Ethiopia Sells $150M in Foreign Exchange Auction as Birr Weakens to 138.26/USD

Ethiopia Sells $150M in Foreign Exchange Auction as Birr Weakens to 138.26/USD Addis Ababa, August 5, 2025 — The National Bank of Ethiopia (NBE) has executed its largest foreign exchange auction to date, selling $150 million to 28 commercial banks at a weighted average rate of 138.2555 Birr per US dollar. The move marks another step in Ethiopia’s cautious shift toward a more market-reflective exchange regime. This ninth FX auction, held under the central bank’s managed float system, reflects ongoing depreciation of the Birr amid high forex demand, inflationary pressure, and IMF-backed reforms. 🔍 Details of Auction No. 9 – August 5, 2025 Amount Offered: $150 million Number of Participating Banks: 28 Weighted Average Rate: 138.2555 ETB/USD Auction Type: Regular Auction Number: 9 Compared to the previous auction on June 19, 2025, which closed at 136.6286 Birr/USD, today’s result shows a 1.19% devaluation in just over six weeks. 📊 Chronological FX Auction Data (2024–2025) 📈 Exchange Rate Trend: Gradual Devaluation Since the first regular auction in April 2025, the Birr has depreciated by nearly 5%, moving from 131.7 to 138.26 against the dollar. This is part of the NBE’s deliberate strategy to: Narrow the official and parallel market rate gap Boost formal remittance and investment inflows Address FX backlogs and import demands Meet structural benchmarks under IMF oversight 📌 What’s Next? The NBE has said the timing of future FX auctions will be based on market developments and announced in advance. Analysts expect the bank to continue expanding both the frequency and size of auctions as part of Ethiopia’s broader forex liberalization plan. For more, visit nbe.gov.et or follow @NBEthiopia on X (formerly Twitter). LEAVE A REPLY Cancel reply Save my name, email, and website in this browser for the next time I comment. Δdocument.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() );

Ethiopian Airlines Reports $28 Million Loss from Domestic Flights, Confirms Ongoing Fund Freeze in Eritrea

Ethiopian Airlines Reports $28 Million Loss from Domestic Flights, Confirms Ongoing Fund Freeze in Eritrea Addis Ababa, August 5, 2025 — Ethiopian Airlines Group has reported a $28 million loss from its domestic flight operations over the past fiscal year, according to CEO Mesfin Tasew. The loss, he said, stems from rising costs in foreign currency while domestic ticket prices remained largely unchanged amid macroeconomic reforms. Speaking at a press briefing on the airline’s annual performance, Mesfin addressed key issues raised by stakeholders, including soaring ticket prices and the airline’s frozen funds in Eritrea. Domestic Flights Operated at a Loss Mesfin noted that although international ticket sales are priced in U.S. dollars and automatically converted into local currency at the daily exchange rate, domestic flights are priced in Ethiopian Birr. He stressed that, despite the local currency’s devaluation over the past year, the airline refrained from significantly adjusting domestic fares. “The exchange rate has more than doubled, but we only made minor adjustments to domestic ticket prices,” he said. “As a result, we lost $28 million operating domestic flights.” The losses are primarily due to the dollar-based cost structure of the airline’s operations. Aircraft purchases, lease agreements, spare parts, and fuel are all priced in U.S. dollars. Mesfin warned that while the airline has absorbed these costs temporarily to maintain affordability for domestic travelers, it is unsustainable. “We cannot continue to operate at a loss. We’ve held prices down for a year to support stability, but we will begin adjusting fares to reflect rising costs,” he said. Fare Adjustments During Holidays To recoup costs, the airline plans to implement seasonal pricing adjustments—particularly during holidays. Outbound fares will rise while inbound return flights remain lower to prevent planes from flying empty. Mesfin cited examples such as the Qulubi Gabriel pilgrimage, where thousands fly to destinations like Al-Alu just before the holiday, but few return immediately after, leading to imbalanced flight occupancy. “We may operate up to 20 flights per day during such holidays. On the outbound leg, flights are full, but on return, they’re nearly empty. To cover that cost, the outbound fare must increase,” he explained. “We ask the public to understand this necessity.” Eritrean Funds Still Frozen The CEO also addressed the airline’s ongoing inability to repatriate funds held in Eritrea. As previously reported in July 2024, Eritrean banks blocked the airline from transferring its revenues back to Ethiopia. “Our funds remain frozen in Eritrea. We attempted to recover them through the legal system, but due to political and procedural barriers, we were unsuccessful. Releasing the funds will require a political solution,” Mesfin stated. Although the airline suspended commercial flights to Eritrea, it continues to operate through Eritrean airspace without issue. “We are not flying to Eritrea, but we use its airspace regularly. We’ve had no problems with Eritrea’s civil aviation authority. We also use Sudanese airspace when necessary,” he added.

