Economists call for transparent forex market to tame depreciation

Experts at the Ethiopian Economics Association have called for better transparency in the foreign exchange market to prevent excessive depreciation, which they warn could worsen food insecurity. The Association conducted a survey in eight regions and Addis Ababa and Dire Dawa as part of a macroeconomic study, which its experts say discovered strong correlations between exchange rate fluctuations and inflation components—particularly non-food inflation. The findings suggest that currency depreciation has been a significant driver of inflation, beyond just monetary and demand-side factors. “This indicates that inflation is not merely a reflection of monetary conditions but also a consequence of deeper structural challenges, including supply-side rigidities and external cost pass-through effects,” reads the study. The authors describe the exchange rate variation among banks and the spread as “moderate” and “relatively close within the market”. However, they warn that failing to address supply-side constraints and secure economic diversification will result in continued macroeconomic fragility and inflationary pressure, particularly in response to external shocks and currency fluctuations. The study recommends narrowing the nearly 20 percent gap between official and parallel exchange rates through improved transparency in the forex market. It suggests reducing administrative controls, improving reserve management through export promotion, incentivizing remittances, and attracting foreign direct investment (FDI) as important tools. The study calls for measured liberalization to reduce volatility and promote a more efficient currency market. “Additionally, supporting domestic production, ensuring peace and security, and tailoring responses to regional inflationary trends will help control price pressures and reduce reliance on imports,” it reads. The authors want to see officials minimize transactional and logistical costs for essential imports like food and fuel, while implementing broader cost-control measures to address inflationary pressures. Diversifying exports by shifting from raw commodities to higher-value processed goods is also key, according to the study.

NBE revisits reserve rules to address industry’s liquidity problems

A directive that central bank regulators hope will reshape how commercial banks manage liquidity is the latest in a series of reforms undertaken by the National Bank of Ethiopia (NBE) over the past nine months. Governor Mamo Mihretu wants to see the draft directive improve liquidity for commercial banks grappling with a squeeze that has plagued the sector for over two years, made worse by a stringent credit growth cap imposed to tame inflation. The directive introduces a lagged reserve system to bolster financial stability, scrapping separate reserve and payment accounts and consolidating them into a single payment and settlement account. This could invigorate interbank lending, regulators say. A five percent daily minimum reserve will be automatically blocked, with excess funds released for banks’ use, according to the directive. Observers worry the minimum five percent could strain smaller banks, who are already under pressure to raise paid-up capital to five billion birr before a fast-nearing deadline and struggling with the 18-percent credit growth cap. The central bank will keep its seven-percent average reserve requirement in place, but will now base its calculations based on monthly deposit averages, not real-time balances. Regulators hope this will offer banks stability. The directive will also scrap weekly report requirements in a bid to cut compliance costs, replacing them with a bi-monthly schedule. The overhaul comes at a decisive period for the Ethiopian banking industry, which is grappling with inflation and currency devaluation as part of IMF and World Bank imposed reforms. The government recently set a minimum capital requirement for foreign banking entrants, and reports indicate banks such as Kenya’s KCB Group and South Africa’s Standard Bank have expressed an interest in Ethiopia’s underserved population. For banks, the directive is hoped to balance flexibility with discipline. The NBE is still seeking input from bankers, but regulators say the directive will likely be made effective in the near future.

US tariff regime offers new opportunities, poses risks for Ethiopian coffee trade

