Lemi National Cement Factory Supplies Over 7 Million Quintals of Cement to Market

Lemi National Cement Factory Supplies Over 7 Million Quintals of Cement to Market Lemi National Cement Factory has supplied more than 7 million quintals of cement to the Ethiopian market since it began operations, the company has announced. The factory is working closely with key stakeholders in the construction sector to expand market accessibility and promote efficient industry practices. By improving distribution and addressing supply shortages, Lemi National Cement has played a leading role in stabilizing cement prices and ensuring product availability. Currently, the factory produces 100,000 quintals of cement daily, covering over 33% of Ethiopia’s total cement supply. This output has significantly eased cement shortages in the country, providing a much-needed boost to the construction industry. In the 2017 Ethiopian fiscal year, Lemi National Cement achieved key production milestones and reaffirmed its commitment to offering high-quality, locally-produced cement that meets international standards. Moreover, the newly operational factory has created over 1,000 job opportunities, including both permanent and temporary positions. The company plans to further expand cement distribution nationwide in collaboration with industry stakeholders. Lemi National Cement is set to continue playing a crucial role in Ethiopia’s construction sector, ensuring steady supply, stabilizing prices, and driving economic growth.

Ethiopia to Increase Electricity Tariffs Starting April

Ethiopia to Increase Electricity Tariffs Starting April Ethiopian Electric Service has announced that from April to June, electricity tariffs will increase for both consumption and service fees. According to the statement, starting in April, residential customers consuming up to 0.50 kWh will see their tariff increase to 0.60 cents per kWh. Additionally, service fees will also rise, with postpaid customers paying 10 ETB and 95 cents, while prepaid customers will pay 4 ETB and 18 cents. For residential customers: Those consuming between 51 and 100 kWh will now pay 1 ETB and 49 cents per kWh. Those using between 101 and 200 kWh will pay 2 ETB and 67 cents. Customers consuming between 201 and 300 kWh will be charged 3 ETB and 84 cents per kWh. Service fees will also vary based on consumption. The maximum charge for postpaid users will be 45 ETB and 80 cents, while prepaid users will pay 15 ETB and 97 cents. Bahiru Olijira, Executive Director of Energy Supply and Distribution Regulation at the Ministry of Petroleum and Energy, confirmed that these tariff adjustments will take place every three months, beginning in April. The adjustments will apply to various sectors, including residential, commercial, small and medium industries, and street lighting. Previously, from January to March, residential customers consuming up to 0.50 kWh were charged 0.52 cents per kWh, while postpaid service fees were 10 ETB and 71 cents, and prepaid service fees were 4 ETB and 1 cent. For commercial, small and medium industries, and street lighting, payments will continue based on assigned usage brackets. The Ethiopian Electric Service aims to gradually implement these changes every three months to avoid sudden financial burdens on the public, according to Melaku Taye, the institution’s Communication Executive. The cost-reflective tariff, which accounts for increased power generation costs, will bring the price per kWh to 6.01 ETB after four years. 1 COMMENT Daniel woldemichael March 10, 2025 At 6:57 am “Dear Leaders of Ethiopia As you are aware, our people have endured immense hardships over the past six years due to both natural and man-made challenges. The outbreak of COVID-19, ongoing conflicts in the north and west, and the displacement of millions have placed a heavy burden on families struggling to rebuild their lives. With the upcoming tariff increase by the Ethiopia Electric and Power Authority in April, we are deeply concerned about the affordability of electricity for our people. Many are already facing economic hardships and cannot bear additional financial strain. At the same time, we also observe significant power wastage in the city, which raises questions about efficiency and responsible resource management. Given these circumstances, we kindly ask for a fair and balanced approach. Would it not be more just to prioritize reducing wastage and improving efficiency before increasing tariffs? Our people deserve a solution that considers their struggles while ensuring sustainable energy management. We appreciate your leadership and hope for a decision that reflects compassion and fairness for all.” “Dear Leaders of Ethiopia As you are aware, our people have endured immense hardships over the past six years due to both natural and man-made challenges. The outbreak of COVID-19, ongoing conflicts in the north and west, and the displacement of millions have placed a heavy burden on families struggling to rebuild their lives. With the upcoming tariff increase by the Ethiopia Electric and Power Authority in April, we are deeply concerned about the affordability of electricity for our people. Many are already facing economic hardships and cannot bear additional financial strain. At the same time, we also observe significant power wastage in the city, which raises questions about efficiency and responsible resource management. Given these circumstances, we kindly ask for a fair and balanced approach. Would it not be more just to prioritize reducing wastage and improving efficiency before increasing tariffs? Our people deserve a solution that considers their struggles while ensuring sustainable energy management. We appreciate your leadership and hope for a decision that reflects compassion and fairness for all.” Comments are closed.

