Four Hotels, Including Hilton, Record 564 Million Birr Profit

Four Hotels, Including Hilton, Record 564 Million Birr Profit Four tourism enterprises under Ethiopian Investment Holdings (EIH), including the landmark Hilton Hotel, reported a combined pre-tax profit of 564.2 million birr in the 2017 Ethiopian fiscal year. This performance exceeded expectations, standing 37 percent higher than the planned profit target. Strong Revenue Performance According to the performance review, the four companies—Spa Service Enterprise (Fil Wua), Gion Hotels Enterprise, Hilton Hotel, and Genet Hotel—collectively generated 2.1 billion birr in revenue, achieving 114 percent of their target. This robust outcome reflects the growing momentum in Ethiopia’s tourism and hospitality sector, where an increasing inflow of international visitors and expanding domestic demand continue to drive business growth. Strategic Priorities for Growth During the review, Ethiopian Investment Holdings emphasized that while the revenue performance is commendable, the companies must now consolidate their gains and focus on sustainability. Key recommendations included: Customer Satisfaction: Enhance service quality and guest experience to secure repeat business. Modern Marketing Strategies: Adopt targeted, data-driven promotion to better attract both local and international tourists. Digital Transformation: Invest in advanced reservation platforms, online booking systems, and digital payment services to streamline operations and meet global hospitality standards. Market Expansion: Take advantage of the growing demand for leisure and business travel in Ethiopia by upgrading facilities and expanding service offerings. Outlook EIH noted that the strong profitability of these hotels demonstrates the untapped potential of Ethiopia’s tourism sector. With strategic investment, modernization, and service innovation, the companies are expected not only to remain profitable but also to play a central role in positioning Ethiopia as a competitive hospitality destination in Africa.

Ethiopia Holds VAT at 15% in Landmark Overhaul to Reverse Fiscal Decline

Ethiopia Holds VAT at 15% in Landmark Overhaul to Reverse Fiscal Decline The Ministry of Finance has confirmed the Value Added Tax rate will remain at 15% under a new proclamation, the first major update in three decades, as it battles a sharp drop in national revenue. Ethiopia’s Ministry of Finance has officially confirmed it will maintain the country’s Value Added Tax (VAT) rate at 15 percent, cementing a key pillar of its sweeping tax system overhaul. The decision is part of a newly amended VAT Proclamation implemented in the 2017 fiscal year, representing the most significant reform to the nation’s consumption tax in 30 years. The move comes at a critical juncture for the nation’s economy. Rather than simply hiking rates, the government is focusing on a structural overhaul to reverse what officials describe as a continuous and alarming decline in tax revenue. Stemming the Fiscal Bleed The urgency behind the reform is stark. According to the Ministry, Ethiopia’s tax-to-GDP ratio has plummeted from a high of over 12 percent to its current level of less than 7 percent. This sharp decline is severely constraining the government’s ability to fund ambitious national development projects. Strikingly, the ministry’s analysis reveals that underperformance in the VAT system is the single largest contributor to this shortfall, accounting for a staggering 44 percent of the total revenue decrease. The policy review points to an outdated legal framework and a progressively eroded tax base as the primary culprits. Widespread exemptions, particularly on food and other basic consumables, have created significant revenue gaps, rendering the tax system inefficient and unable to keep pace with the country’s economic reality. The Strategy: A Modern Overhaul, Not a Rate Hike In response, the government’s medium-term revenue strategy eschews a simple rate increase in favor of a more fundamental fix. The amended proclamation is designed to modernize the law, aligning it with the “current economic situation and changes in the coming years.” “The Value Added Tax law has been amended in line with the current economic situation,” the Ministry of Finance stated. The goal is to broaden the tax base—bringing more goods and services into the net—to create a more robust and predictable revenue stream. On paper, VAT is seen as the ideal tool. “It does not distort production decisions and does not create cascading… making its potential to increase tax revenue higher than all other taxes,” argues a supporting policy document. The challenge now is to translate that theoretical potential into tangible fiscal results. The Social and Economic Balancing Act While the fiscal imperative is clear, the government faces a delicate balancing act. The amended law must navigate the regressive nature of indirect taxes, which can disproportionately harm low-income households that spend a larger portion of their income on essential goods. The decision to hold the rate at 15% while expanding the base reflects this dual challenge. The success of this landmark reform will ultimately depend on the government’s ability to thread this needle: effectively boosting its revenue to fuel national growth while simultaneously ensuring the system is fair to its most vulnerable citizens.

