Ethiopian Parliament Approves Proclamation Granting Foreigners the Right to Own Immovable Property

Ethiopian Parliament Approves Proclamation Granting Foreigners the Right to Own Immovable Property Addis Ababa, June 24, 2017— Ethiopia’s House of People’s Representatives has formally approved a new proclamation granting foreign nationals the right to own immovable residential properties, marking a significant policy shift aimed at attracting foreign investment in the country’s housing sector. The legislation, which passed after thorough debate in Parliament, was presented by the House’s Urban, Infrastructure, and Transport Affairs Standing Committee. During the session, committee representatives fielded numerous questions from lawmakers seeking clarification on the scope and implications of the new law. Committee members emphasized that while Ethiopia’s land remains owned by the state and the people collectively—meaning neither citizens nor foreigners can buy or sell land itself—the proclamation specifically enables foreigners to acquire ownership of immovable residential structures built on leased land. “This measure is designed to encourage foreign investment in housing development without undermining the constitutional principle that land is publicly owned,” the Standing Committee explained. To regulate and manage this investment channel responsibly, the proclamation sets a minimum investment threshold of $150,000 for foreign nationals seeking to own residential property in Ethiopia. The amount was determined based on current real-estate market conditions in the country. However, some Members of Parliament expressed concern that the $150,000 threshold was too low. They warned it could potentially lead to an influx of foreign buyers, driving up demand and prices while also putting pressure on urban infrastructure. Addressing these concerns, Professor Mohamed Abdo, Chairman of the Standing Committee, clarified that the proclamation was carefully drafted to prevent such outcomes. “The provision only covers the primary applicant along with their spouse and children,” he explained. “This restriction ensures that granting home ownership rights to foreigners will not lead to unchecked population growth or large-scale migration into Ethiopian cities.” Professor Mohamed also pointed out that while the current minimum investment requirement is set at $150,000, it is not static. “This amount will be revised over time to reflect market changes and policy needs,” he noted, suggesting that Ethiopia will retain flexibility to adjust thresholds to balance investor interest with local housing affordability. Moreover, the proclamation stipulates that foreign investors wishing to develop or purchase residential properties outside of Addis Ababa will be subject to the laws and regulations of the respective regional governments. This provision is intended to respect Ethiopia’s federal system and ensure that local authorities have a say in managing foreign investment in their jurisdictions. By facilitating controlled foreign participation in the housing market, the government aims to boost investment, expand housing supply, and stimulate the broader construction sector, while safeguarding the rights of Ethiopian citizens and maintaining public ownership of land.

Safaricom Ethiopia’s Active Customer Base Surpasses 10 Million

Safaricom Ethiopia’s Active Customer Base Surpasses 10 Million Addis Ababa, June 24, 2017 — Safaricom Ethiopia has announced that its 90-day active subscriber base has reached 10 million customers nationwide, marking a significant milestone nearly four years after receiving its telecommunications license. Wim Vanhelleputte, CEO of Safaricom Ethiopia, shared the update during a press briefing, highlighting the company’s substantial contribution to Ethiopia’s telecom sector and economy. “In these four years of operations, Safaricom Ethiopia has invested over 300 billion birr in building and expanding its network and services,” he said. Of the 10 million active customers, 7.1 million are regular users of mobile data services, reflecting Ethiopia’s growing demand for internet connectivity and digital services. Safaricom Ethiopia currently employs around 900 staff members, of whom 97 percent are Ethiopian nationals. The company has also supported the wider economy by creating temporary employment opportunities for over 20,000 people through its operations and related projects. “We are adding an average of 31,000 new customers every day,” Vanhelleputte noted, underscoring the strong momentum in subscriber growth. He added that approximately 75 percent of Safaricom Ethiopia’s customers are considered regular, active users of its services. While celebrating these achievements, the CEO also acknowledged challenges the company has faced in Ethiopia’s competitive landscape. “Over the past four years, we have faced challenges given that our main competitor is government-owned,” he remarked, in reference to Ethio Telecom’s dominant market position. Despite this, Safaricom Ethiopia continues to collaborate with its rival through infrastructure-sharing agreements. The CEO confirmed that the company will pay $3 million to Ethio Telecom for network infrastructure rental. He also indicated that Safaricom Ethiopia remains committed to fulfilling its tax obligations via the government’s Telebir platform. Safaricom Ethiopia’s rapid growth is seen as a sign of the country’s liberalizing telecom sector, which is opening up new opportunities for investment, competition, and expanded connectivity for millions of Ethiopians.

