it an early symbol of Ethiopia’s global economic connections. The bank financed key projects such as the Franco-Ethiopian Railway, linking the highlands to the Red Sea.

Yet the very foreignness that gave the bank access to international capital also rankled with Ethiopian leaders. When Ras Tafari Makonnen ascended the throne as Emperor Haile Selassie in 1930, he regarded a foreign-owned issuing bank as incompatible with the country’s sovereignty. In 1931 he liquidated the Bank of Abyssinia and replaced it with the fully government-owned Bank of Ethiopia—the first African state-owned bank with both central and commercial functions. For the first time, Ethiopia possessed a national institution capable of issuing its own currency and regulating credit. But this pioneering experiment was abruptly cut short by the 1935 Italian invasion, which liquidated the bank in 1936 and halted indigenous financial development for half a decade.

Expatriate Governors and the Post-Liberation Reconstruction

When the country was liberated in 1941, rebuilding the financial system became a matter of urgent priority. Emperor Haile Selassie turned to foreign experts, especially Americans, to lead the process. The succession of expatriate governors during this era reveals Ethiopia’s deliberate geopolitical pivot.

Charles S. Collier (1913–1936) had bridged the old and the new. A British national and governor of the Bank of Abyssinia, Collier’s signature on banknotes symbolized the lingering influence of Britain even as the Ethiopian state asserted ownership. His long tenure provided continuity, but his eventual replacement after the war signaled the end of British financial sway.

The emperor’s appointment of George Blowers (1942–1949) marked a decisive turn toward the United States. A Harvard-trained banker and former manager of the Bank of Monrovia, Blowers helped re-establish Ethiopia’s currency system after the Italian occupation. In 1945 he introduced the Ethiopian birr—then known as the Ethiopian dollar—replacing the East African shilling. To ease public acceptance in a society long accustomed to the silver Maria Theresa thaler, the United States supplied the silver for the coins. Blowers even represented Ethiopia at the landmark 1944 Bretton Woods Conference, which laid the foundation for the post-war global financial order.

The next decade brought an “American succession”: Jack Bennett (1949–1953), Walter H. Rozell Jr. (1953–1956), Neil Perry (1956), and George Rea (1956–1959). Under their leadership the State Bank of Ethiopia expanded its branch network domestically and abroad, even establishing offices in Khartoum and Djibouti. Rea, previously president of the New York Curb Exchange, brought rare expertise in financial markets just as Ethiopia prepared to modernize its banking architecture.

This early reliance on foreign governors was not merely a reflection of Ethiopia’s need for technical expertise; it was also a calculated diplomatic strategy. By courting American advisors, Haile Selassie sought to counterbalance lingering British influence and secure a powerful Cold War ally. Yet the State Bank’s dual role—as both a regulator and a commercial bank—posed an inherent conflict of interest. By the early 1960s, a more sophisticated financial system demanded a separation of these functions, setting the stage for Ethiopia’s first fully fledged central bank.

Part II: Ethiopianization and the Imperial Twilight (1959–1974)

The late imperial period brought a critical assertion of national control. Ethiopia’s first indigenous governor, Menasse Lemma, and the creation of the National Bank of Ethiopia marked both a symbolic and institutional watershed.

The Birth of the National Bank of Ethiopia

Proclamation 206 of 1963 split the State Bank into two entities: the National Bank of Ethiopia (NBE), charged solely with central banking functions, and the Commercial Bank of Ethiopia (CBE) for commercial operations. Assisted by U.S. envoy Earle O. Latham, this reform eliminated the conflicts of the dual-mandate system and gave the NBE broad administrative autonomy. Starting operations in January 1964, the NBE was empowered to regulate money and credit, manage foreign reserves, supervise banks, issue currency, and act as the government’s fiscal agent.

Governor Menasse Lemma: Champion of Economic Sovereignty

Menasse Lemma, who had already served as governor of the State Bank from 1959, became the NBE’s first governor. His fifteen-year tenure epitomized Ethiopia’s economic nationalism. Determined to consolidate state authority over finance, Lemma opposed the entry of foreign banks. He used the NBE’s regulatory powers to limit the activities of institutions such as the Italian Banco di Roma in Eritrea—restricting dividend repatriation, denying new branch licenses, and curbing transactions in U.S. dollars.

