KCB in Talks to Acquire Up to 40% Stake in Ethiopian Bank

KCB in Talks to Acquire Up to 40% Stake in Ethiopian Bank Nairobi, August 20, 2025 – Kenya’s largest lender, KCB Group Plc, is in discussions to purchase as much as 40% of an Ethiopian bank, positioning itself as one of the first foreign lenders to enter Africa’s second most populous nation following recent regulatory reforms. Ethiopia’s parliament passed legislation earlier this year allowing international banks to operate either through branches, special subsidiaries, or minority equity holdings of up to 40% in local institutions. The move is part of the government’s broader economic liberalization agenda. KCB confirmed the talks but declined to specify which institution it is targeting. The Nairobi-based lender said acquiring an existing stake would be a more efficient entry strategy than establishing a new bank from scratch. Market Potential Ethiopia’s financial industry is dominated by the state-owned Commercial Bank of Ethiopia, with private lenders playing a much smaller role. Formal financial penetration remains low, giving foreign banks like KCB an opportunity to expand rapidly in an underserved market. “The acquisition option significantly reduces cost and time compared to a greenfield investment,” KCB said in a statement. Regional Expansion KCB already operates in six markets across East Africa, including Uganda, Rwanda, Tanzania, and South Sudan. A foothold in Ethiopia would mark a significant step in its regional expansion strategy and give it exposure to a country of more than 120 million people. Analysts say KCB’s move could pave the way for other foreign lenders eyeing the Ethiopian market, which has historically been closed to outside competition. Next Steps Talks remain ongoing and no final agreement has been announced. If completed, the deal would represent one of the first foreign bank entries under Ethiopia’s new financial sector framework. Key Takeaway: KCB’s planned acquisition underscores both the appetite of regional lenders for growth beyond saturated home markets and Ethiopia’s gradual shift toward financial sector liberalization.

Ethiopian Airlines to Inaugurate New Chinese-Built Headquarters in 2026

Ethiopian Airlines to Inaugurate New Chinese-Built Headquarters in 2026 Addis Ababa – Ethiopian Airlines Group is preparing to move into a new state-of-the-art headquarters by August 2026, as Africa’s largest carrier continues to expand its infrastructure base. The project, financed and built with Chinese expertise, is one of the most significant developments in the airline’s history. A Landmark Development The new headquarters consists of six interconnected buildings covering more than 33,500 square meters. Once completed, the complex will house the airline’s commercial, corporate, and customer service divisions, consolidating many of its core operations under one roof. The centerpiece is a 45-meter-high main office block, whose structure was recently completed in a topping-out ceremony attended by Ethiopian Airlines executives and representatives of the China Civil Engineering Construction Corporation (CCECC), the contractor in charge of the project. Commitment to Timely Delivery Group CEO Mesfin Tasew hailed the progress as a milestone for the company’s long-term growth. “We are determined to complete this project on schedule and with the highest quality standards,” he said, reaffirming the airline’s trust in CCECC’s capabilities. CCECC general manager Chen Sichang echoed that commitment, noting that the topping-out was only the beginning of the final stretch. “We will continue to work with diligence and perseverance to deliver a headquarters that reflects the stature of Ethiopian Airlines,” Chen remarked. Broader Expansion Strategy Construction of the headquarters officially began on August 30, 2023, as part of the airline’s broader push to modernize and expand its infrastructure. Beyond this project, Ethiopian Airlines has ambitious plans to build a new mega airport in Bishoftu, about 42 kilometers southeast of Addis Ababa. At the ceremony, Mesfin invited CCECC to take part in that future project as well, underscoring the airline’s growing reliance on international partnerships to fuel its next phase of growth. With the headquarters on track for completion, Ethiopian Airlines is set to reinforce its role as a global aviation leader and a critical driver of Ethiopia’s economic transformation.

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.