Ethiopia Develops Capacity to Export Drones to International Markets – Prime Minister Abiy (Dr.)

Ethiopia Develops Capacity to Export Drones to International Markets – Prime Minister Abiy (Dr.) Addis Ababa, February 29, 2025 (FMC) – Ethiopia has built the capacity not only to manufacture and use drones but also to export them to international markets, Prime Minister Abiy Ahmed (Dr.) has announced. The Prime Minister inaugurated Sky Wing Industry, a company engaged in the production of unmanned aerial vehicles (drones) for both civilian and military applications. During the inauguration, he highlighted that the establishment of this industry is part of Ethiopia’s broader efforts to enhance its technological self-sufficiency, particularly in security and defense sectors. The drones manufactured by the company are expected to strengthen Ethiopia’s sovereignty and defense capabilities significantly. According to the announcement, these drones are designed to operate efficiently at high altitudes and come equipped with counter-drone systems to neutralize potential aerial threats. Moreover, the drones utilize advanced artificial intelligence (AI) technologies to enhance their operational effectiveness. They are capable of intelligence gathering, surveillance, defense, and offensive operations, making them versatile tools for various strategic purposes. The Prime Minister further emphasized that Ethiopia now possesses the necessary infrastructure to export these drones to international markets. Additionally, he encouraged further research and collaboration among institutions working in this sector to strengthen Ethiopia’s position in drone technology and innovation. 2 COMMENTS King David March 8, 2025 At 9:15 pm Great News. Black people have to wake up! We need to master AI. Do you think Black people will be safe if White SUPREMACIST Musk and Trump gets AGI. Ethiopia try to get Nukes. The Black Race need Nukes . Great News. Black people have to wake up! We need to master AI. Do you think Black people will be safe if White SUPREMACIST Musk and Trump gets AGI. Ethiopia try to get Nukes. The Black Race need Nukes . Ethiopia begins manufacturing its own drones for defense and trade - The Radical Leap Group March 9, 2025 At 8:31 pm […] Also, the locally manufactured drones use powerful artificial intelligence (AI) technology to improve their operating efficiency, as seen on AddisInsight. […] […] Also, the locally manufactured drones use powerful artificial intelligence (AI) technology to improve their operating efficiency, as seen on AddisInsight. […] Comments are closed.

NBE’s Forex Auctions: Is Ethiopia’s Market-Based Exchange Failing?