Starlink Launches in Somalia,But Triggers Political Tensions with Somaliland

Starlink Launches in Somalia,But Triggers Political Tensions with Somaliland Starlink, the satellite internet division of Elon Musk’s SpaceX, has officially launched operations in Somalia, delivering high-speed, low-latency broadband across the Horn of Africa nation. The announcement—hailed as a transformative step for digital inclusion—has also sparked diplomatic friction with the breakaway region of Somaliland over territorial representation. The launch was confirmed early Tuesday via a brief post by Elon Musk on X (formerly Twitter): Elon Musk (@elonmusk)“Starlink now available in Somalia! 🇸🇴”August 5, 2025 – 12:31 AM EAT The corporate Starlink account echoed the message minutes later with a link to starlink.com/somalia, where residents and businesses across Somalia can now register for service. Broadband Access in a Low-Connectivity Nation Somalia’s internet penetration rate remains among the lowest in the world, with rural and nomadic communities often lacking any form of reliable connectivity. Starlink’s satellite-based service, which bypasses the need for ground infrastructure, is expected to improve digital access nationwide. According to the Somali National Communications Authority (NCA), Starlink was officially licensed in April 2025 following more than two years of discussions. The NCA hailed the development as a “major leap forward” in expanding the country’s digital infrastructure. Pricing details: Hardware cost: $390 USD (SOS 220,000) Monthly subscription: $70 USD (SOS 40,000) The service is live across major cities, including Mogadishu, Bosaso, Kismayo, and Baidoa. Territorial Map Sparks Controversy Despite the enthusiasm from Somali officials, Starlink’s coverage map drew sharp criticism from Somaliland—a self-declared republic that has maintained de facto independence since 1991. The map displayed Somalia as a unified country, without acknowledging Somaliland’s separate governance. Ina Makhatal, a senior Somaliland official, responded publicly on X: “Starlink devices are not available in Somaliland. Pursue a separate deal with Somaliland authorities & avoid using inaccurate maps…”(@inamakhtal) Her statement reflects long-standing tensions over Somaliland’s pursuit of international recognition. Though it operates its own government, central bank, military, and foreign missions, Somaliland remains unrecognized by the United Nations and most countries. To date, Starlink has not issued an official response to the criticism or clarified whether a separate agreement with Somaliland is under consideration. Part of Broader African Expansion Somalia becomes one of more than 20 African nations to access Starlink in 2025. The rollout follows launches in Chad, Niger, Liberia, and the Democratic Republic of Congo, as the company pushes to expand digital access across underserved regions globally. With full service now operational in Somalia, Starlink is expected to impact sectors ranging from education and healthcare to logistics and digital finance. Key Takeaways Starlink has officially launched in Somalia, bringing satellite-based broadband across the country. Elon Musk confirmed the rollout via a social media post on August 5. Somaliland criticized the use of a unified Somalia map, calling for separate engagement and recognition of its autonomy. Affordability and geopolitical complexity may shape the pace and effectiveness of the rollout.