Yet Ethiopia’s structural problems hampered progress. The economy remained overwhelmingly agrarian, trapped in a quasi-feudal land tenure system that discouraged productivity. Successive five-year development plans faltered due to weak administrative capacity and poor data. Proclamation 206 had set a legal limit on government domestic borrowing at 15 percent of the previous three years’ revenue, but monetary policy could not overcome the fundamental barriers to growth. As discontent mounted, the monarchy’s legitimacy crumbled, culminating in the 1974 revolution that ended both Lemma’s tenure and the imperial era.

Lemma’s protectionist policies were a double-edged sword. They affirmed Ethiopia’s sovereignty and nurtured domestic capacity, yet also insulated the financial sector from competition and foreign capital. His experience underscored a broader lesson: a modern central bank can create the institutional framework for stability, but without structural economic reform—particularly in land and agriculture—monetary tools have limited power.

Part III: Revolution and the Command Economy (1974–1991)

The overthrow of the monarchy ushered in the Provisional Military Administrative Council, known as the Derg, and Ethiopia’s most radical economic experiment. Central banking was subsumed under socialist planning, and the NBE became an instrument of state control rather than an independent policy-maker.

A Bank in Service of the Revolution

In 1975 the Derg nationalized all private banks and insurance companies, creating a state monopoly. The Monetary and Banking Proclamation No. 99 of 1976 recast the NBE’s mandate to support the socialist plan and raised the ceiling on government borrowing from 15 to 25 percent of revenue—effectively institutionalizing monetary financing of the budget. The currency was renamed from the Ethiopian dollar to the birr.

Governors in a Time of Turmoil

Taffara Deguefé (1974–1976), a respected career banker, initially steered the NBE through the early revolutionary years. Tasked with investigating the deposed emperor’s foreign accounts, he soon fell victim to the regime’s suspicion of Western-trained professionals and was imprisoned in 1976.

Legesse Tickeher (1976–1978) governed during the height of the Red Terror and the 1977–78 Ogaden War. Land reform disrupted agricultural markets, urban inflation soared, and the NBE’s role shrank to maintaining minimal financial operations amid chaos.

Tadesse Gebrekidan (1978–1988) presided over the bank as the command economy consolidated. Droughts, the catastrophic 1983–85 famine, and escalating civil wars forced the NBE to channel credit to state enterprises and finance huge budget deficits through money creation. By 1984 military spending consumed nearly half the national budget.

Bekele Tamirat (1988–1991) inherited an economy in free fall—plagued by war, collapsing Soviet support, falling coffee prices, and a crippling foreign-exchange crisis. His task was less about policy than about keeping the financial system functioning until the Derg’s defeat in 1991.

The Derg period revealed the perils of subordinating monetary policy to political ideology. Central banking became a mechanism of “financial repression,” ensuring that no independent economic power could challenge the state. The result was not socialist prosperity but economic collapse.

Part IV: Transition to a Market Economy (1991–2018)

The fall of the Derg ushered in the Ethiopian People’s Revolutionary Democratic Front (EPRDF) and a cautious, decades-long transition toward a market economy. For the NBE this meant rediscovering its role as a modern central bank, even as the state retained a commanding presence.

Rebuilding the Financial System

The Monetary and Banking Proclamation of 1994 re-established the NBE as a separate legal entity with a mandate for monetary stability and a sound financial system. It legalized private domestic banks for the first time since 1974, though foreign banks remained barred—a cautious liberalization that preserved state dominance through the powerful Commercial Bank of Ethiopia.

Architects of Reform and Growth

Leikun Berhanu (1991–1995), a veteran of Ethiopia’s banking system, oversaw the initial stabilization: devaluing an overvalued birr, tightening reserves to tame inflation, and laying the groundwork for inter-bank money markets and treasury bills.

