How ICare Is Building an Inclusive E-Commerce Revolution in Ethiopia

How ICare Is Building an Inclusive E-Commerce Revolution in Ethiopia By Addis InsightOctober 7, 2025 From TikTok to last-mile delivery, this Addis Ababa-based startup is transforming digital shopping and livelihoods in one of Africa’s most underserved markets. Helina was just a second-year Computer Science student when she noticed something broken in Ethiopia’s retail system: everyday essentials that are cheap and common elsewhere were scarce or priced like luxury goods. E-commerce, while booming globally, remained a distant dream for most Ethiopians—hampered by trust issues, low digital literacy, and a lack of locally adapted platforms. So she launched ICare, a startup born at the intersection of affordability, digital inclusion, and economic empowerment. Less than two years in, ICare is not only making essential goods accessible through a uniquely local e-commerce model—it’s also quietly becoming a job-creation engine for young Ethiopians. “I wanted ICare to be more than a store,” says Helina, now Founder and CEO. “I wanted it to be a catalyst—for access, for trust in digital commerce, and for livelihoods.” TikTok-Powered, Customer-Centered ICare’s model is refreshingly scrappy. Instead of waiting for the infrastructure to catch up to Western-style e-commerce, the team built on what Ethiopians already use—Telegram, TikTok, and trust-based relationships. Customers can order products without prepayment, with clear return and refund policies ensuring satisfaction. Prices are 20–40% below market thanks to direct global sourcing. ICare sells both wholesale and retail, often using TikTok as a storefront and Telegram as a cart. And behind every delivery and digital post is a small but growing team of young people gaining hands-on experience in logistics, social media marketing, and customer service. “From Stone Carrier to Delivery Pro”: Meet Fikadu One of those people is Fikadu, a 25-year-old husband and father who once worked construction jobs carrying stones and collecting recyclables to make ends meet. Helina met him while renovating her family home and saw something in him: humility, drive, and potential. “I asked if he’d be interested in working for ICare. He said yes without hesitation,” Helina recalls. At first, Fikadu had never navigated the city for deliveries. He didn’t own a bike, nor a license. But with Helina’s support, he received three months of training, secured a grant-funded e-bike, and became ICare’s first delivery employee. Today, he completes deliveries across Addis Ababa with ease, mentors new hires, and supports his family on a stable income. His journey from precarious labor to purposeful employment is a snapshot of ICare’s mission in action. “ICare gave me more than a job,” says Fikadu. “It gave me stability, confidence, and hope for a better future.” 300% Growth—Fueled by People What’s striking is how ICare’s growth mirrors its investment in people. In the first two months after hiring its founding team of seven—including roles in tech, customer service, hosting, and delivery—ICare saw a 300% spike in productivity and sales. “That kind of impact isn’t just about business processes,” Helina emphasizes. “It’s about what happens when you believe in people.” Mentorship and on-the-job training are baked into ICare’s DNA. The startup hires based on drive and potential, not just degrees. Every role, from customer service to digital marketing, is a chance to build a new kind of e-commerce talent pipeline in Ethiopia. Building a Platform—and a Culture ICare’s long-term vision is to evolve from its current social-commerce model into a fully automated, AI-driven platform tailored to Ethiopian realities. But its cultural foundation is already in place. Fikadu’s story, Helina says, represents the values ICare wants to scale: humility, hard work, trust, and growth. “We don’t just hire people—we invest in them. And when they grow, the company grows,” she says. The company’s initiatives like #icareforwomen and #icareforkids are already operational, with #icareforhome and #icareforhim slated for 2026. As it scales, Helina envisions new roles in logistics, content, data, and technology opening up—alongside continued investments in mentorship and digital literacy. Why It Matters In a country where over 70% of the population is under 30, youth unemployment and digital exclusion are massive challenges. ICare is not pretending to solve them all—but it’s showing what’s possible when you design tech for local needs and people. “ICare is proof that startups in frontier markets can be both profitable and deeply impactful,” says Helina. “We’re not waiting for change—we’re creating it.” And for Fikadu, the impact is already real. “I never imagined I’d be mentoring someone else. But here I am,” he says with a smile. “ICare changed my life—and now I get to help someone else do the same.”