National Bank of Ethiopia Lifts Mandatory Bond Purchase Requirement for Commercial Banks

National Bank of Ethiopia Lifts Mandatory Bond Purchase Requirement for Commercial Banks Addis Ababa – In a significant shift in monetary policy, the Monetary Policy Committee (MPC) of the National Bank of Ethiopia (NBE) has decided to lift the directive that required all commercial banks to purchase long-term government bonds. The decision was announced following the MPC’s third meeting of the fiscal year on June 23, 2017 (Ethiopian Calendar). The directive in question, labeled MFAD/TRBO/001/2022, was introduced in January 2022 as part of the government’s strategy to finance its budget deficit through domestic borrowing. Under this regulation, commercial banks were compelled to allocate 5 percent of their annual loan disbursements to the purchase of five-year treasury bonds. According to the Ministry of Finance’s public debt records, banks have collectively invested 94 billion birr in these bonds between the directive’s inception and June 30, 2024. The National Bank’s official statement explained that the committee’s decision to rescind this mandatory purchase requirement reflects evolving fiscal conditions in the country. Specifically, it cited a substantial improvement in the government’s revenue collection capacity and increased reliance on both external financing and market-based domestic borrowing mechanisms. The committee argued these developments reduce the need for enforced bank participation in funding the budget deficit through long-term bond purchases. “The committee believes that it is appropriate to lift this mandatory directive imposed on banks now, given the significant improvement in the government’s revenue collection capacity, and the government’s use of external and market-based domestic borrowing options to finance its budget deficit,” the NBE statement read. While the committee has finalized its recommendation to remove the directive, the move is pending final approval by the National Bank’s Board of Directors. Background and Implications The mandatory bond purchase requirement was originally introduced as an emergency measure to help the government secure predictable, low-cost domestic financing in the context of budget pressures and limited external borrowing options. Critics in the banking sector had warned that the measure reduced liquidity available for private-sector lending, potentially dampening economic activity. By lifting the requirement, policymakers hope to ease such constraints and enable banks to allocate more resources toward credit for businesses and households. Analysts suggest that the decision may signal a broader shift in government strategy, aiming to deepen the domestic capital market and diversify financing sources rather than relying heavily on captive bank funding. However, some caution that the removal of the requirement could lead to a greater reliance on external debt or short-term market borrowing, with implications for debt sustainability and interest rates. Continued Credit Growth Ceiling In the same meeting, the MPC also addressed the question of credit growth in the banking system. Despite inflationary pressures in the economy, the committee chose to maintain the existing ceiling of 18 percent on banks’ annual credit growth at least until September 2018 (Ethiopian Calendar). The central bank has enforced this credit growth limit in an effort to curb inflation and maintain macroeconomic stability. Inflation has been a persistent challenge for Ethiopia, eroding purchasing power and complicating efforts to stabilize the economy. The MPC’s decision to retain the cap reflects a cautious approach to balancing the need for economic growth with the imperative to contain price rises. 1 COMMENT Hussen Ali Seid July 2, 2025 At 12:32 am My market would digital assets Crypto currency and electronic marketing systems all would look my but the first Tanks Crypto currency and Airdrop company or Alibaba company my best friend school learning Appeal electronic marketing systems all would look my coin cap marketing look BTC coin ETH coin BNB coin solo coin Doge coin XRP coin my Ton of them Learn so more Tanks second would Cryptographically digital assets our support help me my My market would digital assets Crypto currency and electronic marketing systems all would look my but the first Tanks Crypto currency and Airdrop company or Alibaba company my best friend school learning Appeal electronic marketing systems all would look my coin cap marketing look BTC coin ETH coin BNB coin solo coin Doge coin XRP coin my Ton of them Learn so more Tanks second would Cryptographically digital assets our support help me my Comments are closed.

