Ethio telecom To Try Again After Initial IPO Yields Poor Results

Only 10.7 percent of 100 mil By Samuel Abate Ethio telecom intends to re-issue unsold shares after its initial attempt to raise equity by selling off a 10 percent stake to the public garnered poor results. The offering, which began in October 2024 and lasted four months, saw more than 47,000 shareholders acquire equity in the state-owned giant, buying up 10.7 million shares valued at 3.2 billion birr. The minimum purchase limit was set at 33 shares, while the ceiling was 3,333 shares. The company, which has total assets valued at 300 billion birr, had initially aimed to raise 30 billion birr. However, the actual sales and proceeds only amounted to 10 percent of the target. During a press conference this week, CEO Frehiwot Tamiru attributed the shortfall to the restriction that only Ethiopians could purchase shares, the purchase limit of no more than one million birr per individual, the prohibition on institutions purchasing shares, and a lack of sufficient information about the share sale among the public. “Discussions are ongoing with relevant parties regarding the disposition of the remaining shares, and further sale announcements will be made based on government directives,” said Frehiwot. The CEO did not comment on how Ethio telecom plans to utilize the 3.2 billion birr raised from the share sale. However, she confirmed that the process of share allocation has begun. She also stated that only Ethiopian citizens would be eligible to buy equity in Ethio telecom in upcoming offers.

Washington’s Tariffs Offer Textile Manufacturers Reprieve from AGOA Slump

Firms report renewed interest from US buyers By Samuel Abate Textile and apparel manufacturers in Ethiopia report the start of a revival of demand from buyers in the US as the Trump administration’s tariff bonanza pushes American businesses to reassess their product sourcing. The textile industry was the hardest hit by Ethiopia’s delisting from the African Growth and Opportunity Act (AGOA) in late 2020, which cut short duty-free benefits and drove American buyers away as part of the Biden administration’s response to human rights violations committed during the northern war. Four years later, Washington’s tariff regime, which has seen rates of up to 145 percent imposed on goods from 60 countries worldwide, has sparked what could be a surge in business for ailing textile manufacturers. Ethiopian goods are subject to a 10 percent tariff—a development that government officials, including Prime Minister Abiy Ahmed—have described as a positive opportunity. Recent updates seem to reinforce the opinion, with firms engaged in textile and apparel manufacturing reporting increased interest from buyers in the US despite the AGOA suspension. Among them is Huajian Shoe Factory, which used to export products valued at USD 33 million to the US market annually before Ethiopia lost its AGOA privileges. In the years since, the firm has had to cut its workforce from 8,000 to just 1,000 employees. However, things seem to be looking up. Nahom Gebremichael, assistant vice president of Huajian, told The Reporter that inquiries from companies looking to collaborate have spiked since the White House announced the tariffs a month ago. Huajian supplies half of its products to the domestic market under the terms of its agreement with the Ethiopian government, and is preparing to resume exports to the US, according to Nahom. The surge in demand is likely driven by the relatively higher tariffs placed on manufacturing centers in Asia, he observes. Hibret Lemma, executive director of the Hawassa Industrial Park Investors Association, stated that manufacturers have been operating at less than half capacity since the AGOA suspension became effective in 2021. Despite this, businesses leasing space in the flagship industrial park still export up to 60 percent of their products to the US market. The new tariffs, Hibret argues, will help them become more competitive. He highlighted the high tariffs on Chinese manufacturers in particular, who were the primary competitor in the US market, creates an opening for countries like Ethiopia, which offer low labor costs and already have the necessary infrastructure in place. “US companies that used to source from Hawassa Industrial Park but stopped after the AGOA ban are now showing interest again following the new tariffs,” said Hibret. New Wing Addis Shoe Factory, a company with operations in Ethiopia, Italy, and Hong Kong, also reported receiving requests from four US-based firms in the past couple of weeks. “Due to the AGOA ban, four out of five big US clients stopped ordering from us. But after the recent tariff changes, they’ve expressed renewed interest and asked for product samples,” said Ivanov Mesfin,  deputy manager at the firm. He urged the government to support manufacturers with tax exemptions, logistics improvements, and other assistance to boost competitiveness in the US market. During an official visit to Vietnam last week, the PM stated that the 10 percent tariff on Ethiopian goods is relatively low compared to other countries, and could help attract international companies to invest in Ethiopia. Meanwhile, US President Donald Trump is widely expected to scrap AGOA entirely this year following his stated opposition to renewing it—a position he has maintained since his election campaign.