Ethiopia Capital Market Authority Tightens Exchange Oversight

Ethiopia Capital Market Authority Tightens Exchange Oversight ECMA Mandates Independent Oversight for Exchanges, Details Strict New Supervision and Reporting Framework ADDIS ABABA — The Ethiopian Capital Market Authority (ECMA) has released a comprehensive new supervision guideline, establishing a rigorous framework for oversight, compliance, and governance for all market participants. Dated October 2025, the directive introduces significant new requirements aimed at bolstering market integrity and protecting investors. Key measures include mandating the creation of highly independent committees to oversee the regulatory functions of exchanges, barring Politically Exposed Persons (PEPs) from serving on these committees, and instituting strict new protocols for external auditor appointments, regulatory reporting, and the management of trade disruptions. The guideline outlines a “hybrid approach” to supervision, blending “Compliance-Based Supervision,” which ensures adherence to rules, with a forward-looking “Risk-Based Supervision (RBS)” model. The RBS approach allows the ECMA to proactively identify emerging risks and focus its resources on entities deemed “high-risk.” Here are the most significant changes detailed in the new framework: Independent Committees to Govern Exchanges To better manage conflicts of interest, the ECMA now requires all “trading venues”—including securities exchanges, derivatives exchanges, and over-the-counter markets—to establish a special committee responsible for overseeing the exchange’s regulatory and supervisory obligations. The guideline emphasizes the committee’s independence, which must be maintained separately from the exchange’s operational and business functions. The rules explicitly bar certain individuals from serving on this committee, including: Anyone affiliated with the trading venue’s management or daily operations. Current or recent employees, executives, brokers, dealers, or issuers with listed securities. Individuals with financial, professional, or personal relationships that could compromise impartiality. “Politically Exposed Persons (PEPs),” defined as senior politicians, government officials, or executives of state-owned enterprises. This independent committee will wield significant authority, including approving the exchange’s rules (e.g., membership, trading, and listing rules), regulatory budgets, and appointments of key regulatory personnel. ECMA Approval Required for External Auditors The guideline strengthens ECMA oversight of financial reporting by requiring all market infrastructures and Capital Market Service Providers (CMSPs) to obtain prior approval from the Authority for their external auditor appointments. The selection process is multi-layered: The entity’s audit committee, composed solely of non-executive board members, selects and recommends the auditor. The board endorses the appointment. Shareholders formally approve the appointment at the Annual General Meeting. Finally, the entity must submit a formal request with supporting documents to the ECMA for final approval before the auditor can commence their duties. Strict Timelines for Trading Disruptions Securities exchanges now face precise and demanding timelines for reporting trading interruptions. If a connectivity disruption occurs during market trading: The exchange must notify all market participants within thirty (30) minutes of the disruption. An initial incident report must be submitted to the ECMA within two (2) hours. A comprehensive follow-up report detailing the cause, actions taken, and resolution must be submitted to the ECMA within twenty-four (24) hours. If a disruption occurs before market opening, the exchange must notify participants at least one hour prior to opening or as soon as the disruption is identified. New Inspection Regimes and Data Access The ECMA’s framework establishes a structured inspection process: Routine Inspections: Systemically important entities, such as exchanges, Over-the-Counter Markets, and Securities Depository and Clearing Companies (SDCCs), will be inspected annually. CMSPs will be inspected according to the ECMA’s annual plan. Spot Inspections: Unscheduled reviews conducted to investigate specific allegations, such as investor complaints or whistleblower reports. Target Inspections: Focused assessments on “specific or sensitive areas of priority” or emerging trends. To enhance transparency, the rules require that bid, ask, and execution prices be published in real-time. For OTC markets and websites where real-time reporting is not feasible, a maximum latency of thirty (30) minutes is permitted. Additionally, order books and post-trade data must be accessible within twenty-four (24) hours of a transaction. Key Roles of SDCCs and SROs Clarified The guideline clarifies the roles of other key market infrastructures: SDCCs: Securities Depository and Clearing Companies are now recognized “as SROs (Self-Regulatory Organizations) by default.” This affirms their authority to implement rules and supervise their participants, including clearing members and settlement banks. SDCCs must also perform daily reconciliation of securities records against issuer registers to ensure accuracy and mitigate risk. SROs: For other SROs, such as trade associations, establishing a “Client Compensation Fund” is not mandatory. However, an SRO may choose to create one, and the ECMA reserves the right to require an SRO to establish such a fund if it is deemed necessary to protect client interests and address specific market risks. The document is accompanied by extensive reporting templates that all regulated entities must use, covering monthly transaction reports, quarterly financial and complaint reports, and annual compliance reports.