Dubale Jale (1995–2006) consolidated these gains and managed two critical challenges: the 1998–2000 border war with Eritrea and the 1997 currency separation after Eritrea introduced the Nakfa. He led the campaign to redeem old birr notes and maintain monetary sovereignty.

Teklewold Atnafu (2006–2018) presided over the peak of Ethiopia’s “developmental state.” Massive public investment—dams, railways, industrial parks—delivered near-double-digit GDP growth. But financing this ambition required an accommodative monetary policy: an overvalued exchange rate, persistently negative real interest rates, and chronic foreign-exchange shortages. While these policies fueled infrastructure expansion, they left a legacy of debt and structural imbalances for his successors.

The EPRDF years demonstrated both the possibilities and limits of state-led development. Despite market reforms, the financial sector remained dominated by the state, and the NBE often served the government’s investment agenda. Ethiopia grappled with the classic “impossible trinity”: trying to maintain a fixed exchange rate, independent monetary policy, and open capital flows all at once—an inherently unsustainable combination.

Part V: The New Era of Reform and Liberalization (2018–Present)

Prime Minister Abiy Ahmed’s rise in 2018 opened the most ambitious chapter of financial reform since the imperial era. The government’s Homegrown Economic Reform Agenda aimed to correct structural imbalances and invite foreign investment.

Reform Blueprint

Launched in 2019, the agenda sought to reduce inflation, resolve foreign-exchange shortages, modernize monetary policy, and—most dramatically—open the banking and telecommunications sectors to foreign participation.

Governors of the Reform Era

Yinager Dessie (2018–2023), an economist trained in Vienna, faced an extraordinary confluence of shocks: the COVID-19 pandemic, civil conflict in Tigray, severe drought, and the global fallout of the war in Ukraine. Despite efforts to modernize the treasury-bill market, war costs and dwindling donor support forced continued reliance on central-bank financing, making single-digit inflation elusive.

To accelerate reforms, Abiy appointed Mamo Mihretu (2023–2025), a Harvard-educated lawyer and former World Bank official who had helped design the reform agenda itself. Mihretu launched a “big bang” of changes: shifting from monetary targeting to an interest-rate-based framework, creating an inter-bank money market, moving toward a market-determined exchange rate, and opening the banking sector to foreign investors. These bold steps secured multi-billion-dollar packages from the IMF and World Bank, lowered inflation from over 30 percent to the low teens, and tripled foreign-currency reserves. His unexpected resignation in September 2025, after less than two years, left both admirers and critics debating the sustainability of his reforms.

He was succeeded by Eyob Tekalign (2025–present), a political economist and former State Minister of Finance who had led Ethiopia’s debt negotiations after its 2023 Eurobond default. His appointment underscores both promise and peril. Eyob must continue exchange-rate liberalization and debt restructuring while proving the NBE can act independently. Critics warn that moving the government’s chief debt negotiator directly into the governorship risks “fiscal dominance,” where central-bank policy becomes subservient to short-term government financing needs.

Conclusion: Continuity and Challenge

Over more than a century, the guardians of the birr have steered Ethiopia’s central bank through imperial modernization, revolutionary socialism, cautious liberalization, and now high-stakes reform. The institution’s history is one of constant negotiation between political power and the principles of sound monetary management.

Three lessons emerge. First, central-bank independence has been a perennial challenge—from the imperial court’s influence and the Derg’s outright control to the developmental state’s policy alignment and today’s concerns over fiscal dominance. Second, inflation and chronic foreign-exchange shortages have haunted every era, though their causes have shifted with political and economic structures. Third, the effectiveness of monetary policy ultimately depends on the broader economic environment: without structural reforms in land, production, and governance, even the best-designed monetary frameworks struggle.

As Ethiopia confronts the delicate task of moving to a market-determined exchange rate while restructuring its sovereign debt, the stakes for the National Bank could not be higher. Its ability to anchor inflation expectations, build credibility for an interest-rate-based policy, and assert its autonomy will determine whether the hard-won reforms of the 2020s can deliver lasting stability. The history of the NBE’s governors is thus not merely a record of the past; it is a guide to the future of Ethiopia’s economic sovereignty.