Ethiopia to Raise Civil Servant Salaries by Up to 80% Starting September

Ethiopia to Raise Civil Servant Salaries by Up to 80% Starting September Addis Ababa, August 18, 2025 – The Federal Government has announced additional salary adjustments for civil servants beginning in September, expanding its ongoing effort to ease cost-of-living pressures and align wages with the country’s broader reform agenda. New Salary Structure According to the Federal Civil Service Commission, the upcoming adjustments will increase civil service pay across all levels: Minimum salary: raised from Birr 4,760 to Birr 6,000 Maximum salary: increased from Birr 21,492 to Birr 39,000 Entry-level salary for degree graduates: revised from Birr 6,940 to Birr 11,500 Salaries across other public service roles will also be adjusted The revisions are expected to raise the government’s annual wage bill to 560 billion birr, an increase of 160 billion birr compared to the previous year. Reform Context The announcement is part of Ethiopia’s new economic development vision, which prioritizes inclusive growth, debt reduction, and improved revenue mobilization. Civil servants—who make up one of the largest groups of fixed-income earners in the country—have long argued that pay levels have not kept pace with rising inflation and the cost of living. Officials acknowledged this disparity, noting that while incomes for farmers, pastoralists, and private-sector workers have grown, civil service wages have remained stagnant. At present, government salaries account for roughly 30–32% of total public expenditure, underscoring the significant fiscal burden of wage reforms. Previous Measures This is not the first major wage intervention in recent years: In 2017, the government allocated 91 billion birr to increase salaries for lower-income civil servants despite fiscal pressures. Amendments to the Fixed Income Tax Proclamation (1994) raised the tax-free income threshold from Birr 600 to Birr 2,000, providing some relief to salaried employees. Complementary Measures Officials have stressed that salary adjustments are being paired with additional reforms aimed at improving the overall welfare of civil servants. These include: Housing programs targeted at public employees Expanded health insurance coverage Market monitoring mechanisms to discourage unjustified price increases linked to wage changes Authorities have indicated that businesses found exploiting salary revisions through artificial price hikes could face regulatory action. Fiscal Outlook and Revenue Pressures Ethiopia is pursuing a broader fiscal reform agenda designed to strengthen domestic revenue collection. The government has set an ambitious one trillion birr tax revenue target for this fiscal year—nearly four times the amount collected in 2020. To support this goal, a Domestic Revenue Mobilization Task Force has been established to improve compliance, while a series of tax policy reforms, including advance income tax payments for large taxpayers, have been introduced to stabilize government cash flow. Officials have stated that sustainable wage growth will depend on the success of these measures. They aim to increase the country’s tax-to-GDP ratio by one percentage point annually, with a medium-term goal of reaching 11% within four years. Broader Significance The salary adjustment is expected to have multiple effects: Relief for civil servants struggling with inflation and rising living costs Increased government expenditure, putting additional pressure on fiscal balances Potential inflationary ripple effects, depending on how markets respond to higher wages Observers note that while the pay rise provides immediate relief for public employees, its long-term success will depend on the government’s ability to balance wage spending with broader revenue and economic reforms. Reporter’s Note: The upcoming civil service pay rise is part of a wider fiscal and economic reform package. While it addresses mounting cost-of-living concerns among public employees, it also adds to Ethiopia’s fiscal pressures at a time when the government is seeking to expand its tax base and reduce debt.