Ethiopian Airlines Denies Reports of Aircraft Lease Talks with Russia

Ethiopian Airlines Denies Reports of Aircraft Lease Talks with Russia Addis Ababa – August 5, 2025Ethiopian Airlines Group CEO Mesfin Tasew has firmly denied reports claiming the airline is in negotiations to lease aircraft to Russia, calling the allegations “completely false.” The statement comes in response to a recent article published by Capital newspaper, which suggested that Ethiopian authorities were in talks with their Russian counterparts regarding a potential aircraft leasing arrangement—specifically, a wet-lease deal that would include aircraft, crew, maintenance, and insurance. According to the Capital report, the topic was raised during a bilateral meeting between Ethiopian and Russian officials held last month, where both sides expressed interest in expanding aviation cooperation. However, no formal agreement was reached, and the Ethiopian Civil Aviation Authority (ECAA) clarified that while discussions did take place, it has no mandate to instruct Ethiopian Airlines to lease aircraft and has not done so. Speaking to the press, CEO Mesfin outlined two primary reasons why Ethiopian Airlines is not pursuing such a deal: Fleet Demand:The airline is currently expanding its own operations and actively seeking additional aircraft to meet growing passenger and cargo demands. “We are in need of more planes ourselves,” Mesfin noted, emphasizing that leasing out aircraft is contrary to the airline’s current strategy. Sanctions and Compliance Risks:The CEO cited geopolitical and legal constraints as a more critical reason. “Russia is under U.S. sanctions, and Ethiopian Airlines has strong operational and commercial ties with the United States,” Mesfin stated. “We operate under international regulations and U.S. law, and we are not willing to take the risk of violating those laws.” Ethiopian Airlines is widely regarded as one of Africa’s most successful and professionally managed carriers. With a fleet of over 140 aircraft and growing global partnerships, the airline plays a strategic role in connecting the continent with the rest of the world. The international aviation outlet Simple Flying also mentioned the rumored lease in its coverage of the Russia-Ethiopia aviation dialogue but did not confirm any formal deal. The Russian government has expressed interest in leasing foreign aircraft to mitigate the impact of Western sanctions, which have severely constrained its access to new planes and spare parts. Nonetheless, Ethiopian Airlines appears to be steering clear of the geopolitical complexities, opting instead to focus on its growth strategy and maintain regulatory compliance with its Western partners.

Wegagen Bank Secures $85M Trade Finance Boost from TDB and Afreximbank

Wegagen Bank Secures $85M Trade Finance Boost from TDB and Afreximbank Wegagen Bank has secured an $85 million international trade finance guarantee facility through partnerships with the Eastern and Southern African Trade and Development Bank (TDB) and the African Export-Import Bank (Afreximbank). The facility is expected to enhance the bank’s capacity to support Ethiopian traders by easing access to Letters of Credit and trade-related guarantees. This strategic arrangement will empower Wegagen to scale up trade finance services for both importers and exporters, particularly small and medium-sized enterprises (SMEs), by reducing the credit risk burden on the bank. Such facilities are part of a broader continental effort by TDB and Afreximbank to bridge Africa’s estimated $100 billion annual trade finance gap. By sharing risk with local banks like Wegagen, the institutions enable wider participation in regional supply chains and bolster cross-border trade under the African Continental Free Trade Area (AfCFTA). The facility is also expected to support Ethiopia’s broader industrialization and export diversification ambitions. Founded in 1997 with an initial paid-up capital of 30 million birr, Wegagen has grown into one of Ethiopia’s largest private financial institutions. As of June 2024, the bank reported assets totaling 65.7 billion birr, with 45.1 billion birr in outstanding loans and 52.1 billion birr in deposits. It currently operates nearly 455 branches across the country. Financial results for the 2024/25 fiscal year are yet to be published. In June, the bank achieved PCI DSS v4.0.1 certification, signaling its compliance with the latest global standards for protecting cardholder data. The certification introduces stronger encryption protocols, tighter access controls, and more rigorous security testing — part of the bank’s ongoing efforts to enhance digital trust and reduce fraud. The trade finance deal follows a series of milestone moves by Wegagen, including its recent listing on the Ethiopian Securities Exchange and the launch of Wegagen Capital Investment Bank — the first private investment bank in Ethiopia.