By Addis Getachew Experts and industry insiders caution that the 10-percent baseline tariffs that Ethiopia is subject to pay under the latest round of economic policy changes from Washington could have significant impacts on the country’s crucial coffee export trade. Although the administration of US President Donald Trump has announced a three-month pause on its plans to apply baseline tariff rates on most of the world, experts such as Demeke Tsegaye, a banker specializing in coffee export financing, see the tariffs could impact Ethiopian exporters in several ways. The US is the third-largest buyer of Ethiopian coffee, accounting for around a fifth of revenues each year. “The tariffs will have direct bearing on the cost; it will bring about an increase in cost. It is within the natural demand-supply principle. Because tariffs drive up the cost of coffee, demand in the US for Ethiopia’s coffee may go down as consumers opt for the cheaper and more readily available robusta coffee supplied in bulk by South American producers such as Brazil, Peru and Colombia, among others,” he said. However, he observes that the levying of higher tariffs on other coffee producing countries could also grant Ethiopia a competitive edge in the US market. “But other factors including the cost of production, logistics and general efficiency of the coffee supply chain should also be considered. The Latin American countries, in addition to producing coffee in bulk, are located close to the US market, therefore they have a better competitive advantage,” the independent coffee export financing consultant told The Reporter. “Ethiopia will need to dramatically improve its production and supply efficiencies by cutting on the long, unnecessary processes in the value chain.” While US green coffee traders and roasters are already feeling the effects of a period of nominally high coffee prices on the New York Arabica futures market (the ‘C Price’), they must now prepare to cover even pricier costs of goods, with many of the world’s top producing countries facing stiffer import costs, according to Roastlog. The National Coffee Association (NCA) of the United States has previously called for coffee to be exempted from new tariffs. “Every dollar of coffee-related imports generates USD 43 in value for the American economy, and coffee supports 2.2 million US jobs, all while being America’s favorite beverage,” Roastlog quoted NCA President William “Bill” Murray as saying in a statement. “Since coffee beans cannot be grown in most of the United States, trade policies should take into account the essential role of coffee trade in Americans’ daily lives and in the US economy, to ensure that Americans don’t face even higher coffee prices amid the current cost of living crisis.” Reports indicate that no less than 124 million people worldwide depend on coffee for their livelihoods. Conservative estimates put this number in Ethiopia at 25 million. All told, from farm to cup, between 600 and 800 million people across the globe work in the coffee industry. According to the Global Coffee Report (GCR), for the first time ever, the demand for coffee worldwide has surpassed supply, driving prices significantly upward. Coffee updates for 2025 already show a 12 percent increase in the price of coffee in the last six months, with the price of a pound of the green beans jumping to as high as USD 7.50 in January. It is more than three times the USD 2.40 a pound registered in August 2024, which, according to reports, was a 13-year high. Observers hope the rising prices could spark a fundamental transformation in the Ethiopian coffee trade, where exporters often sell at a loss in a bid to earn foreign currency to supplement other, more profitable lines of business. “There were two ways the exporters offset their imminent losses. Either they sold the dollars they earned to importers on wide margins, or they imported goods, such as vehicles, themselves and sold them at high prices in the local market,” said Demeke. “This was not a normal trading practice, and it prevented our coffee from being competitive in the international market.” The lack of competitiveness played a large role in dwarfing the coffee export industry, which accounts for a third of Ethiopia’s total export revenues. However, the forex reforms of mid-2024 have transformed the trade, and Ethiopian coffee exporters are now beginning to see real profits as a result. The cost for producing 17 kilograms of coffee (a unit colloquially referred to as a feresula) has jumped to around 8,000 birr, but, at the new exchange rates, this is the equivalent of around USD 3.30 per kilo, or around half the international market rate. Washington’s tariff regime affecting 182 countries with widely varying rates is expected to impact poor countries more heavily. For example, Lesotho, a Southern African nation that depends largely on its textiles industries for its export earnings, faces a 50 percent tariff. On April 9, the Trump administration announced a 90-day pause on the tariffs, offering a sigh of relief to global stock markets, which had been in a sharp dive following the initial announcement a few days prior.