Fitch Sustains Ethiopia’s Default Rating for USD1 Billion Eurobond

The global rating agency Fitch has opted to keep Ethiopia’s credit rating at Restrictive Default—the same rating it issued after Ethiopia failed to pay the first USD 33 million coupon on its USD one billion Eurobond in December 2023. “Fitch Ratings will move Ethiopia’s Long-Term Foreign-Currency IDR [Issuer Default Rating] out of default once it completes its restructuring process with private creditors on foreign-currency debt,” reads a rating update issued by the agency on Thursday. However, the rating agency upgraded Ethiopia’s Long-Term Local-Currency IDR to ‘CCC+’ from triple C status. The upgrade, it said, “reflects reduced financing pressures, improved macroeconomic stability, and increased confidence that local-currency obligations will not be part of the debt restructuring.” The rating came amidst the Spring Meetings of the International Monetary Fund (IMF) held in Washington, DC over the week. On the sidelines of the meeting, IMF Managing Director Kristalina Georgieva told a press conference that with the exception of Morocco, African countries were failing to “put their fiscal houses in order”. She said her organization encouraged countries to press ahead with their respective reform programs, and “not postpone” them, although the time, she admitted, was one in which the global trading system was fundamentally shaken. Meanwhile, speaking at a sideline event, Executive Secretary of the Economic Commission for Africa (ECA) Claver Gatete accused the global rating agencies of bias against African countries. He called for Africa to establish its own internationally credible rating agency, which he said would be able to provide the continent’s own credit worthiness and ratings.