CBE Disburses Over $1 Billion in Foreign Exchange to Ease Dollar Shortage

CBE Disburses Over $1 Billion in Foreign Exchange to Ease Dollar Shortage Addis Ababa, August 10, 2025 – The Commercial Bank of Ethiopia (CBE), the country’s largest lender, announced it has released more than $1 billion in foreign currency over the past six weeks to meet surging demand from businesses and essential service providers. Key Approvals This Month On August 10, 2025, the bank cleared all pending customer requests, disbursing $420.4 million for trade and service needs. Combined with allocations made between July 22 and August 9, CBE has approved $541.4 million for 1,140 customers. Since the start of the fiscal year on July 1, 2025, total foreign exchange disbursement has reached $1.034 billion. Priority Sectors Covered The bank said the latest disbursements were in addition to its regular daily forex allocations for: Fuel imports Fertilizer procurement Critical service payments Why It Matters Ethiopia continues to grapple with foreign currency shortages, a persistent challenge for importers and manufacturers. CBE’s move to clear backlogs and increase disbursement volume is aimed at: Easing pressure on businesses reliant on imported goods Supporting government priorities such as energy, agriculture, and infrastructure inputs Reassuring customers that forex supply is being managed more systematically The Road Ahead CBE emphasized it will continue aligning its foreign exchange operations with the country’s strategic economic priorities, ensuring that businesses and essential service providers have regular access to hard currency.

ZamZam Bank Appoints Eskinder Architects to Design Landmark New Headquarters

ZamZam Bank Appoints Eskinder Architects to Design Landmark New Headquarters August 15, 2025 – Addis Ababa ZamZam Bank, Ethiopia’s first full-fledged interest-free financial institution, has selected Eskinder Architects to design its upcoming headquarters in Addis Ababa, marking a major step in its long-term expansion plans. The agreement was officially signed during a ceremony at the Sheraton Addis, attended by CEO Melika Bedri, architect Eskinder Wubalem, and Board Chairman Dr. Nassir Dino. The new headquarters project follows a competitive design tender that attracted submissions from 48 architectural firms—both Ethiopian and international. After a detailed evaluation process, a distinguished jury awarded the contract to Eskinder Architects, a firm celebrated for its role as principal designer of high-profile projects including the Adwa Victory Museum. Speaking at the event, Dr. Nassir emphasized that the winning design reflects ZamZam Bank’s vision of combining modern architectural excellence with the institution’s values and mission. “This headquarters will stand as a symbol of our commitment to financial inclusion, innovation, and service to our customers,” he noted. The building is set to rise in Addis Ababa’s growing financial district, where it is expected to become both an architectural landmark and a statement of the bank’s economic influence. With its contemporary design and symbolic significance, the project underscores ZamZam Bank’s rapid growth since its establishment and its ambition to play a leading role in Ethiopia’s financial sector transformation. Once completed, the headquarters will not only provide a state-of-the-art workspace but also embody the bank’s broader goal of blending modern financial solutions with ethical banking principles, setting a new standard in Ethiopia’s commercial architecture.

Immigration and Citizenship Service Reports Over 34 Billion Birr in Annual Revenue

Immigration and Citizenship Service Reports Over 34 Billion Birr in Annual Revenue 15 Newly Opened Branches to Begin Operations Next Year August 9, 2017 (Ahadu Radio) — The Immigration and Citizenship Service (ICS), which has been undergoing extensive reforms for the past four years to address long-standing service complaints, has announced that it generated 34.1 billion birr in revenue during the recently completed fiscal year. Reform Efforts and Service Expansion Director General Salamyat Dawit highlighted that the reforms are aimed at delivering services in a “hands-free” and streamlined manner, reducing bureaucracy and improving efficiency. “In addition to Addis Ababa, we are expanding our service provision to regional areas,” she said, emphasizing that the goal is for citizens to access services at the nearest branch office without unnecessary travel costs or delays. The expansion plan reflects the government’s push to decentralize public services, ensuring equitable access for both urban and rural populations. Easier Passport Access and Anti-Broker Measures According to Mulugeta Tadesse, Director of Passport Services, any Ethiopian citizen who possesses both a birth certificate and a digital ID can now obtain a passport without additional conditions. However, he cautioned against dealing with illegal brokers, warning that many citizens are unknowingly engaging in unnecessary and costly activities by using unauthorized intermediaries. “We urge the public to protect themselves from such practices,” he said, noting that the ICS provides both regular and emergency passport services through two official channels. 15 New Branches to Begin Operations The ICS has already opened 15 new branch offices across the country, which are scheduled to become operational next year. These branches are strategically located in cities far from existing regional centers, making services accessible to previously underserved communities. Mulugeta explained that this expansion is part of a long-term service accessibility strategy aimed at ensuring no citizen is left without convenient access to essential immigration services. Challenges: Forged Documents and Illegal Service Access Despite progress, the ICS continues to face challenges, particularly from individuals who forge birth certificates and other documents to illegally obtain services. The Director noted that the number of people attempting to bypass official procedures has been rising. To address this, the institution is working closely with law enforcement agencies to track and prosecute offenders involved in fraudulent activities, including both document forgers and unauthorized service providers.