Credit cap, security concerns squeezing bank profits: Wegagen prospectus

The central bank’s credit growth cap, liquidity crunches, and security threats are among the key threats to banking profits outlined in a prospectus submitted to the Ethiopian Securities Exchange (ESX) last month by Wegagen Bank. “The credit limit imposed by the National Bank of Ethiopia (NBE) has restricted credit expansion, thereby moderating profitability growth. This constraint is expected to persist for at least the next 12 months,” states the prospectus. The document refers to a cyclical liquidity problem peaking during tax seasons as customers withdraw funds for tax payments and reveals that ongoing conflict, particularly in the Amhara region, has led it to close branches. “Continued unrest in regions such as Tigray, Amhara, and Oromia impose operational and credit risks to the Bank. Provisions for loan losses remain considerable, demanding ongoing vigilance,” reads the prospectus. The document reveals concerns tied to the central bank’s ongoing reforms in interest rate policies and open market operations. Wegagen is poised to become the first firm to offer equity on the country’s maiden securities trading floor. The bank is in the process of registering all existing 6.22 million shares with the Ethiopian Capital Market Authority for listing on ESX. Wegagen has close to 14,600 shareholders, more than 5,200 of whom are employees who were allocated equity as part of their bonuses. They collectively hold 375 million birr in share capital, according to the prospectus. It indicates that Wegagen’s 10 biggest depositors hold a combined total of 10.9 billion birr in their accounts, equivalent to 21 percent of the bank’s overall deposits. The bank recorded 7.2 billion birr in interest income in 2023/24, up 32.4 percent from the year prior. Its paid-up capital is also well above the five billion birr limit required by the central bank.

Maritime Transport and Logistics Annual Revenue Reaches 48 Billion Birr

The Ethiopian Maritime Transport and Logistics Authority has announced a significant increase in its annual revenue, rising from 17 billion birr to 48 billion birr, attributed to reforms implemented in recent years. CEO Dr. Beriso Amelo recalled that prior to the recent wave of national reforms, the maritime and logistics sector faced serious challenges due to the lack of adequate policy support. He emphasized that the development and implementation of clear policies and strategic frameworks have played a vital role in achieving the current results. Dr. Beriso also highlighted that the establishment of the National Logistics Council was a direct outcome of broader economic reform efforts initiated during this period of change. According to him, these reforms enabled the institution to recover from a state of near-bankruptcy and transform into a profitable and sustainable entity. Currently, it provides maritime transport and logistics services at 350 ports. According to the Ethiopian Investment Commission, its annual revenue has grown from 17 billion birr to 48 billion birr. Dr. Beriso further stressed the importance of logistics services for national economic development. He noted that opening the sector to private operators through licensing will foster competition and improve efficiency. Additionally, he announced the launch of a system that allows customers to access services digitally from any location, enhancing accessibility and service delivery across the board.

Boeing Reaches Settlement to Avoid Civil Trial Over 2019 Ethiopian Airlines Crash

On March 10, 2019, Ethiopian Airlines Flight 302, a Boeing 737 MAX aircraft, crashed shortly after takeoff from Addis Ababa Bole International Airport en route to Nairobi Jomo Kenyatta International Airport. All 157 passengers and crew onboard perished, marking the deadliest aviation disaster in Ethiopian history. Among the victims were American citizens Antoine Lewis and Darcy Belengar. The crash came just months after a similar incident involving Lion Air Flight 610 in Indonesia in October 2018, triggering a global outcry and grounding of the entire 737 MAX fleet for nearly two years. Investigations later revealed that a key contributor to both crashes was a flawed software system known as the Maneuvering Characteristics Augmentation System (MCAS). The system, intended to automatically push the aircraft’s nose down under certain conditions, malfunctioned due to erroneous sensor data, overriding pilot commands and causing uncontrollable descents. The resulting fallout placed Boeing under intense regulatory and legal scrutiny, leading to congressional hearings, a temporary halt in MAX production, and a sweeping overhaul of aviation safety oversight. Between April 2019 and March 2021, families of crash victims filed multiple lawsuits against Boeing, alleging wrongful death, negligence, and fraudulent concealment of safety issues. These cases were consolidated and pursued through federal courts in Chicago, where Boeing’s corporate headquarters were located at the time. As of March 2025, 18 civil lawsuits remained unresolved. However, four of these cases—including those involving the families of Antoine Lewis and Darcy Belengar—have now been settled, according to sources close to the litigation. Boeing was set to begin its first civil jury trial related to the Ethiopian Airlines crash on Monday, April 7, 2025. The trial, to be held in Chicago, was expected to last two weeks and involve eight jurors and two plaintiffs whose family members died in the crash. However, late on Sunday night—just hours before jury selection was due to commence—settlements were reached with the plaintiffs. The legal team from Clifford Law Offices confirmed the out-of-court agreement. As is standard in such cases, the financial and legal terms remain confidential. Antonio M. Romanucci, Founding Partner of Romanucci & Blandin and lead counsel for the Lewis family, expressed hope that the settlement would bring a measure of closure and healing to the victims’ loved ones. While these settlements mark a partial resolution of Boeing’s legal liabilities, the aerospace giant still faces considerable challenges. Two additional civil trials are scheduled for July and November 2025, and 14 lawsuits remain active. Moreover, Boeing could be heading toward a criminal trial in June 2025, stemming from allegations that it misled regulators and failed to disclose critical information about the MCAS system during the aircraft’s certification process. The settlements represent another chapter in a long legal battle for justice on behalf of the crash victims. While Boeing has publicly expressed remorse and pledged to prioritize safety reforms, many families and aviation safety advocates continue to call for full accountability and systemic changes within both the company and regulatory bodies. For now, the recent agreements mark a pause in court proceedings for some, while the broader pursuit of justice continues.