Ethiopia Starts Supplying Electricity to Tanzania via Kenya

Ethiopia Starts Supplying Electricity to Tanzania via Kenya Ethiopia has begun exporting electricity to Tanzania for the first time, delivering power through Kenya’s high-voltage transmission network in a successful pilot that marks a milestone in regional energy trade. Kenya Electricity Transmission Company (KETRACO) Managing Director announced on social media that the trial transmitted power from Ethiopia along Kenya’s 400kV Suswa–Isinya line to the Kenya–Tanzania interconnector. The power flow increased the load on the line from 225 megawatts to 262 megawatts, demonstrating the corridor’s operational reliability and smooth cross-border connectivity. This is the first time Ethiopian electricity has reached Tanzania via Kenya’s grid, establishing Ethiopia as an emerging regional power supplier with growing influence beyond its borders. The pilot was conducted under the framework of the Eastern Africa Power Pool (EAPP), a 13-member initiative designed to promote energy sharing and enhance power reliability across East Africa. Ethiopia, which already supplies around 200 MW to Kenya under a long-term agreement, is consolidating its position in regional markets as its hydropower capacity expands. Financing for the transmission infrastructure enabling this pilot was provided by Kenya’s National Treasury alongside development partners, including the World Bank, African Development Bank, French Development Agency, and European Investment Bank. These interconnections are part of broader plans to link Eastern and Southern Africa’s electricity grids.

NBE Governor Blames ‘Bad Practices’ at Banks for Stubborn Forex Rate Disparity

The Governor of the National Bank of Ethiopia (NBE) says mismanagement at commercial banks is fueling the gap between official and parallel forex exchange rates, which has proven difficult to close nearly a year after liberalization. The stubborn discrepancy was among the several topics Mamo Mihretu addressed while facing questions from members of Parliament’s Budgetary and Financial Affairs Committee this week. MPs grilled the Governor about inflation, banking services, project implementation, audit recommendations, and other issues falling under the purview of the central bank. Mamo conceded that the gap between the official and parallel rates remains problematic, and acknowledged that importers have increasingly been prompted to look for alternative sources of forex—a situation he says comes down to systemic and procedural errors at banks. Commercial banks are currently offering an estimated average of 134 Birr for one US Dollar, while rates in informal channels are nearer to 160 Birr/USD. While the parallel market rate can fluctuate, recent reports indicate a decrease in the premium due to regulatory action and increased enforcement against illegal forex trading. The MPs criticized the Governor and the administration’s IMF-backed economic reforms for failing to narrow the gap further. Mamo pointed out the disparity exceeded 100 percent before the currency was floated in late July 2024, and argued it, at times, had fallen to as low as five percent. “That was a result of overall economic activity, and as demand for forex in the parallel market rises, it was all too logical for the premium between the official and parallel market to go higher accordingly,” he said. “In the context of our country, the kind of premium shown is inherently unavoidable.” One of the reasons, according to the central bank Governor, is the fact that “we have not opened a capital account for importers to access, though the reform stipulates that importers will have access to forex as per their needs via the regular channels.” He argued the unavailability of capital accounts creates demand from importers for easy, flexible access to forex. “To bring about a par between the official and parallel market exchanges requires steady and persistent work geared towards tackling the causes,” he said. “Our studies show that one of the reasons for high premiums in the parallel market comes down to gaps in the banking system.” He cited examples of importers being unable to access forex for down payments for goods from countries like China and Turkey. “The present system does not allow them to apply for advance payments whereas the source countries demand financing instruments guaranteeing advance payments have been settled. This is one of the reasons the demand for the parallel market remains high,” said Mamo. He told MPs that the NBE has issued a directive for banks to fine tune their systems in line with importers’ advance payment requirements, adding that regulators have also set the maximum allowable thresholds. The second problem, according to him, is red tape and bureaucracy at banks. “The bank approval process after importers have applied for advance payments is lengthy,” said Mamo, arguing that commission fees and other charges for forex services at banks are also pushing away importers. “To tackle this problem, we again issued a directive limiting the charges and fees expected of importers to be not more than  four percent,” he said. Asked about recent reports of a developing liquidity crisis within the banking industry, the Governor said mismanagement is to blame. “Bad practices at some banks often leaves them in short supply of cash,” he told MPs. However, industry insiders who spoke to The Reporter argue the liquidity crunch is attributable to imbalances in deposit-lending growth, inflation and economic instability, crowding out by government borrowing, and structural inefficiencies in deposit mobilization. They contend that commercial banks are being hampered by the central bank’s policies, including restrictions on forward exchange contracts (FEC) that allow banks to buy or sell a specific amount of one currency for another at a predetermined rate on a future date. Some business analysists also argue that foreign currency shortages and lower remittances have weakened banks’ liquidity, particularly their foreign exchange positions. They  contend that weak export performances have reduced forex inflows and, by extension, liquidity tied to forex transactions. Insiders who spoke to The Reporter all agree that cash shortages and currency hoarding have eroded trust in the financial system, particularly following the demonetization process of late 2020. Cash hoarding remains prevalent, meaning less money is circulating through formal channels, while the parallel market for forex further drains cash from the formal banking system. Data from the World Bank indicates that less than half of all Ethiopians hold a bank account. The country’s 31 commercial banks depend largely on urban centers like Addis Ababa for the bulk of their deposits, creating geographic concentration risks.