NBE’s Forex Auctions: Is Ethiopia’s Market-Based Exchange Failing? As banks compete for scarce dollars, concerns grow over the transparency and effectiveness of Ethiopia’s forex auctions. Ethiopia’s commercial banks are facing a severe liquidity crisis, worsened by recent policy changes and financial sector inefficiencies. The National Bank of Ethiopia’s (NBE) strict credit cap and high demand for cash have left banks struggling to meet withdrawals and sustain lending. The shift to a market-based foreign exchange system has further drained liquidity, making it harder for banks to issue loans and increasing financial distress. Amid this crisis, NBE’s recent forex auction has sparked concerns among experts, particularly about its timing and lack of transparency. With limited cash available, banks are being forced to prioritize forex bidding over lending, potentially worsening the credit shortage. “Cash is disappearing from the banking system as businesses struggle to transact. Some banks are even buying local currency, birr, at an interest rate,” said Getachew, an economist and public policy expert. “The first auction after floating the birr was necessary to show stability, but this one raised serious questions.” He added that while forex auctions help when the birr depreciates or forex is scarce, NBE’s process for deciding auction timing and amounts remains unclear. “There is no data to verify if the allocated forex matches actual market demand,” he said, questioning whether the auctions address shortages or create more uncertainty. Lack of Transparency Economist and social media commentator Wassihun Belay echoed these concerns, criticizing the lack of transparency. “We need data for investment decisions and to help businesses choose banks wisely,” he said. “Auctions should be announced earlier so banks can prepare, and NBE must ensure smaller banks aren’t excluded.” He also urged NBE to publicly disclose future auction dates to reduce uncertainty. “Banks’ forex rates should be monitored since some add extra commissions beyond the official rate,” he added. “NBE’s decisions should not be unpredictable.” Wassihun further claimed that although NBE stated 27 banks received forex, only five banks—those with the highest bids—actually secured it. Impact on the Market Getachew acknowledged that despite its flaws, the auction provides a reference exchange rate, helps banks manage forex reserves, and partially meets demand. However, he warned that without oversight, the forex could flow into the black market. Following the auction, the parallel market saw sharp fluctuations, with the dollar trading at ETB 145–150, widening the gap between the official and black market rates. Getachew argued that Ethiopia’s foreign exchange market is not truly market-based. “A real market-based forex system responds to global economic forces, but Ethiopia’s rates are still controlled by state-owned banks like the Commercial Bank of Ethiopia (CBE) and the Development Bank of Ethiopia (DBE),” he said. He emphasized that transparency is critical. “Auction details—who bid and how much—must be public,” he argued. “This helps decision-makers plan and allows analysts to track market trends.” Without this, he warned, businesses and investors will struggle to navigate Ethiopia’s forex system. Auction Results and Inflation Risks The Reporter stated that the latest auction had bids ranging from ETB 130 to ETB 141 per USD. One bank secured just USD 200,000 at ETB 141 per USD, while the average rate was ETB 135.6185—ETB 10 above the official exchange rate. NBE offered a total of USD 60 million. A financial expert told The Reporter that many banks rely on these auctions as their only source of forex, especially for fuel imports. Smaller banks, in particular, prefer auctions over buying from larger banks, which charge high fees. An economist warned that uncertainty about future auctions is driving banks to buy as much forex as possible, potentially increasing inflation. “The new rate of nearly ETB 136 per USD could push up prices. Exporters might hold onto goods, expecting the birr to weaken further and fetch higher profits later.” Conclusion Ethiopia’s forex auction system is struggling to function as a true market-based exchange. Without better transparency and planning, it risks worsening liquidity shortages, driving up inflation, and fueling speculation. Experts agree: for the system to work, NBE must improve oversight, ensure fair participation, and make auction details public.

Ethiopian Airlines Celebrates International Women’s Day with All-Female Flight Crew in Namibia

Ethiopian Airlines Celebrates International Women’s Day with All-Female Flight Crew in Namibia Ethiopian Airlines marked International Women’s Day with a special flight operated entirely by an all-female crew, landing at Hosea Kutako International Airport in Namibia. The First Lady of Namibia, Susette Mbumba, welcomed the historic flight, highlighting the role of women in aviation and beyond. Addressing the gathering, the First Lady praised the initiative, stating, “When women rise, the world rises with them.” She described the flight as a symbol of progress and emphasized the need for continued efforts to achieve gender equality. A Tradition of Female Empowerment in Aviation Ethiopian Airlines, Africa’s largest and most successful carrier, has been at the forefront of promoting gender equality in the aviation industry. The airline first introduced all-female crew flights in 2015, making history with a flight from Addis Ababa to Bangkok. Since then, it has conducted similar flights to cities around the world, including Lagos, Oslo, Washington, and Buenos Aires. These flights feature female professionals in all key operational roles, including pilots, cabin crew, air traffic controllers, ground operations staff, maintenance technicians, and flight dispatchers. This initiative aims to highlight the capabilities of women in the aviation industry and inspire the next generation to pursue careers in fields traditionally dominated by men. Namibia’s Commitment to Gender Equality Namibia has made significant strides toward gender equality, ranking among the top African countries in closing the gender gap, according to the World Economic Forum’s Global Gender Gap Report. The country has implemented policies to increase women’s participation in leadership, business, and education. By welcoming Ethiopian Airlines’ all-female flight, Namibia reaffirmed its support for women’s empowerment, particularly in male-dominated industries like aviation. The event served as a powerful reminder of the progress being made and the work that remains in achieving full gender parity. Ethiopian Airlines’ Leadership in Gender Inclusion Ethiopian Airlines’ CEO, Mesfin Tasew, has emphasized the company’s dedication to diversity and inclusion, noting that women now make up a growing percentage of the airline’s workforce, including pilots, engineers, and executives. The airline has established various training programs and scholarships aimed at increasing the representation of women in aviation. Captain Amsale Gualu, one of Ethiopia’s first female pilots, has been a key figure in inspiring young women to join the industry. As Ethiopian Airlines continues to lead in gender inclusion, initiatives like the all-female flight crew serve as both a celebration and a call to action. By fostering greater opportunities for women in aviation, the airline is not only strengthening its workforce but also contributing to a more inclusive and equitable global industry. The successful landing in Namibia stands as a testament to the airline’s ongoing commitment to empowering women and breaking barriers in aviation. 1 COMMENT Gregor Hoess March 9, 2025 At 11:56 pm It is nice to see such a friendly African people developping with great success. I can highly recommend Ethiopian Airlines: ecellent pilots, outstanding boardservice! I am looking fw to the next flight with them. It is nice to see such a friendly African people developping with great success. I can highly recommend Ethiopian Airlines: ecellent pilots, outstanding boardservice! I am looking fw to the next flight with them. Comments are closed.