IMF Slashes Sub-Saharan Africa’s Growth Forecast for 2025

The International Monetary Fund (IMF) has revised its economic growth forecast for Sub-Saharan Africa, downgrading its October 2024 prediction of 4.2 percent to 3.8 percent for 2025. The revision reflects a range of challenging economic conditions, including weaker external demand, plummeted commodity prices, and tighter financial markets. “We now expect growth in Sub-Saharan Africa to ease to 3.8 percent in 2025 and 4.2 percent in 2026, down from October’s projections,” said Abebe Aemro Selassie, director of the IMF’s African Department. “This adjustment is driven largely by the global economic environment, with weaker demand from abroad, lower commodity prices, and tighter financial markets.” During a press briefing at the 2025 IMF and World Bank Spring Meetings in Washington, DC, on Friday, Abebe explained that the growth forecast for 2025 has been cut in line with a downward shift in the global economic outlook. “Regional growth is expected to slow this year due to these external challenges,” he stated. He also warned that further trade tensions or tightening financial conditions in advanced economies could dampen regional confidence, raise borrowing costs, and delay investment decisions. The IMF’s regional economic outlook highlighted that recent tariff escalations, particularly between the United States and its trading partners, are complicating the region’s recovery. Earlier this month, the US imposed sweeping tariffs of up to 145 percent on a broad range of imports from major trading partners, including industrial machinery, electronics, and consumer goods. China’s swift retaliation, matching or exceeding US duties on key American exports such as agricultural commodities and energy products, has driven global tariff rates to their highest levels in a century. This tit-for-tat dynamic has disrupted supply chains worldwide. Shipping costs have surged as businesses attempt to reroute cargo away from US ports, opting instead for alternative markets in Europe, Southeast Asia, and Latin America. Small and medium-sized enterprises (SMEs) are particularly affected, facing unexpected cost increases they are unable to absorb. IMF’s Chief Economist Pierre-Olivier Gourinchas was quoted by the media as saying, “The unpredictability around trade policy is stalling investment decisions.” While Sub-Saharan Africa’s direct trade exposure to the United States is modest compared to regions like Asia or Europe, the region remains vulnerable through several channels such as commodity prices, supply-chain disruptions, investor sentiment, and lending conditions, reports indicate. Abebe also pointed out that Official Development Assistance (ODA) to Sub-Saharan Africa is expected to decline further, placing additional strain on the most vulnerable populations. These external challenges compound existing vulnerabilities, including high debt levels, which hinder many countries’ ability to finance essential services and development priorities. Although inflationary pressures have moderated regionally, several countries continue to struggle with elevated inflation, necessitating tighter monetary policies and careful fiscal management. Amid these challenges, Abebe emphasized the importance of balancing growth, social development, and macroeconomic stability. “Building robust fiscal and external buffers is more important than ever, underpinned by credibility and consistency in policy-making,” he recommended. To foster private-sector growth, reforms aimed at improving the business climate and enhancing regional integration are essential. In many Sub-Saharan countries, growth has been driven by public investment in infrastructure, schools, and clinics. However, Abebe noted that moving forward, it will be crucial to shift focus toward making the private sector the primary engine of growth. “There are reforms that can be implemented to facilitate this transition,” he said. Despite these challenges, Abebe remains optimistic about the region’s resilience. “This year alone, 11 out of the 20 fastest-growing economies globally are in Sub-Saharan Africa,” he noted. The IMF’s forecasts suggest that several countries in the region will continue to experience significant growth. With abundant natural resources and a rapidly growing labor force, Sub-Saharan Africa has the potential to become one of the most dynamic and important markets globally. However, the region remains vulnerable to external shocks, particularly fluctuations in commodity prices and changes in global funding flows. As the IMF report highlights, income per capita has stagnated in many countries, unemployment—especially among youth—remains high, and there is an urgent need for increased development spending. Given fiscal constraints, the private sector will need to play a key role in driving economic growth. It will not only need to create high-quality jobs but also respond quickly to unexpected shocks and capitalize on emerging opportunities.