Ethiopia Introduces ‘Ethio-Aid’ Fund Following USAID Suspension

Addis Ababa, Megabit 30, 2017 EC (April 8, 2025) — The Ethiopian government has announced the creation of a new initiative called ‘Ethio-Aid’, a national disaster response mechanism intended to address emergencies using domestically mobilized resources. The announcement comes in the context of reduced international aid, particularly following the suspension of assistance from the United States Agency for International Development (USAID). The Ethio-Aid program was presented during a parliamentary discussion on a new draft proclamation concerning disaster risk management. According to the draft, 3% of the national budget will be allocated annually to a dedicated disaster response fund. Based on the current budget of 1.5 trillion birr, this equates to approximately 45 billion birr per year. All residents—including individual citizens, public and private employees, institutions, and organizations—will be expected to contribute, either mandatorily or voluntarily. The draft proclamation specifies that both governmental and non-governmental entities will be part of this national contribution effort. The Ethiopian government stated that the goal of Ethio-Aid is to enhance the country’s capacity to respond to natural disasters, conflict-related emergencies, and other crises. In addition to addressing domestic needs, the initiative is also intended to support neighboring countries during times of hardship. The decision to launch Ethio-Aid comes after USAID suspended most of its humanitarian assistance to Ethiopia in 2023. The suspension followed concerns related to the diversion of aid and accountability issues during the conflict in northern Ethiopia. The halt has had a significant impact, particularly on populations reliant on food assistance, medical support, and emergency relief. According to humanitarian reports, millions of Ethiopians, including internally displaced persons and drought-affected communities, have been affected by the aid reduction. In light of these developments, Ethio-Aid is positioned as a long-term strategy to strengthen self-reliance in emergency response. Officials from the Disaster Risk Management Commission indicated that the funds collected will be used to build a permanent, well-resourced disaster response institution. While some observers have raised questions about the economic implications for citizens amid ongoing inflation and high living costs, proponents argue that mobilizing internal resources is necessary to ensure timely and coordinated responses to emergencies. Implementation of the Ethio-Aid program is expected to begin with the next fiscal year, pending final approval of the draft legislation and development of operational guidelines.

ETBC, Soy Afric Ltd., and Kazana Group Sign Landmark MoU to Transform Ethiopia’s Food Processing Sector