Gov’t Scraps Ogaden Gas Export Plans in Policy Shift

Mines Ministry revives import reduction ambitions The government has officially scrapped long-touted plans to export natural gas from the Ogaden Basin through a pipeline to Djibouti, citing persistent financing hurdles and implementation delays. ‎The cancellation, confirmed in the Ethiopian Energy Outlook 2025, represents a major shift in national energy policy—moving away from export ambitions and toward domestic utilization. ‎“The Government of Ethiopia has cancelled the planned natural gas extraction in the Ogaden region, and a pipeline project to Djibouti for export as Liquified Natural Gas (LNG),” reads the report. ‎Jointly prepared by the Ministry of Water and Energy, Ethiopian Electric Power (EEP), Ethiopian Electric Utility (EEU), and the Petroleum & Energy Authority, the Energy Outlook notes that “challenges in securing project financing and slow project implementation” contributed to the government’s decision to cancel the project. ‎The proposed pipeline—stretching 767 kilometers and initially designed to transport 460 PJ (petajoules) of gas annually, equivalent to 25 percent of Ethiopia’s total final energy demand—was cancelled as early as 2022. However, this is the first time the government has publicly acknowledged the decision in an official policy document. ‎The report warns about the possible repercussions of the government’s decision. ‎”It [the cancellation] limits Ethiopia’s ability to generate revenue from natural gas exports and diversify its energy sources,” it reads. ‎Still, it outlines a strategic shift. ‎ “Use of domestic natural gas would increase CO₂ emissions, but could be a relevant option to balance generation in dry years and reduce the need for fertilizer imports,” reads the energy outlook paper. ‎In a dry year, Ethiopian hydro plants get 20 to 25 percent less water than in a normal year. It may be a challenge to accommodate such variable demand in a future natural gas project, according to the document. ‎The official announcement of the policy shift reflects previous signals from the Ministry of Mines. ‎Less than a year ago, in October 2024, the Ministry’s 2024/25 planning document laid out an ambitious plan for LNG production for household energy consumption by mid-2025. ‎The Ministry’s planning document at the time stated that Poly-GCL, a joint venture between the Chinese Poly Group Corporation and Hong Kong’s Golden Concord Group, would begin producing 180,000 cubic meters of LNG per day by mid-2025, while setting a timeline for export activities. ‎However, the planning document still retained the country’s vision to gain from exports. It revealed Ministry officials’ ambitious plan to see the company engage in LNG exports by mid-2026, with the construction of roads and other necessary infrastructure at the extraction site scheduled to begin by April 2025. Poly-GCL was slated to execute a three-phase production plan, the third phase of which consisted of using the natural gas deposits as input for the government’s long-held ambition to produce chemical fertilizers domestically. Financial and technological feasibility studies for the venture were scheduled to be finalized by the end of 2024, according to the Ministry’s 2024 planning document. ‎It also stated that Ethiopia registered more than USD 825 million in investment capital related to the granting of natural gas concessions to investors in 2023/24. ‎However, reports indicate that Ethiopia’s ambitions for natural gas production and LNG exports have faced repeated setbacks. Poly GCL, a subsidiary of the GCL Group, was first granted a concession to explore and produce natural gas in the Somali region in 2013. ‎In June 2018, the Chinese company conducted crude oil production tests in the Calub and Hilala oil fields. Calub has 11 wells—all of which are productive. ‎In 2021, the government signed a joint development agreement with the Moroccan OCP Group to establish a fertilizer production plant in Dire Dawa. There have been no indications of progress on the project since. A year later, former Mines Minister Takele Uma revoked the concession for Poly GCL, allegedly for falling behind schedule as stipulated in the company’s licensing agreement. That same year, Netherland, Sewell & Associates, an American firm specializing in petroleum resource analysis, certified the presence of seven trillion cubic feet of natural gas in Ogaden. ‎The Ministry reversed its decision in June 2024, and the GCL Group was expected to begin producing 180,000 cubic meters of LNG per day by July 2025, according to the planning document. ‎Despite the 2025 Energy Outlook’s confirmation of the cancellation of the planned natural gas extraction in the Ogaden region and the pipeline project to Djibouti for export as LNG, the Ministry of Mines appears to be reviving some aspects of the project—albeit with a new focus. ‎“The Ministry of Mines is now exploring a new project with a focus on domestic use, for instance production of fertilizer,” the report notes. It also mentions interest in collaborating with EEP to use gas for power generation, especially during hydropower shortages. ‎Natural gas is now being positioned as a strategic substitute for imported petroleum products, which cost Ethiopia over USD four billion annually, according to the outlook. ‎It also cites proven gas reserves of 2.6 trillion cubic feet (2,800 PJ), with total potential reserves estimated at 6.9 trillion cubic feet (7,200 PJ)—enough to meet fertilizer, electricity, and industrial needs for more than 50 years. ‎In line with this, the October 2024 document obtained by The Reporter also revealed that the Ministry had signed an agreement with Wuhuan Engineering Co. Ltd. to conduct a techno-economic study to establish a fertilizer factory that uses natural gas as an input. The feasibility study was expected to be finalized within five months, according to the document. ‎Feasibility studies for the construction of nearly 600 kilometers of roads linking Jigjiga with Gode via Deghabour and Kebridhar are underway, according to the same document. The government is also looking to upgrade the road from Ginir to Gode using financing from the government of South Korea, it reads. ‎According to Ministry data, nine months ago it was also preparing legal frameworks to govern and regulate the nascent natural gas industry, with its experts working on a policy, proclamation, regulation, and directives. ‎The 2025 Energy Outlook underscores a sobering reality: while the dream of exporting gas to global markets is officially shelved, the government is doubling down on using its reserves to address domestic fuel, electricity, and food security gaps. ‎”The government of Ethiopia is in the process of implementing a strategy for developing, processing, and using the country’s natural resources to offset imports,” it reads. “The policy will focus on natural gas exploration and prioritize development of the sector to open the area for companies and to encourage investments.”

