Businesses Warn USD Shortages Threaten Operations Despite Bank Allocations











Despite Ethiopian banks nearly doubling foreign currency allocations compared to last year, businesses continue to face severe U.S. dollar shortages that threaten daily operations and investment plans.

Earlier this week, most commercial banks reported stronger allocations. Awash Bank earmarked $110 million for August, while Dashen Bank disbursed $11 million in the first six days. On August 16, the Commercial Bank of Ethiopia cleared pending applications worth $420.4 million.

Banks insist that individuals, importers, and service providers can access foreign exchange for legitimate business and travel purposes. Overall, monthly disbursements have doubled from a year ago, reaching roughly $500 million, according to the National Bank of Ethiopia (NBE).

Yet businesses say the numbers offer little relief. An auto importer, speaking on condition of anonymity, warned that ongoing scarcity may soon force him to shut down operations. “The lack of hard currency has made the import business extremely tough,” he said.

Some business owners accuse banks of prioritizing profit over practical solutions. “They focus more on marketing than on supporting actual business needs,” the importer added, noting that some bank employees are returning to informal brokerage—earning up to 7 birr per U.S. dollar by linking clients with exporters.

The NBE recently injected $150 million into the banking system through a large forex auction and pledged stricter enforcement against illicit trading. Officials also claim that structural barriers—such as delayed approvals and high deposit requirements—that once drove businesses to the parallel market are being dismantled.

“Banks are likely to prioritize foreign currency allocations as they roll out digital core banking systems and import capital-intensive goods,” said Ameha Teferra (DBL), a researcher and seasoned economist. “They are also channeling more funds toward economically strategic sectors, particularly value-added imports favored by the central bank.”

A banker, who requested anonymity, told Addis Insight that the reported allocations reflect requests submitted over the past five months. He noted that the ongoing forex crunch is drawing employees back into brokerage roles, bridging the gap between high demand and cautious supply. “Even banks negotiate behind the scenes; the posted rate is hardly the full story,” he said.

Last year, the NBE shifted a significant share of the country’s forex allocation for fuel imports to private banks—a role previously reserved for the state. As a result, banks say much of their current allocations go to the energy sector. Awash Bank reported that of the $125 million it disbursed in July, more than $70 million was spent on fuel imports, while $55 million covered other strategic commodities. Dashen Bank supplied $112.6 million in July, with $33.9 million financing fuel purchases and $73.1 million covering consumer goods.

“We floated the birr without preparation,” Dr. Ameha warned. “Economic principles require preconditions. Before liberalizing the currency, productivity and efficiency should have been strengthened.” He cautioned that without improvements in domestic output, liberalization risks worsening shortages. “With banks focused more on profit maximization, rates will escalate and the burden will fall on households that rely on imported goods,” he said.