NBE Issues Directive to Prevent Use of Personal or Third-Party Accounts for Commercial Transactions

NBE Issues Directive to Prevent Use of Personal or Third-Party Accounts for Commercial Transactions Addis Ababa, October 2025 — The National Bank of Ethiopia (NBE) has issued a stern directive to all banking institutions to crack down on business operations conducted through individuals’ personal or third-party accounts. The move is part of a broader effort to strengthen financial oversight and address risks linked to tax evasion and illicit finance. Background & Legal Basis The directive is grounded in Proclamation No. 1359/2017, which empowers the NBE to regulate and supervise financial institutions across Ethiopia. The bank has reported that a substantial number of business organizations and individual traders are using personal bank accounts or third-party accounts to carry out transactions—rather than using the business accounts they registered with tax authorities. This practice circumvents routine scrutiny by tax collection agencies and undermines transparency in the financial system. Risks and Red Flags According to the NBE statement, transactions conducted in this manner may facilitate money laundering, financing of criminal activities, or terrorist funding, since they evade formal oversight. The central bank warns that such arrangements may mask the true nature or source of funds, making it difficult for regulators and law enforcement to trace suspicious flows. In addition, by sidestepping business-registered accounts, these transactions weaken the ability of the tax authority to monitor revenue, detect underreporting, and audit proper compliance. Directive to Banks & Implementation Measures All commercial banks have been instructed to identify customers engaging in commercial activities through personal or third-party accounts. Banks must submit reports and detailed information about these customers to relevant regulatory bodies. The NBE has called for a coordinated response involving tax authorities, anti-money laundering units, and law enforcement agencies to follow up on flagged cases. Motivation & Policy Rationale The primary goal is to preserve the integrity and soundness of Ethiopia’s financial system. By restricting misuse of accounts, the NBE aims to reduce systemic risk. The NBE also frames this measure as essential to economic security — ensuring that illicit capital does not undermine national development. As Ethiopia has been rolling out reforms in taxation and financial regulation, this directive aligns with recent efforts to modernize revenue mobilization and clamp down on revenue leakage. Implications for Businesses and Traders Business entities—especially small and medium enterprises—must ensure they are using properly registered business accounts for all transactions. Individual traders using personal accounts for business must regularize their operations and register with tax authorities. The directive raises the possibility that banks may impose account freezes, sanctions, or closure on those who flout the rules. Potential Challenges & Points of Friction In practice, enforcing this policy may require enhanced compliance systems within banks to flag and monitor account usage patterns. Some businesses may resist or delay compliance, arguing that personal or third-party accounts are convenient or exist for legacy reasons. The coordination between the NBE, tax authority, and law enforcement will be critical. Gaps or delays in information sharing could weaken enforcement effectiveness. Next Steps & Outlook The NBE is expected to issue guidelines or clarifications to banks to standardize the identification and reporting process. Audits and inspections may follow to assess compliance across the banking sector. In high-risk or repeat violation cases, the authorities may pursue legal action or penalties under relevant financial, tax, or anti-money laundering laws. Over time, this directive could help broaden Ethiopia’s formal tax base, reduce shadow economy activities, and enhance the transparency of the banking sector.