Ethiopia Bans Sinotruk Vehicles Over Persistent Quality Defects

Ethiopia Bans Sinotruk Vehicles Over Persistent Quality Defects Addis Ababa — The Ethiopian Customs Commission has announced a ban on the import of Sinotruk vehicles, citing repeated and unresolved quality defects that have led to loss of life and significant property damage. Speaking to ABC Dotstream, Customs Commission Communications Director Zerihun Assefa confirmed that the prohibition took effect on May 27, 2017, and will remain in place until the Chinese manufacturer addresses the identified technical and safety issues. “These defects have not only compromised vehicle performance but have also resulted in fatal accidents and destruction of property. Until Sinotruk takes the necessary corrective measures, their vehicles will not be allowed into the country,” Zerihun stated. The decision follows multiple incidents linked to structural and mechanical failures in Sinotruk models. According to the Commission, these recurring problems raised urgent public safety concerns, prompting the government to take decisive regulatory action. No Import Permits Issued Since the Ban Zerihun further clarified that since the enforcement date, the Commission has not issued any new import permits for Sinotruk vehicles. This marks one of the longest-standing import restrictions on a specific automotive brand in Ethiopia, reflecting the seriousness with which authorities are treating the matter. Background on Sinotruk in Ethiopia Sinotruk, a leading Chinese heavy-duty truck manufacturer, has been active in Ethiopia for years, supplying vehicles for logistics, construction, and public works. While popular for their affordability and payload capacity, the brand has faced repeated complaints over durability, braking systems, and other critical mechanical functions. Industry observers say the ban could have ripple effects on Ethiopia’s trucking and construction sectors, which rely heavily on imported vehicles. However, the Customs Commission insists that public safety remains the top priority, even if it means short-term disruptions in supply. The Commission has made it clear that the ban is not permanent — but lifting it depends entirely on Sinotruk’s ability to meet Ethiopia’s technical standards and safety regulations. Any future import approvals will be contingent on documented evidence of quality improvements and successful safety testing. Until then, importers are being urged to seek alternative suppliers, while existing Sinotruk vehicle owners are advised to conduct thorough maintenance checks and implement additional safety measures to mitigate risks.