Addis Ababa, Ethiopia | April 4 2025— In a bold and strategic move to revitalize Ethiopia’s agricultural and agro-processing sector, Ethiopian Trading and Business Corporation (ETBC), Soy Afric, and Kazana Group have signed a Memorandum of Understanding (MoU) to collaboratively enhance soybean production, processing, and export. The agreement marks a strong commitment among the three entities to work toward a shared goal: strengthening the country’s soybean value chain from farm to market while delivering meaningful benefits to smallholder farmers and the national economy. The partnership reflects a synergy of complementary strengths. ETBC will take the lead in mobilizing and supporting smallholder farmers by providing access to quality inputs, while also helping navigate regulatory processes to ensure smooth project rollout. Soy Afric brings decades of experience in soybean processing and will offer technical expertise, buy-back arrangements, training, and post-harvest handling solutions to guarantee quality and efficiency. Meanwhile, Kazana Group will provide essential expertise in investment capital, support the establishment of of strategic partnerships, and open channels to regional and international markets for Ethiopian soy-based products, while overseeing the business development and strategic growth of the plant. Together, the three partners envision a practical and scalable model that elevates productivity, enhances market competitiveness, and ensures long-term sustainability for all players in the ecosystem. Central to this collaboration is the empowerment of smallholder farmers, who stand to gain from new opportunities for growth, income stability, and technical capacity. By shifting from subsistence farming to structured contract farming, the initiative will enable farmers to become part of a structured, value-added supply chain. This approach is designed not only to increase yields, but also to provide predictable demand, improved farm gate prices, and access to financial and agronomic support services. Beyond the economic benefits, the program is also expected to contribute to food security, job creation, and rural development by embedding resilience and innovation at every stage of the value chain. The partners plan to implement the initiative in phases, beginning with targeted pilot projects that will be closely monitored and refined before expanding to larger regions. The MoU lays the foundation for deeper collaboration, including the development of more formal agreements that will govern financing, roles, and responsibilities as the program progresses. This partnership comes at a critical time for Ethiopia, as the country seeks to diversify its agricultural exports, enhance agro-industrial performance, and create inclusive economic growth opportunities. The signing of this MoU signals a shared determination to unlock Ethiopia’s agricultural potential by aligning vision with action and represents a powerful model for development-led agribusiness in Ethiopia. About Ethiopian Trading and Business Corporation (ETBC)ETBC is a leading Ethiopian trading and business corporation engaged in various sectors, including trade facilitation of agricultural and industrial product, distribute products in domestic and foreign markets and support farmers to produce agro-product. With a strategic direction to move towards agro-processing and industrial investment and with a strong presence in Ethiopia’s market, ETBC plays a crucial role in enhancing the country’s trade, industrial growth, and business development through its extensive network and expertise. About Soy Afric LtdSoy Afric Ltd is an indigenously owned Kenyan agro-processing company that develops a broad range of customer-focused nutrition solutions tailored to specific needs. The company operates in three broad categories: Human Nutrition, Animal Nutrition, and Food Ingredients. Soy Afric Ltd is ISO Certified (ISO 22000:2018) and is a trusted supplier of nutritionally enhanced foods to relief agencies in Kenya, Somalia, DRC, Ethiopia, and Sudan. About Kazana GroupKazana Group is a progressive holding company committed to empowering entrepreneurs and driving economic transformation across Africa. With a diverse portfolio of over 18 companies in manufacturing, logistics, technology, and investment management, Kazana Group plays a key role in impact-driven investments. The company focuses on job creation, particularly for youth and women in rural areas, and leverages innovative strategies to develop sustainable businesses. For media inquiries or more information, please contact:Nigist Berta251 Communications, Kazana Group📞 +251919152297📧 nigist@251communications.com

Ethiopians Among Those Affected by Saudi Arabia’s Temporary Visa Ban Ahead of Hajj Season