CBE’s New Service Fees Spark Outcry as 50 Birr Charges Hit Small Transfers

CBE’s New Service Fees Spark Outcry as 50 Birr Charges Hit Small Transfers ADDIS ABABA – The Commercial Bank of Ethiopia’s (CBE) newly adjusted service fees officially took effect today, and early customer reactions on social media show widespread frustration. Screenshots circulating online reveal that interbank transfers under ETB 1,000 are now subject to a flat ETB 50 charge, a rate many customers say is disproportionate to the transaction size. For example, a transfer of ETB 500 now incurs a 10% fee—an unusually high cost for low-value transactions. Customer Backlash Many CBE account holders have taken to Facebook, X, and Telegram groups to complain about the sudden jump in fees, describing them as “punitive” and “unfair to everyday users.” Users compared the cost to private banks and mobile wallets, arguing that fintech competitors often charge less for similar transactions. The most repeated grievance is that CBE did not publicly disclose the updated fee structure in detail before enforcement, leaving customers confused about the exact rates. What’s Changed Transfers to other banks now carry the steepest increase, especially for amounts below ETB 1,000. Customers report that the ETB 50 flat charge applies regardless of whether the transfer is ETB 100 or ETB 999. While CBE previously issued a broad notice in August announcing “service fee adjustments effective September 28, 2025,” it did not publish the full tariff schedule widely, leading to what customers describe as “bill shock.” CBE serves more than 38 million customers, making it the largest bank in Ethiopia by a wide margin. The bank’s dominant role means its fee structure sets an effective benchmark across the industry. The backlash highlights a broader tension between Ethiopia’s state-owned banking giant and consumers at a time when fintech firms and private banks are aggressively pushing for market share with lower-cost digital services. CBE has not yet issued a clarifying statement responding to today’s online uproar. Industry observers suggest the bank will face mounting pressure to either adjust the flat fee system for small transfers or offer clearer communication on the rationale behind the new rates. For now, retail customers—especially low-income users relying on small transfers—appear to be the hardest hit by the changes.

Abyssinia Bank Reports Record Growth: Total Assets Surge to 286.2 Billion Birr

Abyssinia Bank Reports Record Growth: Total Assets Surge to 286.2 Billion Birr Abyssinia Bank has reported its strongest financial performance to date, with total assets reaching 286.2 billion birr ($5.1 billion), marking a 28.8% year-on-year increase as of the close of the 2017 E.C. fiscal year (2024/25 Gregorian calendar). The bank’s annual general meeting—its 29th regular and 16th extraordinary shareholder assembly—highlighted sharp growth in income, profitability, and digital infrastructure deployment, positioning the private lender as one of Ethiopia’s fastest-growing financial institutions. Profit Soars by Over 90% The bank’s net profit surged to 10.1 billion birr—representing a staggering 91.1% increase compared to the previous year—driven by improved interest income, strong loan performance, and expanding customer base. Total income for the fiscal year reached 39.1 billion birr, up sharply from 27.8 billion birr in the preceding year. Abyssinia’s capital base also rose significantly, reaching 28.8 billion birr, bolstering the bank’s capacity to expand its lending portfolio and withstand economic headwinds in a market still reeling from macroeconomic instability, including inflation, forex shortages, and debt restructuring pressures. “Our performance reflects both prudent financial management and our aggressive investment in future-facing technologies,” a Board representative said at the meeting. Digital Expansion: ATMs, POS, and Virtual Centers Multiply In a strategic bid to scale digital financial inclusion and optimize transaction processing, Abyssinia Bank significantly expanded its digital infrastructure: 1,700+ ATMs were deployed nationwide, reducing cash bottlenecks and enabling 24/7 service access. 3,600+ POS terminals have been installed, boosting merchant acceptance in urban and peri-urban areas. 49 virtual banking centers were opened to serve the growing digitally native customer base. This expansion complements the National Bank of Ethiopia’s broader push to modernize payment systems and reduce reliance on cash, while competing with mobile money giants like Telebirr and M-Pesa Ethiopia. Corporate Social Responsibility: 91 Million Birr in Community Investment In addition to its financial results, the bank disclosed that it had allocated 91 million birr towards corporate social responsibility (CSR) programs during the year. These included investments in education, healthcare, and community development, aligning with Ethiopia’s Sustainable Development Goals and demonstrating growing shareholder awareness of environmental, social, and governance (ESG) issues. Context: Competitive Landscape Tightens Amid Liberalization Abyssinia’s financial disclosure comes at a time when Ethiopia’s banking sector is undergoing seismic shifts. With foreign banks preparing to enter the market under the National Bank of Ethiopia’s Directive SBB/94/2025, local banks are accelerating digital transformation, capitalization, and operational efficiency to preserve market share. Experts suggest Abyssinia’s balance sheet growth and digital strategy may position it as a frontrunner in the post-liberalization banking race—especially if it can deepen its product offerings in digital lending, SME banking, and cross-border remittances. Outlook: Navigating Reforms and Risks While Abyssinia’s 2025 performance has exceeded expectations, analysts caution that Ethiopian banks still face risks from ongoing debt restructuring, forex rationing, inflationary pressure, and regulatory uncertainty. Nevertheless, the Bank’s robust financials and proactive technology investments offer a strong platform for sustained growth, investor confidence, and eventual regional competitiveness should capital account liberalization accelerate in the coming years. “With capital nearly hitting the 30 billion birr threshold and a fast-scaling digital footprint, Abyssinia is clearly signaling its intention to be more than a traditional bank,” said one Addis-based banking analyst. “It’s positioning itself as a 21st-century financial services hub.” About Abyssinia Bank:Founded in 1996, Abyssinia Bank is one of Ethiopia’s largest private banks. It serves millions of customers across retail, corporate, and diaspora segments, and is among the leading adopters of digital banking platforms in the country.