Addis International Convention Center: A 28 Billion ETB Landmark for Ethiopia’s MICE Industry

Addis International Convention Center: A 28 Billion ETB Landmark for Ethiopia’s MICE Industry The Addis International Convention Center (AICC), a state-of-the-art facility in Addis Ababa, Ethiopia, has been completed with an investment surpassing 28 billion ETB. This mega project aims to position Ethiopia as a premier destination for global conferences, trade fairs, and high-profile events. According to AICC Chief Executive Officer Sisay Gemechu, more than 22 billion ETB of the total investment came from shareholders’ capital. The convention center is expected to drive economic growth by boosting tourism, attracting international business, and creating employment opportunities in Ethiopia’s event management, hospitality, and service industries. A Hub for International Events and Business The AICC is designed to meet international standards for event hosting, offering a highly modernized infrastructure that can accommodate a diverse range of gatherings, from diplomatic summits and corporate meetings to cultural exhibitions and trade fairs. The facility is one of the largest of its kind in East Africa and provides comprehensive services to event organizers and attendees. World-Class Facilities & Features Two Grand Conference Halls: Each can host between 3,000 to 4,000 attendees, making them ideal for large-scale summits, corporate events, and government conferences. Eight Additional Meeting Rooms: Designed to accommodate a variety of smaller discussions, workshops, and breakout sessions, allowing for up to 10,000 participants in total. Luxury Hotels & Accommodation: The convention center is surrounded by six buildings converted into high-end hotels, providing over 1,000 rooms for international and local guests. Expansive Exhibition Grounds: A dedicated outdoor space that can host up to 50,000 visitors, tailored for trade fairs, cultural exhibitions, and business expos. State-of-the-Art Business and Retail Spaces: With 50 commercial outlets, the facility offers office spaces, banks, restaurants, and high-end retail shops, ensuring convenience for attendees. Ample Parking Space: A 2,000-vehicle capacity parking lot, designed to accommodate the high volume of traffic expected for major events. Strategic Location and Economic Impact The AICC is strategically located next to Lemi Park, Addis Ababa’s second-largest public square after Meskel Square. This positioning enhances its accessibility and integrates it into the city’s broader economic and social infrastructure. The development of the AICC aligns with Ethiopia’s economic vision to become a leading player in Africa’s Meetings, Incentives, Conferences, and Exhibitions (MICE) industry. With modern infrastructure, Ethiopia can compete with other African nations in attracting international summits, corporate events, and cultural exchanges. Immediate Bookings & Future Prospects Demand for the Addis International Convention Center is already high. Within the next three to four months, 10 major institutions have secured reservations for international conferences, diplomatic meetings, and corporate events. The center is expected to serve as a key hub for business, trade, and cultural diplomacy, solidifying Ethiopia’s role as an attractive destination for international collaborations. As the AICC begins operations, it is poised to transform Ethiopia’s hospitality, tourism, and business sectors, making Addis Ababa a global hub for high-profile gatherings and a gateway for international engagement in East Africa.

Ethiopia’s $30M Arms Export Claim: A Rising Power or an Overstated Achievement?