Ethiopia’s Tax Revenues Sink to 7.5% of GDP, Leaving Billions on the Table

Ethiopia’s Tax Revenues Sink to 7.5% of GDP, Leaving Billions on the Table Addis Ababa — Ethiopia’s tax haul has collapsed to just 7.5% of GDP, the lowest in more than a decade and among the weakest in Sub-Saharan Africa, raising urgent questions over how the government will fund its post-war reconstruction and ambitious growth plans. The figure for the 2022/23 fiscal year puts Ethiopia far behind regional peers like Uganda (13.1%), Kenya (15.2%), and Rwanda (15.7%), and well short of the SSA median of 13.2%, according to a new World Bank–backed analysis. From Peak to Plunge Tax revenues once peaked at 12.4% of GDP in 2014/15, but have since slid almost five percentage points. Four sources account for nearly all of the decline: Value-added tax (VAT): −2.0 points Customs duties and surtax: −1.1 points Corporate income tax: −0.74 points Employment income tax: −0.36 points “These are the workhorses of the tax system,” the report notes. “When they falter, the whole system feels it.” A Fragile Tax Base Ethiopia’s revenue structure is unusually exposed to imports and public-sector spending, which together generate about 60% of federal tax income. As imports slumped and public investment was slashed in recent years, tax receipts fell almost mechanically. That dependence is risky: customs rates are already high by regional standards, and the public sector’s role as the sole VAT withholding agent means that when state spending dips, so do collections. Why Ethiopia Lags Peers The analysis breaks the country’s 5.5-point gap with the SSA median into three drivers: Structural constraints (≈2.2 points): Low income per capita, a large agricultural base, low urbanization, and a small manufacturing sector all depress taxable capacity. Policy gaps (≈2.1 points): Lower-than-average VAT rate (15% vs. 17.5% median), historically no VAT/excise on fuel or airtime (recently changed), and no taxes on financial transactions. Compliance weaknesses (≈1.2 points): Administrative gaps and leakages beyond what economic structure can explain. Compliance Is the Real Story Since 2015/16, about 1.8 percentage points of the tax ratio drop stems from widening compliance gaps, especially in VAT and corporate tax. Wholesale and retail trade — along with construction — have seen the steepest under-collection. Imports collapsing, public investment drying up, and formal wage growth lagging GDP have added further pressure. Reform Plans — and Risks Ethiopia’s National Medium-Term Revenue Strategy (NMTRS) aims to lift the tax ratio by a dramatic seven points by 2027/28, through both policy tweaks and administrative reforms. Two potentially game-changing — but risky — proposals from the report: Appoint large private firms as VAT withholding agents to replicate the compliance effect of public-sector procurement. Raise the VAT rate toward the SSA median — but only if compliance is shored up first to avoid widening the gap between compliant and non-compliant businesses. What It Means for Business For Ethiopia’s private sector, the tax landscape is shifting: VAT and corporate tax enforcement will tighten, with high-risk sectors facing closer audits. Large corporates may be pulled into VAT withholding, adding reporting burdens but also potential leverage in supply chains. Border taxes have peaked, signaling a pivot toward onshore compliance rather than import tariffs. The Road Ahead Reversing the revenue slide will require Ethiopia to re-engineer its tax base toward the private economy, while cleaning up compliance. Raising rates without first fixing enforcement risks driving more firms into informality. The choice, in short: stay import- and state-dependent — or build a broader, more resilient private-sector tax net. The next two years will show if policymakers have the political will to make that shift.