Ethiopia Opens Restricted Eurobond Talks in Paris as Debt Restructuring Gains Momentum

Ethiopia Opens Restricted Eurobond Talks in Paris as Debt Restructuring Gains Momentum Addis Ababa/Paris – Ethiopia has entered into confidential negotiations with a group of its international bondholders to restructure its $1 billion Eurobond, signaling the most serious progress yet in efforts to resolve its sovereign debt crisis. According to people familiar with the matter, the restricted talks – held under non-disclosure agreements – began in Paris this week between Ethiopian officials and representatives of the creditor committee. The group includes major institutional investors such as VR Capital Group Ltd., Farallon Capital Management LLC, and Morgan Stanley Investment Management. The negotiations mark a critical milestone for Ethiopia, which defaulted on its sole Eurobond in December 2023 after failing to make a $33 million coupon payment. The government’s earlier proposal, which asked investors to accept an 18% haircut, was rejected last year, raising concerns over protracted standoffs similar to those seen in Zambia and Ghana. From Default to Dialogue The new round of talks comes on the heels of Ethiopia’s March 2025 deal with bilateral lenders, including China and France, to restructure $8.4 billion of official debt under the G20’s Common Framework. That agreement cleared a major hurdle in Ethiopia’s broader debt resolution strategy, unlocking a path to return to discussions with private creditors. Securing a deal with bondholders is now the missing piece in a restructuring puzzle that has stretched on for nearly three years. Analysts say successful talks would not only stabilize Ethiopia’s strained external finances but also bolster investor confidence in the country’s $3.4 billion International Monetary Fund (IMF) program, approved earlier this year. “This is the first real indication that both sides are willing to move past last year’s impasse,” said one Africa debt strategist at a London investment bank. “If Ethiopia can secure a deal that aligns with the IMF’s debt sustainability targets, it will mark a turning point for its re-entry into international capital markets.” Market Reaction The bond market responded immediately to the news. Ethiopia’s $1 billion Eurobond due 2024 surged to 95.5 cents on the dollar – its highest level in over a year and the largest single-day gain since July 2024. Investors appear to be betting that a deal is now within reach and will involve fewer losses than initially feared. Still, traders caution that optimism may be premature. While the restricted talks are a positive signal, they are far from a final restructuring agreement. “Markets are pricing in higher recovery values, but the devil will be in the details – coupon structure, maturity extensions, and whether there’s any upfront principal reduction,” said another analyst. Domestic and Global Stakes For Ethiopia, resolving the Eurobond is not just a financial imperative but a political one. The government is attempting to stabilize an economy battered by war, drought, foreign exchange shortages, and soaring inflation. External financing has dried up since the default, and restoring access to markets is crucial to attract investment and sustain growth. Globally, the case is being closely watched as a test for the G20 Common Framework. Ethiopia is one of the first countries to progress significantly through the initiative, which has been criticized for its slow pace and lack of coordination between official and private creditors. A breakthrough deal could set an important precedent for other African nations facing similar debt distress. What Comes Next The restricted talks in Paris are expected to continue throughout the week, though neither side has provided a timeline for reaching an agreement. Any deal must satisfy IMF requirements that Ethiopia’s debt return to a sustainable trajectory while also providing bondholders with a credible path to repayment. Key elements under discussion are likely to include: Coupon reductions to ease near-term payment pressure. Maturity extensions to spread repayment obligations over a longer horizon. Potential partial haircuts on principal, though investors hope these will be minimal given the recent rise in bond prices. If the two sides can strike a balance, Ethiopia would be positioned to move past its default and gradually restore access to global capital markets – a critical step for financing its ambitious infrastructure and development plans. Outlook While risks remain, momentum appears to be shifting in Ethiopia’s favor. The combination of progress with bilateral creditors, IMF support, and bondholder engagement suggests that the country could emerge from its debt crisis sooner than skeptics expected. “Investors were bracing for a long stalemate, but the latest developments suggest a deal may be achievable within months rather than years,” said a fund manager holding Ethiopian debt. For now, all eyes remain on Paris – where the closed-door talks may well determine Ethiopia’s financial trajectory for the rest of the decade.