Ethiopia’s $30M Arms Export Claim: A Rising Power or an Overstated Achievement? Addis Ababa, Ethiopia – Ethiopia has officially joined the ranks of Africa’s top arms exporters, with Prime Minister Abiy Ahmed announcing that the country has already earned at least $30 million from weapons sales. This declaration places Ethiopia behind South Africa ($48 million) and Egypt ($41 million) while surpassing Morocco ($21 million) and Nigeria ($3 million) in reported arms exports. During a visit to the Homicho Arms Manufacturing Industry near Ambo town in the Oromia region, Abiy emphasized that the country has successfully established its own light to heavy weapons and ammunition production capabilities. “Ethiopia is a big country. It is necessary to ensure that it can protect itself and pass on its wealth to its children,” the Prime Minister stated. The factory, which started taking shape in 2015 after Ethiopia was forced to buy ammunition in 2014, has now become a cornerstone of the country’s self-reliance strategy. “We had an assessment that if Ethiopia does not build such strategic capabilities, anyone can come and attack it,” Abiy explained. Ethiopia’s Place in Africa’s Arms Market If Ethiopia’s figures hold, the country would be ranked third in Africa in terms of arms export revenue: While South Africa remains the dominant arms exporter on the continent, Ethiopia’s entry into the top three is significant. South Africa has been exporting military hardware for decades, with a well-established arms industry that supplies over 30 African nations. Egypt, similarly, has a state-backed military-industrial complex that has developed small arms, armored vehicles, and munitions for years. Morocco and Nigeria have been increasing their local production, but their earnings remain much lower. Nigeria’s ProForce, for example, has recently signed its first European arms export deal with Belarus, but the country still primarily imports weapons rather than exporting them. Questioning Ethiopia’s Claims Despite the bold announcement, questions remain about Ethiopia’s actual role in the global arms trade. Where Are the Buyers? – Unlike South Africa and Egypt, which have well-documented export partners, Ethiopia has not disclosed which countries are purchasing its weapons. The absence of transparency raises questions about the scale and legitimacy of the sales. What Kind of Arms? – Ethiopia’s domestic production capabilities are still relatively young. While the country has successfully developed ammunition and small arms, it is unclear whether it exports advanced weaponry such as drones, armored vehicles, or missile systems—categories that typically drive higher revenue. Sustainability of Production – Given Ethiopia’s recent civil conflict, has the country truly built an arms industry capable of sustained exports? Some analysts argue that much of its production has been for domestic use rather than export, and it is uncertain whether Ethiopia can maintain or increase its reported earnings. A Rising Player or a Temporary Claim? Ethiopia’s announcement signals a new ambition in military-industrial development, but without clear buyers and more transparent reporting, skepticism remains about the $30 million claim. For now, Ethiopia is positioning itself as a rising force in African arms exports, but it remains to be seen whether the country can sustain its position or if this claim is an overstatement of its growing but still unproven arms industry.

Ethiopia to Purchase Six Cargo Ships to Enhance Trade and Investment

Ethiopia to Purchase Six Cargo Ships to Enhance Trade and Investment Addis Ababa, February 27, 2017– Ethiopia is set to strengthen its maritime transport capacity with the acquisition of six new cargo ships, the Ethiopian Maritime Transport and Logistics (EMTL) has announced. The move is part of the country’s broader strategy to expand its logistics infrastructure and enhance trade efficiency. According to EMTL, two of the six ships have already been purchased and are currently being prepared for commissioning. These vessels are Ultramax dry bulk carriers, each with a carrying capacity of 62,000 tons, and are expected to significantly improve the country’s ability to transport bulk goods such as grain, minerals, and industrial raw materials. Additionally, an ETU container ship with a capacity of 3,000 to 4,000 containers is included in the new fleet. This container ship will enhance Ethiopia’s ability to manage imports and exports, particularly for manufactured goods and agricultural products, which are key drivers of the nation’s economy. The acquisition aligns with the government’s ongoing efforts to modernize Ethiopia’s logistics and transportation sector, a crucial element in improving international trade competitiveness. A Boost for Ethiopia’s Maritime Transport Sector Ethiopia, a landlocked country, relies heavily on maritime trade through the Port of Djibouti, which serves as its primary gateway for international shipments. Strengthening the national fleet is expected to reduce dependency on foreign shipping lines, lower transportation costs, and improve the efficiency of import and export logistics. The additional ships will also enhance the country’s ability to transport essential commodities and facilitate faster delivery of goods. The remaining four ships are expected to be purchased over the coming years as part of the government’s long-term maritime expansion strategy. The acquisition of new vessels underscores Ethiopia’s commitment to improving its maritime logistics capabilities, supporting industrialization, and fostering economic growth. Current Fleet and Future Outlook At present, Ethiopia operates 10 cargo ships, including the Abay II, which has a carrying capacity of 63,000 tons. The rest of the fleet consists of vessels with capacities ranging between 26,000 and 27,000 tons. With the addition of the newly acquired ships, Ethiopia’s shipping fleet will be significantly strengthened, allowing for increased efficiency in handling cargo and boosting the country’s position in regional trade. The expansion of Ethiopia’s maritime transport fleet comes at a time when the government is prioritizing infrastructure development to support its ambitious economic growth agenda. Investments in the shipping industry are expected to contribute to reducing logistical bottlenecks, attracting foreign investment, and supporting the country’s export-driven industrialization efforts. By enhancing its shipping capacity, Ethiopia aims to establish a more self-reliant and cost-effective logistics system, ultimately improving its global trade position and economic resilience.