Tariffs Threaten Ethiopian Cut Flower Exports in Thriving US Market

PM says tariffs may ‘open door for more investment’ By Samuel Abate Flower exporters say the impacts of the Trump administration’s tariffs are beginning to make themselves felt, jeopardizing a US market they have been working hard to penetrate over the past few years. <img decoding="async" class="alignnone size-full wp-image-44709" src="https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77.jpg" alt="Tariffs Threaten Ethiopian Cut Flower Exports in Thriving US Market | The Reporter | #1 Latest Ethiopian News Today" width="1068" height="580" title="Tariffs Threaten Ethiopian Cut Flower Exports in Thriving US Market | The Reporter | #1 Latest Ethiopian News Today" srcset="https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77.jpg 1068w, https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77-300x163.jpg 300w, https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77-663x360.jpg 663w, https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77-150x81.jpg 150w, https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77-768x417.jpg 768w, https://www.thereporterethiopia.com/wp-content/uploads/2025/04/Tariffs-Threaten-Ethiopian-Cut-Flower-Exports-in-Thriving-US-Market77-696x378.jpg 696w" sizes="(max-width: 1068px) 100vw, 1068px" /> Miserach Berhanu, head of the Ethiopian Flower, Vegetable, Fruit, and Herbs Exporters Association, told The Reporter the 10 percent tariff levied on Ethiopia is creating serious challenges for fresh cut flower exporters. The new tariff adds to an existing three percent duty on flowers in the US, and the sharp increase is expected to slow the progress exporters have made in the US market over the last four years. Although two-thirds of Ethiopia’s flower exports are destined for the Netherlands, the US has steadily become a promising market, accounting for around USD 45 million in revenues last year, according to Miserach. However, the new tariff will likely cause the prices of Ethiopian flowers to rise, potentially making them less competitive compared to other countries in the region, namely Ecuador and Colombia, two of Ethiopia’s main competitors in the US flower market who already have an advantage in terms of transportation costs. Washington has slapped a 10 percent tariff on imports from Ecuador, while Colombia faces a 16.8 percent tariff. However, European countries will face a higher 20 percent tariff in US markets, which are the primary destinations for Ethiopian flower exports indirectly. Miserach says Ethiopian producers are also working to expand into the Asian and Middle Eastern markets to boost revenue. The Association reports 187,000 tons in flower and vegetable exports over the first eight months of the financial year, generating USD 367 million in revenue. Although the figure tops last year’s performance by USD six million, exporters report they face significant challenges, particularly in terms of production and security issues. Flower producers in the Amhara region, including Bahir Dar, have been severely impacted by the ongoing security problems in the area. Many flower companies have either fled the country or halted production due to safety concerns. The government, on its part, has adopted a pragmatic approach to the US tariffs. During a recent visit to Vietnam, Prime Minister Abiy Ahmed stated in Hanoi, “the tariffs imposed by the United States on Ethiopia are relatively low compared to those on other countries. This may actually enhance our competitiveness and open the door for more investment in Ethiopia.” Ethiopia’s agricultural export sector was once a beneficiary of the African Growth and Opportunity Act (AGOA), a trade initiative that allowed duty-free access for Ethiopian agricultural products to the US market. However, Ethiopia was delisted from AGOA in 2021 by the administration of former US President Joe Biden, following the outbreak of the conflict in Northern Ethiopia.

Ethiopian Airlines Allocates 30 bln to Preparation Works for Airport Megaproject

The Ethiopian Airlines Group is set to spend around 30 billion birr on preparing a massive 35 square kilometer plot near Bishoftu for its new operations hub and international airport, according to a new report from the Ministry of Finance. The budget is earmarked for land clearing, resettlement expenses, and readying the site for the construction of the airport, which will be located about an hour’s drive away from the capital. Previous statements from Group executives indicate that up to 17 billion birr will be used to compensate the estimated 2,500 farming households currently residing on the land, which has been categorized into eight lots. It states the design of the airport city and resource mobilization efforts are underway, with the relocation of residents and demolition of structures on the plot expected to wrap up by September. In August 2024, Group CEO Mesfin Tassew and representatives of Dar Al-Handasah, a specialized engineering firm, signed an agreement for the design and consultancy works associated with the carrier’s monumental project. Dar Al-Handasah Consultants is a partner of world-renowned Zaha Hadid Architects. The airport complex is expected to cost USD 7.8 billion, with the African Development Bank (AfDB) expected to act as a primary financier for the project. Finance Minister Ahmed Shide and Group executives submitted a letter of intent to AfDB last month. How much the bank will be committing to the project has not been disclosed. However, its latest commitment is expected to grow its portfolio in Ethiopia, which stands at USD 1.2 billion across key sectors. During the signing of a preliminary agreement in March, AfDB chief Akinwumi Adesina described the Bishoftu airport city as the “flagship African project”. Group executives envision the new airport handling over 100 million passengers annually by 2040, more than four times the 17 million passengers passing through Bole International Airport at present. The government hopes it will reboot Ethiopia’s tourism industry and reaffirm its dominance in aviation.