Visa, SantimPay to Deploy 20,000 POS Terminals in Ethiopia

Visa, SantimPay to Deploy 20,000 POS Terminals in Ethiopia Addis Ababa – Global payments giant Visa Inc. has entered into a strategic partnership with Ethiopian fintech firm SantimPay Financial Solutions S.A. to deploy 20,000 point-of-sale (POS) terminals across Ethiopia, a major step toward building out the nation’s underdeveloped digital payments infrastructure. The agreement—inked during the Visa Connector Ethiopia summit last week—marks Visa’s first financial partnership program in East Africa and comes as the National Bank of Ethiopia (NBE) accelerates efforts to expand merchant acceptance, boost cashless transactions, and deepen financial inclusion across the country. “This is a watershed moment for Ethiopia’s payments ecosystem,” said a regional executive at Visa, calling it a “foundational investment” in digital infrastructure. Mass Deployment to Tackle Merchant Acceptance Gap The rollout, managed by SantimPay, will see tens of thousands of low-cost, interoperable POS terminals installed in both urban and rural merchant locations. Ethiopia’s total active POS terminal count currently sits under 10,000, one of the lowest on the continent for a nation of over 120 million people. With this agreement, Ethiopia is poised to more than triple its merchant acceptance footprint over the next 12 to 18 months. “Our mission is to make digital payments accessible, affordable, and inclusive,” said SantimPay CEO, noting the partnership as a model of public-private alignment under NBE directives. Visa’s Bet on a Nascent Market Visa’s entrance into Ethiopia’s physical payments space comes amid a broader fintech liberalization wave. In recent years, the Ethiopian government has: Granted foreign mobile money licenses (Safaricom’s M-Pesa entered in 2023) Introduced the Payment Issuer Instrument Directive (2020) Launched its National Digital Payments Strategy (2021–2025) Prioritized card payment interoperability and fintech licensing reforms Ethiopia’s mobile payments sector is booming—with Telebirr surpassing 40 million users—but card usage and merchant infrastructure remain underdeveloped. The new partnership attempts to bridge that divide. “We’re not just deploying terminals. We’re unlocking ecosystems,” said a Visa official at the signing ceremony. Project Scope and Technical Details The partnership’s scope includes: 20,000 POS terminals, phased rollout starting Q4 2025 EMV and QR compatibility for both card-based and mobile wallet payments Integration with Ethiopia’s national switch (EthSwitch) and core banking APIs Support for multi-language UIs and offline fallback for rural merchants A pipeline for merchant financing and digital credit scoring Visa will also support SantimPay with merchant training, digital literacy, and fraud risk management, signaling an end-to-end capacity-building model. Financial Inclusion and Policy Alignment The collaboration supports the National Bank of Ethiopia’s (NBE) 2025 target of increasing digital transaction share to over 40% and reducing cash dependency across government services, transport, retail, and health sectors. SantimPay’s positioning as a homegrown fintech player gives the project local credibility, while Visa’s global network provides scale and compliance assurance. “This partnership shows what’s possible when regulatory clarity meets international investment,” said a senior advisor at NBE. Digital Payments: Ethiopia by the Numbers Broader Implications: From Hardware to Ecosystems The deployment of POS machines isn’t just about terminals—it’s about creating a digital merchant ecosystem that can eventually connect to: Digital tax systems Micro-credit and BNPL services Loyalty and rewards programs Supply chain digitization Analysts expect the project to unlock new credit access for small merchants and enable better data-driven lending models through transaction histories. “This is foundational fintech infrastructure,” said a payment systems analyst in Nairobi. “Without it, mobile money remains peer-to-peer. With it, you get a real digital economy.” What’s Next? If successful, this partnership could pave the way for: More foreign entrants into Ethiopia’s fintech space (e.g., Mastercard, Stripe Africa) A possible merchant acquiring license for SantimPay Pilot projects for softPOS (tap-on-phone) and contactless fare systems in public transport Strengthened integration with the Pan-African Payment and Settlement System (PAPSS) under AfCFTA Visa is expected to increase its footprint in Ethiopia through further partnerships in mobile banking, open APIs, and government e-payments. Bottom Line Visa’s deal with SantimPay could be a turning point in Ethiopia’s transition from a cash-first to a digitally enabled economy. As the country opens its doors to foreign capital and tech, the success of such partnerships will be closely watched by regulators, investors, and rival payment providers. With digital commerce rising and the state embracing reform, Ethiopia may just become East Africa’s next fintech frontier.