Ethiopia’s Halal Meat Exports Surge to $120 Million, Driven by Gulf Demand

Ethiopia’s Halal Meat Exports Surge to $120 Million, Driven by Gulf Demand Ethiopia has recorded a sharp increase in earnings from halal meat and livestock by-product exports, generating $120 million in the fiscal year ending June 2025 — a 53% rise compared to the previous year, according to the Ethiopian Institute of Animal Development. The surge was largely driven by strong demand from Gulf nations, with Saudi Arabia and the United Arab Emirates dominating the market. Together, they accounted for nearly 79% of Ethiopia’s chilled sheep and goat carcass exports. The UAE alone absorbed 51% of shipments, while Saudi Arabia took 28%. In total, Ethiopia exported over 22,600 tonnes of halal-certified meat and animal by-products, including liver, kidneys, and other offal, all processed at export-standard abattoirs. While secondary markets such as Japan, Germany, and the U.S. purchased Ethiopian honey and beeswax, the Gulf states remained the primary destination for the country’s livestock products. Between July 2024 and April 2025, export earnings had already surpassed $100 million — a 28% year-on-year increase — underscoring robust demand for fresh, halal-compliant meat sourced from sheep, goats, cattle, and camels. Asrat Tera, Director General of the Institute, attributed the growth to strategic interventions, including breed enhancement, veterinary training, and widespread artificial insemination programs. These efforts led to the birth of nearly 2 million improved-breed calves in the reporting period. Despite the progress, the sector continues to grapple with obstacles. Exporters face mounting pressure to meet international halal certification standards, while also upgrading packaging, freezing, transport, and veterinary infrastructure to stay competitive in global markets.

Ethiopian Airlines Reports Record $7.6 Billion Revenue in 2025 Fiscal Year

Ethiopian Airlines Reports Record $7.6 Billion Revenue in 2025 Fiscal Year Ethiopian Airlines Group, Africa’s largest and most profitable carrier, has announced a record-breaking annual revenue of over $7.6 billion for the 2017 Ethiopian fiscal year. The announcement was made by Group CEO Ato Mesfin Tase, who attributed the achievement to strong demand for the airline’s services and continued expansion into new markets. According to the CEO, the revenue was primarily generated from passenger and cargo services, underscoring the airline’s strategic focus on growing both commercial and freight operations. Over the fiscal year, the airline transported more than 19 million passengers, marking a significant rise in demand despite multiple global disruptions in the aviation sector. In line with its ambitious Vision 2025 growth strategy, Ethiopian Airlines added 13 new aircraft to its fleet and launched six new international destinations, further expanding its global reach. These developments reinforced its position as a key aviation hub connecting Africa with the rest of the world. Ato Mesfin acknowledged that the fiscal year was not without its challenges. “The global airline industry faced a number of disruptions, particularly due to conflicts and instability in various countries, which affected flight schedules and operations,” he said. “Despite these headwinds, Ethiopian Airlines remained resilient and continued to provide safe, reliable, and efficient service.” The airline’s strong performance reflects its ongoing investments in fleet modernization, digital systems, customer service, and regional partnerships. As it continues to expand, Ethiopian Airlines remains a symbol of national pride and a critical driver of Ethiopia’s economic integration with global markets.

National Bank of Ethiopia Announces $150 Million Forex Auction to Ease Currency Pressure

National Bank of Ethiopia Announces $150 Million Forex Auction to Ease Currency Pressure In a move signaling increased momentum in foreign currency management, the National Bank of Ethiopia (NBE) has announced plans to hold its ninth foreign exchange (forex) auction, scheduled for Tuesday, August 5, 2025. The central bank has allocated $150 million USD for this round—tripling the amount offered in the previous auction. This decision follows a notable rise in foreign currency inflows at the start of Ethiopia’s new fiscal year, which began on July 8. Officials say the auction aims to stabilize the forex market and address pent-up demand among importers and other dollar-dependent sectors. Background and Trends NBE had paused forex auctions for over a month after conducting its eighth round, which released $50 million USD. In that round, the official exchange rate stood at 136.62 Ethiopian Birr per US dollar—a figure significantly higher than the central bank’s reference rate, reflecting ongoing depreciation pressures and high demand for foreign currency. Despite previous government pledges to move toward a more flexible and market-based exchange rate regime, Ethiopia still operates a managed float system, where NBE intermittently supplies hard currency through controlled auctions to selected sectors like fuel, medicine, and telecom equipment. Why This Matters Largest Auction Yet: At $150 million, this will be the largest forex auction under the new administration and may help ease the backlog for essential imports. Signal of Improved Inflows: The move reflects growing foreign currency receipts—likely from exports, remittances, and multilateral funding. Step Toward Liberalization: While the forex regime remains tightly managed, the frequency and scale of auctions are seen as a baby step toward gradual liberalization in line with Ethiopia’s IMF-backed economic reform roadmap. Policy Shift or Stopgap? The National Bank clarified that forex auctions will continue as needed, rather than on a fixed schedule, allowing it to respond flexibly to macroeconomic conditions. However, critics argue that without deeper structural reforms, these auctions only provide temporary relief to a system under strain. What’s Next? Market watchers will be looking at: The clearing exchange rate from Tuesday’s auction; Which sectors get priority access to the $150 million; Whether this signals a resumption of regular auctions, potentially aligning with IMF reform benchmarks. As Ethiopia continues its economic transition, foreign exchange policy remains a key flashpoint—where fiscal discipline, structural reforms, and political stability all intersect.