‎Crypto Boom Makes for Power Burden in Ethiopia

Data centers set to consume 30 percent of grid electricity in 2025 The booming cryptocurrency mining and data center industry in Ethiopia is forecast to consume nearly a third of the country’s electricity supply in 2025, raising concerns about energy allocation in a country where half the population still lacks reliable access to power. ‎Electricity demand from crypto-related data centers will exceed eight terawatt hours (TWh) this year—equivalent to about 30 percent of total national demand, according to the newly released Ethiopian Energy Outlook 2025. ‎The report, prepared by the country’s state-owned utility firms and the Petroleum and Energy Authority, questions whether such usage is appropriate, given widespread reliance on diesel generators in agriculture and industry, and with persistent blackouts for millions of households. ‎”Since the demand and supply balance is tight, it remains an open question whether the power could be better used for export, general electrification or other productive uses, like pumping of water in the water and agriculture sector, where diesel generators are used to a wide extent,” it reads. ‎While crypto operations are seen as a source of foreign exchange and digital infrastructure, their massive energy footprint has sparked debate over equity and efficiency. Despite ambitious targets and large-scale infrastructure programs, progress in electrifying Ethiopia has been slower than expected. An estimated 2.2 million households were connected to the grid in the five years leading up to 2024 under the second iteration of the National Electrification Program (NEP), but nearly 50 percent of the population still lacks access to reliable electricity, and only 22 percent has legal (metered) grid connections, according to the report. ‎It warns that the slow expansion of electricity access hinders economic development and reduces the potential benefits of other energy sector reforms. ‎”Addressing this issue requires increased infrastructure investment and innovative solutions to extend energy access to underserved areas. The respective tariff and exchange rate reforms are expected to alleviate the lack of materials for electrification, one of the main barriers to its progress,” it reads. While the current distribution grid covers only 25 percent of Ethiopia’s land area, 68 percent of the population resides less than five kilometers from the grid. “This highlights the potential to triple the number of household connections within the footprint of the existing grid. Implementing cost-reflective tariffs will provide EEU with resources for new connections, making widespread electrification more feasible,” reads the outlook. ‎It stressed that relatively expensive mini grids are expected to play a major role in the updated electrification plan. ‎Still, given the tight balance between electricity supply and demand, it remains an open question whether the power could be better used for general electrification or productive sectors. ‎Addis Ababa enjoys an electrification rate of nearly 93 percent, while regions such as Afar and Somali remain below 12 percent, reveals the outlook. The report also reveals intentions to increase electricity tariffs by up to 400 percent by 2028 under a new cost-reflective pricing regime under NEP 3.0 (National Electrification Program). ‎The sectoral institutions who authored the report noted the new plan is crucial to revising targets, setting more realistic goals, and incorporating new technologies and funding mechanisms to accelerate progress. ‎Analysts expect the hike to diminish the appeal of crypto mining, which currently benefits from below-market power rates and tax regulation. ‎”Rising tariffs are likely to reduce the incentive to invest in crypto mining in Ethiopia,” the