Ethiopia 2025: U.S. Report Flags Reforms and Corridor Risks

Ethiopia 2025: U.S. Report Flags Reforms and Corridor Risks The U.S. State Department’s 2025 Investment Climate Statement on Ethiopia paints a picture of a country pulling in two directions at once: a government eager to court foreign capital and modernise its economy, and a political and regulatory environment that repeatedly unsettles the very investors it hopes to attract. Reform Momentum and Market Appeal The report credits Ethiopia with a reform tempo unmatched in decades. In July 2024 the government abandoned its long-standing currency peg, allowing the birr to float and triggering a depreciation of more than 100%. For a brief period the official and parallel-market rates converged, easing the chronic foreign-exchange shortages that have long dogged importers and manufacturers. This monetary liberalisation underpinned a four-year, $10.5 billion assistance package agreed with the International Monetary Fund and the World Bank. The programme aims to stabilise the financial system, strengthen the independence of the National Bank of Ethiopia and deepen the domestic capital market. Ethiopia has also relaunched the Ethiopian Securities Exchange (ESX)—a long-awaited platform for equity and debt finance—and passed laws to permit foreign banks to open branches and buy minority stakes in local lenders. Ten industrial parks have been upgraded to special-economic-zone status, with incentives designed to attract export-oriented manufacturing and agro-processing. Add to this a population of more than 135 million, two-thirds of them under 30, and labour costs among the lowest in Africa, and the lure for foreign investors is obvious. Sectors from textiles to telecoms see a potential market and labour force of continental scale. Structural and Political Friction Yet Washington’s statement is equally blunt about what still deters capital. Ethiopia’s federal government has limited control outside Addis Ababa, with conflict and insecurity in the Amhara and Oromia regions restricting travel and exposing businesses to extortion by militias or local officials. Property rights remain fragile because all land is state-owned and only leased. Courts are slow, under-resourced and prone to political interference; commercial disputes can take years to resolve. Customs regulations change without notice and tax authorities have been accused of issuing retroactive and excessive tax bills—penalties so high they sometimes exceed a firm’s annual revenue. Corruption, particularly in land allocation and public procurement, is described as a “national security threat”. Even the flagship currency float is showing strain: by late 2024 the gap between bank rates and the parallel market had already begun to re-emerge, threatening the credibility of the reform. The Urban “Corridor Development” Controversy The report singles out the government’s “corridor development” projects as a vivid example of weak property protections. Launched in Addis Ababa in March 2024 and since expanded to at least 40 other cities, these projects aim to create broad urban boulevards and plazas. But implementation has been brutal: tens of thousands of residents and businesses—some foreign-owned—were expelled and their properties demolished, often with no warning and little or no compensation. Because investors can only lease land, the government can revoke leases or reclaim property for “public purpose” with minimal legal recourse. Some firms were not demolished but found their access roads ripped up, making it impossible to operate. For the State Department, these practices amount to de facto expropriation and send a chilling signal to foreign capital. External Trade Corridors and Geopolitical Risk Ethiopia’s vulnerabilities are not only domestic. More than 95% of its trade moves through the Addis–Djibouti corridor, a single road-and-rail lifeline to the Red Sea. That dependence makes the economy hostage to Djibouti’s port politics and to the region’s Red Sea instability. To diversify, the government in January 2024 signed a controversial memorandum with Somaliland to secure access to the port of Berbera and even a potential naval facility—an agreement that provoked strong objections from Somalia’s federal government and raised regional tensions. Meanwhile, in March 2025 Ethiopia granted licences to three private multimodal logistics operators, ending the state monopoly in a bid to cut freight costs and improve reliability. These steps could eventually reduce shipping times and insurance costs, but the geopolitical and security environment remains unsettled. Capital, Credit and Corporate Reality Ethiopia’s banking sector is still shallow. Thirty-two commercial banks operate, two of them state-owned, and liquidity is tight; collateral requirements often reach 100% of the loan value. Real deposit rates are negative, squeezed by double-digit inflation. The state-owned Commercial Bank of Ethiopia still controls more than half of deposits and foreign exchange, leaving private banks little room to compete. Foreign investors may now open local business accounts, but access to domestic credit in practice remains limited. The birr’s renewed black-market premium and the slow rollout of foreign-exchange bureaus mean that repatriating profits can still be difficult despite the legal guarantees. Rule of Law and Governance Washington notes some progress: accession to the New York Convention allows enforcement of foreign arbitral awards, and new commercial benches have been created in federal courts. But enforcement of contracts remains slow, and allegations of executive interference persist. A 2025 Asset Recovery and Unexplained Wealth Law gives authorities broad powers to seize assets deemed improperly acquired, even retroactively. Critics fear it could be used to target political opponents or legitimate investors, further undermining confidence in the rule of law. A Calculated but Costly Opportunity The State Department’s conclusion is unmistakable. Ethiopia offers long-term opportunity: a vast domestic market, a reform-minded macroeconomic policy, and strategic location at the Horn of Africa. Yet it also carries exceptional political and regulatory risk. Investors must account for: potential expropriation or disruption from urban corridor projects, regional conflict and weak federal control, unpredictable taxation and customs enforcement, and continuing foreign-exchange volatility. For American firms the message is not “stay away” but “proceed with caution”—with thorough due diligence, strong contractual protections and contingency plans. Ethiopia’s promise is undeniable, but as the 2025 U.S. Investment Climate Statement makes clear, the path from reform to reliable return is anything but straight.