A $4.5 Billion Drop Overnight: What’s Behind the Shake-up of Al Amoudi’s Empire?

A $4.5 Billion Drop Overnight: What’s Behind the Shake-up of Al Amoudi’s Empire? A Deal that Reshaped a Billionaire’s Empire: How the Sale of Preem Erased $4.5B from Al Amoudi’s Net Worth ADDIS ABABA – A dramatic plunge in the wealth of Saudi-Ethiopian billionaire Mohammed Al Amoudi, which saw his net worth plummet from approximately $10.5 billion to $5.98 billion around April 4, 2025, can be attributed to a single, monumental event: the sale of Preem, his prized asset and Sweden’s largest oil refiner. The sudden drop, which wiped out over 40% of his fortune in a single stroke, was not the result of a market crash but a strategic divestment that has fundamentally altered the composition of his vast industrial portfolio. The timing of the sale announcement, with news breaking in early April that Al Amoudi’s Corral Petroleum Holdings AB had agreed to sell Preem to Swiss-based VARO Energy, directly correlates with the precipitous decline. This move to offload his most significant holding triggered an immediate and substantial revaluation of his overall wealth by financial indexes. The Crown Jewel: What is Preem and Why Was It So Valuable? To understand how the sale of one company could have such a colossal impact, it’s crucial to appreciate the significance of Preem in Al Amoudi’s empire. Market Leader: With a refining capacity of over 18 million cubic meters of crude oil annually, Preem accounts for approximately 80% of Sweden’s refining capacity. This makes it a critical piece of infrastructure in the Scandinavian energy market. Pioneer in Renewables: Recognizing the global shift in energy, Preem had been actively investing in the transition to renewable fuels. Before the sale, it was already a significant producer of biofuels, with ambitious plans to further increase its renewable production capacity. This forward-looking strategy made it an attractive acquisition target for companies like VARO Energy, which are looking to bolster their own green energy credentials. The sale to VARO Energy was, in fact, framed as a move that would create Europe’s second-largest renewable fuel producer. This highlights Preem’s value not just as a traditional oil refiner, but as a key player in the future of energy. A Strategic Pivot: Why Sell Now? While the exact motivations for the sale remain private, the move can be analyzed from a strategic perspective. The sale of a legacy fossil fuel asset, albeit one with a growing renewables arm, could be interpreted as a strategic pivot by Al Amoudi. The capital unlocked from this deal—estimated in the billions—provides immense liquidity that could be redeployed into other ventures, potentially in sectors with higher growth potential or less exposure to the volatility of the energy markets. The broader economic context may have also played a role. Sweden’s economy was in a period of recession in early 2025, which can influence major investment decisions. However, the primary driver appears to be the strategic value of Preem to the buyer, VARO Energy, and the opportunity for Al Amoudi to cash in on a highly valuable asset. What’s Next for the Al Amoudi Portfolio? With Preem no longer under his control, Al Amoudi’s portfolio is now more heavily weighted towards his other significant holdings, which include: Granitor: A Swedish holding company with interests in property development, infrastructure, and consulting. Ethiopian Investments: A diverse range of assets in his country of birth, including mining, agriculture (coffee and rice), and real estate, the performance of which is watched closely here in Addis Ababa. The sale of Preem marks a new chapter for Al Amoudi’s business empire. The key question now is how the proceeds from this landmark deal will be reinvested. Observers will be watching closely to see if he doubles down on his existing interests in Sweden and Ethiopia, or if he diversifies into new sectors and geographies, continuing to reshape his legacy as one of the world’s most prominent and dynamic investors.