report notes. ‎The industry’s expansion coincides with daily power cuts that affect businesses and hospitals alike, averaging 39 interruptions per month with an overall duration of 21 hours or three percent for large users. ‎While crypto mining offers foreign direct investment opportunities and taps into Ethiopia’s 98 percent renewable energy mix, critics argue that its expansion during a national electrification crisis could jeopardize broader development goals. As the Outlook notes, 15 million households still await their first grid connection. ‎The country’s embrace of Bitcoin mining marks a dramatic shift from its 2022 position, when the National Bank of Ethiopia (NBE) banned cryptocurrency trading. By 2023, the government began quietly registering mining firms through its cyber security agency INSA, signaling a calculated pivot toward monetizing digital infrastructure. ‎Yet this policy shift now collides with fundamental questions of energy justice. In a country where clinics operate without reliable electricity and farmers depend on diesel pumps for irrigation, allocating scarce power to energy-intensive mining operations may deepen social and regional inequalities, critics worry. ‎The report concludes with calls for a reassessment of energy allocation, urging policymakers to consider trade-offs between digital infrastructure growth and essential services.

Nigerian Banking Tech Firm Debuts in Untapped Ethiopian Market

A Nigerian financial technology provider hopes to expand its business in Ethiopia following the successful execution of a digitalization contract with one of the scores of microfinance institutions operating in the country. Qore Technologies was recently hired to digitalize the paper-based system formerly used by the staff of Akufada Microfinance Institution, which is based in Debre Birhan. The contract marked Qore’s first foray into what Vice President for International Expansion Martin Muchine describes as a lucrative market. Muchine notes that Ethiopia’s financial technology industry is still in its infancy and expressed hope the recent approval of updated regulations for foreign financial firms will help businesses like Qore gain a stronger foothold in the market. Earlier this week, the National Bank of Ethiopia (NBE) issued a directive that officially opens Ethiopia’s banking industry to foreign investment. “Ethiopia is a great market,” Muchine said. “Look at your numbers—this is essentially now a level-two economy with 130 million people. These are people who need foundational technologies—what we call ‘plumbing’ at the core. We believe we can solve some of these foundational challenges. It’s a market that presents reasonable challenges, but also significant rewards when those challenges are addressed. We aim to bring the same solutions we’ve provided in other African markets to Ethiopia.” Muchine added that more than 10 Ethiopian banking and financial institutions have expressed interest in working with the company, which specializes in technologies that enable fast, efficient, and customer-centric services. Headquartered in Lagos, Nigeria, Qore has previously delivered banking technology projects in Kenya, Ghana, Gambia, the Democratic Republic of Congo, Tanzania, and Senegal. The services offered include the modernization of digital banking systems, rapid card issuance, merchant services, agent banking, and the establishment of comprehensive digital banking operations, including third-party system integrations. Abraham Wadajo, CEO of Akufada Microfinance Institution, praised the company’s work. The system installed by Qore allows Akufada’s network of more than 40 branches to deliver integrated services, improving accessibility for its customers. Akufada, one of 52 microfinance institutions licensed by the NBE, was established in 2022.