NBE Lifts Credit Cap to 24% but Stops Short of Full Removal

NBE Lifts Credit Cap to 24% but Stops Short of Full Removal Ethiopia’s Central Bank Holds Tight on Monetary Policy Ethiopia’s central bank unexpectedly opted for a partial easing of its credit controls, lifting the ceiling on commercial bank loan portfolio growth to 24% from 18%—but stopping well short of the full removal that investors, exporters and commercial lenders had widely expected. The announcement came late Monday from the Monetary Policy Committee (MPC) of the National Bank of Ethiopia (NBE) and immediately rippled through the financial sector. Bank treasurers and corporate borrowers, who had positioned for a broader liberalization, were forced to recalibrate their plans. A First Big Test for the New Governor The decision represents the first major policy signal from Governor Eyob Tekalign Tolina (PhD), who was appointed only weeks ago to succeed Mamo Mihretu. Eyob had previously expressed support for removing the credit cap altogether, feeding expectations of a sharp pivot toward liberalization and market-driven monetary policy. Instead, the governor endorsed a cautious approach, saying through the MPC that the cap remains “a key tool for safeguarding financial stability and sustaining the momentum in reducing inflation.” Analysts say the move underscores the delicate balancing act Eyob faces: fostering growth while trying to keep prices in check. Inflation Concerns Trump Liberalization Push The credit ceiling was first imposed in 2022 under Mihretu to tackle double-digit inflation, which peaked above 30% year-on-year at its worst. Annual inflation has since eased to the low-teens, but the NBE remains wary of loosening policy too quickly. Economists argue that lifting the cap entirely could have injected a surge of liquidity into the banking system, stoking price pressures just as the central bank is trying to consolidate gains against inflation. Economic Sectors Feel the Pinch For exporters, manufacturers, and large-scale agribusinesses, the cap’s continuation means ongoing constraints on access to working capital and expansion financing. These sectors, which earn crucial foreign currency inflows, have long argued that tight credit conditions hinder Ethiopia’s ability to improve its balance of payments and create jobs. Local banks also face limits on loan portfolio growth, constraining their ability to expand lending even as deposit bases grow. Several bank executives told Bloomberg-style reporters that projects in manufacturing and construction may be delayed as firms struggle to secure funding. Market Reaction and Outlook While the 6-percentage-point increase offers modest relief, market analysts described the decision as “incremental” and “well short of the liberalization narrative” that many investors had anticipated. The MPC hinted that it may “revisit the decision in forthcoming meetings,” offering a slim hope that a full removal of the cap could still materialize if inflation continues to moderate. For now, Ethiopia’s monetary policy remains firmly on a cautious trajectory, signaling that Governor Eyob intends to prioritize price stability over an immediate shift toward market liberalization.