Addis Ababa, Ethiopia – April 2025 Saudi Arabia has issued a temporary suspension on visa issuance for citizens from 14 countries, including Ethiopia, ahead of the upcoming Hajj pilgrimage. The suspension applies to Umrah, business, and family visit visas, and will remain in effect until mid-June, according to diplomatic and official sources. The affected countries include Ethiopia, Pakistan, India, Bangladesh, Egypt, Indonesia, Iraq, Nigeria, Jordan, Algeria, Sudan, Tunisia, and Yemen. This decision is part of the Kingdom’s intensified efforts to ensure the safe and regulated execution of the Hajj pilgrimage, which draws millions of Muslims annually from across the globe. For Ethiopian Muslims, the Hajj pilgrimage represents a once-in-a-lifetime spiritual journey, deeply rooted in religious and cultural tradition. Thousands travel to Mecca every year either for Hajj or Umrah, and the suspension has caused uncertainty for many who were preparing to depart in the coming weeks. Families who had planned reunions, and business travelers scheduled for meetings in Saudi Arabia, are also facing disruptions. Travel agencies across Addis Ababa and regional cities like Dire Dawa and Jimma have reported a wave of cancellations and refund requests, and several pilgrims are now scrambling to understand the implications of the new rule. Officials at the Saudi Embassy in Addis Ababa have confirmed that individuals already issued Umrah visas may still travel, but only until April 13, 2025. After that date, no new entries for these visa categories will be allowed until the suspension is lifted. Saudi authorities have emphasized that the decision was not targeted at any specific nationality, but rather a precautionary measure to prevent misuse of visa categories. In previous years, some travelers—Ethiopians included—entered Saudi Arabia on business, family, or Umrah visas and remained in the country to perform Hajj without official authorization. This created major challenges for Hajj organizers, including issues of overcrowding, increased pressure on accommodation and transportation systems, and serious public safety risks. In addition, some individuals have remained in the country beyond their legal stay, violating immigration laws and engaging in undocumented work, which further complicates Saudi Arabia’s labor and visa enforcement efforts. By tightening visa regulations in the months leading to Hajj, Saudi officials aim to ensure that only those with valid Hajj permits are present during the pilgrimage season, reducing the risk of unauthorized participation and improving crowd management. The Saudi Ministry of Foreign Affairs has warned that any individual found violating the visa conditions or overstaying beyond the permitted duration may face a five-year ban from entering the Kingdom. This applies equally to those who overstay Umrah, business, or family visit visas or attempt to join Hajj without official authorization. Saudi Arabia’s immigration enforcement will also increase during this period, with heightened surveillance, more checkpoints, and tighter airport screening procedures to ensure compliance. Ethiopia’s Ministry of Foreign Affairs and the Ethiopian Islamic Affairs Supreme Council have acknowledged the suspension and advised citizens to remain calm and follow official updates. A spokesperson from the Ministry urged all affected travelers to verify their visa status before attempting to depart and to refrain from seeking alternate or unofficial routes to perform the pilgrimage. “We encourage all Ethiopian Muslims to respect the rules of the host country and wait for the appropriate time and channels to resume travel,” the spokesperson said. “We are in active communication with our counterparts in Riyadh and will provide updates as soon as more information is available.” Local travel agencies, which usually see a surge in bookings ahead of the Hajj season, have expressed concern over the economic and emotional impact of the ban. Several agencies have said they were caught off guard, especially with many customers already having made payments for travel packages, accommodations, and other logistics. Community leaders within Ethiopia’s Muslim population, particularly in regions like Harar, Somali, and Oromia, are calling for calm and patience. “While this is deeply disappointing, especially for elders who may have saved for years to go on Hajj, we must respect the regulations of Saudi Arabia,” said Sheikh Abdulkarim Hassen, a religious leader based in Addis Ababa. “Let us use this time to reflect and prepare ourselves spiritually for when the opportunity returns.” In a parallel move to improve the Hajj and Umrah experience, Saudi Arabia has launched a new digital guide available in 16 languages to assist pilgrims in planning their journey. While the guide does not yet include Amharic, it is accessible in Arabic, English, French, and other widely spoken languages. The digital guide includes instructions on the rituals of Hajj and Umrah, health and safety precautions, travel tips, and downloadable PDFs and audio content through the Ministry of Hajj and Umrah’s website. Normal visa processing is expected to resume after mid-June 2025, depending on the situation and Saudi Arabia’s internal assessment. Until then, Ethiopian travelers are urged to: This temporary measure serves as a reminder of the importance of following legal travel channels and the evolving nature of global mobility, especially during high-demand periods like Hajj. While this year’s plans may be disrupted for many, there remains hope that restrictions will lift in time for future pilgrimages and travel to resume smoothly.