Ethiopian Startup Better Auth Raises $5M to Democratize Secure Authentication

Ethiopian Startup Better Auth Raises $5M to Democratize Secure Authentication Beyond the Valley: Better Auth Raises $5M to Democratize Authentication for the World June 25, 2025 Just three months after Addis Insight reported on their remarkable journey from Ethiopia to Silicon Valley, the story of Better Auth has taken yet another extraordinary turn. The startup—founded by Bereket Engida and Kinfe Michael Tariku—has officially closed a $5 million seed round, backed by some of the biggest names in global tech investing: Peak XV Partners (formerly Sequoia Capital India & SEA), Y Combinator, Chapter One, P1 Ventures, and several prominent angel investors. This new funding is a resounding endorsement of the team’s ambitious mission: to make secure, developer-owned authentication accessible to everyone, everywhere. A $5M Bet on Open Source Africa For a startup that started in Addis Ababa with little more than a framework and a dream, this milestone is more than just capital—it’s validation. “This funding fuels the next phase of Better Auth,” reads the company’s announcement. But beneath the modest phrasing lies a powerful vision: to shift authentication infrastructure from being a centralized, expensive, and often opaque process into a transparent, modular, and developer-first ecosystem. From day one, Bereket and Kinfe believed that developers should be able to own their authentication systems—not be locked into expensive platforms. Their open-source authentication tool, purpose-built for TypeScript, makes it dramatically easier to build secure login, verification, and session management workflows without reinventing the wheel. Now, with financial backing from some of the most respected VCs in the world, Better Auth is expanding both its team and infrastructure to serve a growing developer base. From Framework to Full Stack Security As the company grows, so too does its ambition. While their original open-source project tackled the framework, the new funding will support infrastructure-level features that many developers struggle to implement independently. The roadmap includes: A unified dashboard for managing users and analytics Enterprise-grade protection against bots, abuse, and fraud Robust email and SMS authentication services Fast, globally distributed session storage systems And more tools focused on developer experience and data privacy This evolution signals that Better Auth is no longer just a project—it’s fast becoming a comprehensive platform. Still Ethiopian at Heart Despite the international scale of their vision, the founders remain deeply rooted in their origins. For Bereket, who previously created Gebeya Search and Loglib, building from Ethiopia has always been a source of strength, not limitation. “We wanted to prove that you can build global infrastructure out of Africa,” Bereket said in a previous interview with Addis Insight. And now, with a globally distributed team and international users, they are living proof that local innovation can scale globally. The startup’s success also brings new visibility to Ethiopia’s burgeoning tech ecosystem—where talent often outpaces infrastructure. Better Auth’s rise shows what’s possible when resourcefulness meets opportunity. Y Combinator Was Just the Beginning Better Auth’s acceptance into Y Combinator’s Spring 2025 Cohort was already a Cinderella story. The founders battled visa delays, bureaucratic obstacles, and geographic bias—yet still made it to Demo Day, where they pitched in front of top Silicon Valley investors. The experience unlocked key relationships and technical mentorship. But now, the $5M round demonstrates that investors don’t just believe in their pitch—they believe in their long-term potential. “It’s still early days,” the founders note. “There’s so much more to build.” Redefining What Success Looks Like In an ecosystem where African startups often chase user acquisition or mobile payments, Better Auth stands apart. It is an infrastructure company, targeting a global developer market, and doing so with transparency, openness, and technical depth. At a time when cybersecurity threats are rising, and when developers worldwide are being asked to “do more with less,” Better Auth offers an essential solution. Not flashy. Not hype-driven. Just a smart, secure foundation. What Comes Next With this new funding, Better Auth is doubling down on hiring, product development, and community building. Developers can now join the waitlist for early access to the next-generation infrastructure. The goal: push the boundaries of what’s possible, not just for Silicon Valley—but for anyone, anywhere, trying to build software with trust at its core. As Bereket and Kinfe put it: “We’re obsessed with making high-quality authentication the obvious choice—for everyone.” And with $5 million in fresh capital, global investors behind them, and a mission rooted in freedom, trust, and developer empowerment, Better Auth might just become Ethiopia’s first unicorn. Follow the journey at better-auth.com or join the waitlist here.