Watt Matters Most? Ethiopia’s Fight Over Powering Bitcoin or People

Watt Matters Most? Ethiopia’s Fight Over Powering Bitcoin or People Ethiopian Electric Power’s decision last week to freeze new cryptocurrency mining licences and begin phasing out existing operators has thrown one of Africa’s fastest-growing crypto hubs into uncertainty. The move comes despite the sector delivering an estimated $220 million in foreign exchange earnings during the last fiscal year—vital hard currency in a country facing persistent forex shortages. Yet officials say the growing power demands of crypto miners now threaten national energy security. A Market Ethiopia Built—And Now Wants to Slow Just three years ago, Ethiopia was virtually absent from the global crypto mining map. Then, in the wake of China’s 2021 crackdown, dozens of operators displaced from Asia began scouring the world for cheap, stable electricity. Ethiopia’s low tariffs, pro-mining regulatory stance, and abundant hydropower made it a surprise contender. By 2024, 25 licensed mining firms were active in the country, with another 20 pending approval. The scale-up was swift: EEP allocated 600 megawatts of capacity to the industry—about half of what it takes to power Addis Ababa. EEP’s own earlier projections painted an even rosier picture. It forecast data mining revenues could reach 109 billion birr ($1.9 billion) annually by 2026 if the sector continued importing equipment at current rates. But last week’s announcement shows a different calculation: the opportunity cost of powering server farms instead of homes and factories is now too high. A Heavy Draw on the Grid Crypto mining is inherently energy-hungry. In Ethiopia, the sector accounted for 27% of all electricity sales in the 2024/25 fiscal year—a figure that could approach 50% if pending licences were granted. While mining firms insist they use only surplus generation, industry experts challenge that narrative. “They are too power-intensive,” said Biniam Tufa, Deputy CEO at renewable energy company Green Scene. “These operations tap into capacity that could otherwise drive industrialization or rural electrification. The government underestimated the scale.” The problem isn’t just generation—it’s distribution. Half the country’s population still lacks access to electricity, and frequent blackouts plague even major cities. Concentrating mining operations around Addis Ababa puts additional strain on the urban grid, forcing trade-offs between residential supply, industrial demand, and crypto mining loads. Global Context: The Economics of Mining Migration Ethiopia’s trajectory mirrors a broader global relocation of crypto mining. After China’s 2021 ban, Kazakhstan, Russia, and the U.S. became major destinations—only for each to face its own political or infrastructure challenges. Kazakhstan saw miners consume 7% of national generation by late 2021, triggering rolling blackouts and a political backlash. Russia embraced mining as a sanctions workaround but faced logistical bottlenecks. The U.S., now the largest mining hub, is debating carbon taxes and local moratoriums to curb energy-intensive mining in states like Texas and New York. Ethiopia entered the market as a low-cost outlier, offering one of the cheapest kWh rates globally. But like Kazakhstan, it is discovering the fragility of that advantage when energy demand growth outpaces infrastructure investment. The Government’s Pivot EEP CEO Asheber Balcha confirmed that tax holidays and other incentives for miners have been withdrawn. “Low tariffs brought an influx of foreign operators, but the jobs they create are minimal compared to their electricity consumption,” Asheber said. “This conflicts with our mandate to power industrial and social development.” The new approach: Honor current contracts to avoid investor disputes Halt issuance of new licences Prioritize allocation to productive, job-rich sectors such as manufacturing and agro-processing Miners Push Back Industry players argue that the government risks undermining a nascent tech sector with global potential. They point to the foreign exchange benefits, investment inflows, and capacity-building in blockchain expertise and high-performance computing. Some miners also claim their operations can stabilize the grid by consuming excess energy during low-demand periods and scaling back during peak demand. Critics counter that such flexibility is rarely enforced in practice. GERD and the Off-Grid Proposal The imminent inauguration of the Grand Ethiopian Renaissance Dam (GERD) is set to boost generation by several thousand megawatts. On paper, this could support both industrial growth and crypto mining. But without rapid expansion of transmission and distribution infrastructure, much of this capacity could remain stranded power—generation that can’t be delivered to consumers. Some energy analysts suggest a compromise: relocating mining operations to off-grid sites using mini-grids and containerized units. These could power nearby rural communities during peak hours and run mining rigs during off-peak periods. Such models, already trialed in parts of West Africa, could help Ethiopia monetize surplus power without overloading the national grid. But profitability for miners would likely be lower than in grid-connected urban setups. The Broader Energy Challenge The mining debate underscores Ethiopia’s broader infrastructure bottlenecks. The country remains heavily reliant on imported power cables, transformers, and other hardware—slowing the pace at which generation gains translate into universal access. As Biniam bluntly put it: “Until we invest in the full electricity value chain—generation, transmission, and distribution—mining will be in direct competition with citizens for power.” The Strategic Choice Ahead For Ethiopia, the issue is less about the legitimacy of crypto mining and more about national priorities. The calculus: Short-term forex inflows vs. long-term industrialization Serving global blockchain networks vs. expanding domestic electricity access Betting on a volatile asset class vs. building a diversified, energy-powered economy If Ethiopia chooses to prioritize homes and factories over server farms, it would join a growing list of countries recalibrating their stance on mining. But if it finds a way to balance the two—perhaps via off-grid innovation—it could still leverage its hydropower advantage while keeping the lights on for its people.