Finance Ministry Anticipates Spending Less on Debt Service

Gov’t spent 211 bln on subsidies over nine-month period Officials at the Ministry of Finance say the recent debt restructuring agreement with creditors will save Ethiopia USD 3.5 billion over the coming three years. The figure was cited in the Ministry’s nine-month performance report, which relays that the restructuring has reduced the USD 2.8 billion expected from Ethiopia each year for debt service to USD 1.95 billion. The Ministry indicates that gross international reserves have surged by 204 percent during the first three quarters of the fiscal year, reflecting a jump in foreign currency earnings. Commercial banks and the state-owned Development Bank of Ethiopia (DBE) generated USD 445 million in foreign currency, while remittances brought in close to USD 3.7 billion (up from USD 2.3 billion last year), according to the report. Total forex receipts for the past nine months stood at USD 8.1 billion, while the country’s import bill registered at USD 7.7 billion, according to the Ministry. The first nine months of the financial year have also seen a rise in export earnings, according to the report. Agricultural exports generated USD 2.6 billion, while another USD 2.1 billion was registered in mineral exports. The latter is a 368 percent jump from last year’s figure. A total of 26 tons of gold was supplied to the National Bank of Ethiopia (NBE) during the reporting period, up from just three tons last year. Electricity and manufacturing exports remain below the USD 300 million mark, according to the Ministry. Foreign direct investment (FDI) remains constant at USD 2.4 billion, according to the report. The federal government received 224 billion birr in foreign loans and aid, according to the report, while its total revenue over the nine-month period stood at 921 billion birr, more than double the number registered last year.  The surge is mainly driven by tax income, which jumped from 374 billion birr last year to 653 billion birr in the last nine months. The Ministry indicates that although the government planned to disburse 1.27 trillion birr over the reporting period, only 852 billion birr was recorded. The government spent 211 billion birr on subsidies over the first three quarters of the year, with the safety net program accounting for 42 billion birr, another 62 billion on fertilizer, and 60 billion birr on fuel.

Insurers Renew Demands for Independent Regulator Behind NBE’s Banking Focus

Insurance executives say a tendency to focus on banking at the National Bank of Ethiopia (NBE) necessitates a new independent regulator if the industry is going to live up to its immense potential. The call comes as the government lays the groundwork for a separate body to govern insurers—a process industry insiders claim has been proceeding largely without their input. A new regulatory agency is expected to be established, to oversee the insurance industry. So far, insurance industry has been managed by a directorate inside the National Bank of Ethiopia (NBE). However, insurance gurus have been arguing that the industry could not grow as much as its potential as well as compared to the banking industry, mainly because NBE gives more emphasis for banking industry than the insurance sector. The process of separating insurance regulation from the central bank, has been underway and expected to be realized by June 2025, according to sources. Among those calling for a split from the NBE is industry veteran Meseret Bezabih, chief executive officer (CEO) of Hibret Insurance. She believes an independent regulator is crucial for growth in the Ethiopian insurance industry, which comprises 18 firms holding approximately 17 billion birr in capital at the end of 2022/23. “Insurance is in a very nascent stage to date in Ethiopia, but the potential for growth is immense,” Meseret told The Reporter. “An independent regulatory agency that will focus on insurance is vital. So far, our operations, activities, and concerns are relegated to second place because the NBE appears to prioritize the banking sector.” The decorated CEO says this has to change if Ethiopian insurers are to realize their ambitions. Many in the industry believe that an independent regulator would allow it to receive the attention and support it needs for growth, help attract international investment, and advocate more actively on its behalf. The Ethiopian insurance market is characterized by significant growth potential, particularly in life insurance, but struggles with high inflation, poverty, and a lack of qualified professionals. Reports project the market will reach a gross written premium of nearly USD 4.7 billion in 2025 and continue growing. Insurers argue that playing second fiddle to banks will hamper this projected growth. Their calls for an independent regulator are far from new, with Meseret explaining the demands stretch back several years. She described reports of a new bill in the pipeline to establish an insurance regulator a “welcome development.” However, industry sources told The Reporter that the process of establishing the soon-to-be-announced regulator has not been as transparent as desirable. “We have not been represented in the process,” one anonymous source said. “We should have been there all along the process,” said another. Before the 1970s, when insurers were placed under the purview of the NBE, regulating the industry, which at the time was largely under state ownership, was a mandate of the Ministry of Trade. Today, the central bank oversees the young industry, which is dominated by the state-owned Ethiopian Insurance Corporation (EIC). In the first nine months of the current fiscal year, the EIC’s risk-bearing capacity exceeded 6.2 trillion birr, with a premium income of 7.6 billion birr and a record profit of over 1.2 billion birr before taxes. Although private insurers have also exhibited strong growth over the past two decades, the industry has a long way to go in terms of reach and product diversity. There are also reports that the government is keen to allow foreign insurers to join the market. Meseret welcomes the prospect. “They would bring in much needed capital and expanded products,” she told The Reporter. “We have already outsourced a significant portion of our operations in the sense that we have deals with international reinsurers. We collect premiums, and we buy insurance from reinsurers. That is how we have been doing it for some time now. As such, it is less of a concern for us that foreign insurers would join the Ethiopian insurance scene. We will continue partnering with them.” The government hopes liberalization will boost growth by increasing the flow of capital, widen the scope of insurance service, and bring in the knowledge and skills necessary to extricate the industry from market distortions and inefficiencies. On the other hand, analysts fear opening up the industry to foreign competition would pose risks related to weak regulation and crowding out domestic firms.