NBE’s Draft Directive Could Require Insurance Companies to Hold 40% More Capital

NBE’s Draft Directive Could Require Insurance Companies to Hold 40% More Capital Ethiopia’s financial landscape is set to undergo significant changes as the National Bank of Ethiopia (NBE) proposes a new directive aimed at strengthening the capital adequacy framework for the country’s insurance industry. The draft directive, which could affects both local and reinsurance companies, is designed to bolster the financial resilience of these institutions amid growing market uncertainties. The draft directive has introduced stricter capital requirements for all insurance companies and a new framework for assessing capital adequacy ratios (CAR). The policy prescribes varying minimum paid-up capital requirements based on the type of business. Non-life insurance companies must maintain a minimum of Birr 400 million, while reinsurance companies are required to meet a threshold of Birr 500 million. Life insurance companies, on the other hand, must meet a minimum capital requirement of Birr 100 million. The directive further stipulates that insurance companies must maintain a solvency capital requirement (SCR) representing a CAR of 150% and a minimum capital requirement (MCR) of 100%. This means that companies will need to ensure their capital resources consistently exceed the set thresholds to protect policyholders and safeguard their financial health. Licensing and Supervision of Insurance Business This new draft directive, Insurance Risk-Based Capital Directive No. SIB/–/2025, underscores the National Bank’s commitment to enhancing the transparency and stability of the Ethiopian insurance sector. It establishes clear guidelines for the licensing and supervision of insurance businesses, reinforcing the importance of financial soundness and proper risk management. The directive emphasizes that it is essential for the NBE to receive relevant, reliable, and timely financial and non-financial information from insurance companies to assess their financial stability, managerial effectiveness, and overall performance on an ongoing basis. The NBE further stresses that ensuring appropriate capital levels is critical not only for the financial health of insurance companies but also for the protection of policyholders. As stipulated by the directive, it is the ultimate responsibility of the Board and Senior Management of each insurance company to ensure that their institutions maintain a capital adequacy level that is commensurate with their risk profiles. The policy holds companies accountable for their own financial strength and stability, requiring proactive measures to meet these heightened capital standards. A Two-Tier Capital Structure In a move designed to enhance the sector’s ability to withstand market fluctuations and insurance risks, the directive introduces a two-tier system for capital. The Tier 1 capital represents the highest quality, most loss-absorbent, and permanent form of capital, while Tier 2 capital includes components like fair value reserves and insurance finance reserves. The NBE has laid out clear limits on how much Tier 2 capital can be used to meet both the Minimum Capital and Solvency Capital Requirements. The focus on robust capital allocation is part of a wider effort to cushion insurance companies against a range of risks, including insurance, market, credit, and operational risks. To do so, the policy requires companies to maintain separate capital reserves for various risks, such as fluctuations in premium reserves, claims reserves, and catastrophic risks. The risk-based capital requirement will reflect the nature of these risks, with insurance companies needing to hold capital proportional to the exposure in each area. Higher Standards for Risk Management The new directive also places a stronger emphasis on managing operational, credit, and market risks. For instance, insurance companies will now need to meet specific capital charges for equity, property, and foreign currency risks. This new approach aims to mitigate potential losses resulting from market volatility and counterparty defaults. Additionally, the policy introduces an operational risk capital requirement, reflecting the growing importance of safeguarding against internal disruptions, such as system failures and management errors. Enforcement and Compliance The NBE has signaled a zero-tolerance stance for non-compliance. Insurance companies that fail to meet the new capital requirements could face a range of regulatory actions, from mandatory recovery plans to a complete revocation of their operating license. The NBE will regularly assess the financial health of insurance companies, requiring them to submit their Capital Adequacy Ratios within set deadlines to ensure ongoing compliance. A Bold Step Towards Financial Stability The NBE’s directive is a bold and necessary step toward reinforcing the integrity of Ethiopia’s financial sector. By establishing clear capital adequacy requirements, the policy aims to protect both insurers and their clients from financial volatility, helping the sector stay resilient in the face of both domestic and global challenges. The initiative comes at a critical time as the country continues to focus on strengthening its economic framework and ensuring the sustainable growth of its financial institutions.