Commission announces 40 foreign investment permits in retail, wholesale trade

By Yared Nigussie Officials at the Ethiopian Investment Commission say they are handing out 40 export, import, retail, and wholesale trade investment permits to foreign companies as part of the government’s efforts to liberalize the economy. Zeleke Temesgen, head of the Commission, said the permits follow five months of work crafting directives and guidelines. He did not specify the names of the firms that will be receiving the permits, but called the pending liberalization a significant step forward. “Since the directive was approved, 40 foreign businesses in export, import, retail, and wholesale have been licensed to operate in what were previously prohibited sectors,” Zeleke stated during a press briefing at the Invest in Ethiopia 2025: High-Level Business Forum. The directive allows foreign investors to engage in the export trade of raw coffee, khat, oilseeds, pulses, hides and skins, forest products, poultry, and livestock sourced from the local market. In terms of imports, the directive opens the door to foreign investors in all sectors except for fertilizer and petroleum, which remain restricted. “Among the newly licensed companies are those engaged in electric vehicle trade, edible oil, livestock production, khat, and paraffin oil,” the Commissioner revealed. However, he failed to disclose the size of the investments or the details of companies entering the market. “We have lost significant opportunities due to the prohibition on foreign wholesale and retail businesses. But with this liberalization, we’re now realizing substantial benefits,” Zeleke said. For foreign investors with no prior procurement history in Ethiopia, the directive mandates the submission of a market and purchase order contract valued at a minimum of USD 500,000 for eligible export products. Moreover, foreign manufacturing enterprises that use raw materials either imported from or procured within Ethiopia must declare their supply chains and provide verifiable proof of their production processes to qualify under the directive. Addressing a question from The Reporter about the impact of security concerns on investment, Zeleke acknowledged that peace is of paramount importance for investment. “The issue of peace should be viewed in two ways,” he said. “The first is that there are real security challenges in parts of the country, and the government is actively working to restore peace. The second is a matter of perception. While promoting Ethiopia abroad, we sometimes encounter Ethiopians who believe there’s no safety in Addis Ababa. This perception is far from the truth and needs to be corrected.” On the topic of investment predictability, Zeleke explained that it is largely linked to the revising laws and regulations. “We have been revising more than 85 laws, including legislation from the 1970s and 80s that had remained untouched for decades, in order to improve Ethiopia’s ease of doing business,” he said. Highlighting investment trends, the Commissioner noted that China leads in foreign direct investment in Ethiopia, with 4,510 projects—making it the top investor both in terms of capital and the number of projects. In the 2023/24 fiscal year, Ethiopia attracted USD 3.92 billion in foreign direct investment (FDI), according to the Commissioner.