Ethiopia Plans Four New Expressways to Boost Connectivity from Addis Ababa

January 28, 2017 (Ahadu Radio) – Ethiopia is setting the stage for a transformative infrastructure upgrade with the planned construction of four new expressways extending from Addis Ababa. The Ethiopian Roads Administration has announced that a comprehensive study is currently underway to determine the feasibility and design of these ambitious road projects. The proposed expressways will connect Addis Ababa to four major cities: Dessie, Jimma, Debre Markos, and Nekemte. With an average length of 300 kilometers each, these roads will significantly enhance connectivity and reduce travel time across key trade and population centers. The Ethiopian Roads Administration has highlighted that the construction will be challenging due to the mountainous terrain along these routes, necessitating extensive excavation and engineering solutions to ensure quality and durability. The expressways will be constructed in phases, with specific sections prioritized based on economic impact, accessibility, and engineering requirements. Feasibility studies, basic design frameworks, and preparatory assessments are currently being finalized to ensure the projects’ success. One of the most notable aspects of this initiative is the financing model. The government has opted for a Public-Private Partnership (PPP) approach to fund the construction. This strategy is expected to attract private investors while ensuring sustainable infrastructure development without placing excessive strain on public finances. According to the Ethiopian Roads Administration, the Addis-Jimma and Addis-Debre Markos expressways have already been submitted to the Ministry of Finance’s Public-Private Partnership Board for evaluation and approval. The remaining two projects—Addis-Dessie and Addis-Nekemte—are expected to follow suit in the near future. If realized, these expressways will not only modernize Ethiopia’s road network but also stimulate economic growth by facilitating trade, tourism, and regional development. The enhanced road infrastructure is expected to support businesses, improve access to essential services, and contribute to the country’s long-term economic aspirations.

Ethiopian Capital Market Authority Issues Compliance Directive for Public Companies

Addis Ababa, February 4, 2025 — The Ethiopian Capital Market Authority (ECMA) has issued a public notice requiring all publicly held companies in Ethiopia to submit detailed information about their existing shares. This move follows the enactment of the Public Offer and Trading of Securities Directive No. 1030/2024, which took effect on November 13, 2024. The new directive is aimed at enhancing investor protection, improving market transparency, and ensuring the orderly operation of Ethiopia’s emerging capital market. The directive applies to all companies with more than fifty shareholders, regardless of sector or industry, and mandates them to provide relevant data by March 10, 2025. Key Submission Requirements Publicly held companies must submit the following information to the ECMA: The submission process requires companies to sign an attestation of accuracy and completeness. Hard copies must be delivered to the ECMA headquarters at Minaye Building, 17th Floor, Kirkos, Addis Ababa, while soft copies can be sent to designated email addresses. Compliance and Regulatory Implications Failure to meet the March 10, 2025 deadline will result in shares being considered as issued post-November 13, 2024. Moreover, companies must register their existing securities within a year from the directive’s enactment. Any ongoing offers initiated before November 13 must also be registered within this period. The ECMA has emphasized that all future security offerings must undergo proper registration before any sales or promotional activities. Non-compliance will lead to penalties as per the Proclamation and Directive. Market Impact and Future Prospects This initiative marks a significant step in Ethiopia’s efforts to develop a well-regulated capital market, aligning with global best practices. By enforcing stricter compliance measures, the ECMA aims to build investor confidence and create a more transparent financial ecosystem. Publicly held companies are urged to act swiftly to avoid penalties and ensure a seamless transition to the regulated market framework.

Ethiopia and Russia Expand Non-Dollar Trade Amid Potential U.S. Tariffs

Ethiopia has strengthened its economic ties with Russia by reaching a new trade agreement that allows transactions in their respective national currencies, bypassing the US dollar. This move is part of Ethiopia’s broader strategy to address its persistent foreign currency shortages while deepening trade relations with global partners outside the Western financial system. The agreement aligns with Russia’s push to expand non-dollar trade mechanisms in response to Western sanctions, further integrating Ethiopia into a growing network of nations seeking alternatives to the dollar. However, such moves could expose Ethiopia to potential economic repercussions, including a 100% tariff from the United States. Ethiopia, along with Nigeria and Tunisia, has formally entered into an agreement with Russia to conduct trade transactions using their respective national currencies. This decision is part of Moscow’s broader strategy to establish alternative trade mechanisms following Western sanctions imposed after the war in Ukraine. With this deal, Ethiopia joins a growing list of 40 countries that have established non-dollar trade agreements with Russia, according to the Kremlin. Several African nations, including Algeria, Egypt, Morocco, and South Africa, were among the first to receive approval for similar arrangements in September 2023. Russia has been actively working to bypass US-led financial restrictions by promoting direct currency exchanges with “friendly and independent states.” Ethiopian trade representatives, along with those from Argentina, Cambodia, Laos, Mexico, Nigeria, and Tunisia, have been granted licenses to conduct foreign currency transactions under Russia’s new financial framework. The agreement is expected to help Ethiopia alleviate its persistent foreign currency shortages and streamline trade with Russia. It also strengthens bilateral economic relations, positioning Ethiopia as a key player in emerging non-dollar trade networks. Ethiopia’s engagement with Russia follows its landmark currency swap agreement with the UAE in July 2023. Under that deal, the central banks of both countries agreed to exchange 46 billion Ethiopian Birr and 3 billion UAE Dirhams, allowing businesses to conduct transactions in their local currencies. The memorandum of understanding, signed in Addis Ababa by Mamo Mehretu, Governor of the National Bank of Ethiopia, and Khalid Mohamed Balama, Governor of the Central Bank of the UAE, reflects Ethiopia’s strategic push to diversify its foreign exchange mechanisms. This deal aims to facilitate smoother trade transactions and reduce the country’s dependence on the US dollar. Ethiopia’s move toward non-dollar trade, while economically strategic, may come with significant geopolitical risks. Reports suggest that the United States is considering imposing a 100% tariff on countries that actively reduce their reliance on the dollar as the world’s primary reserve currency. Former U.S. President Donald Trump previously warned of punitive measures against nations seeking alternatives to the dollar, and Washington has closely monitored de-dollarization trends. If the Biden administration or a future U.S. government moves forward with such tariffs, Ethiopian exports could face substantial barriers in American markets, adding pressure to an already fragile economy. Ethiopia’s decision to engage in currency swaps with both Russia and the UAE underscores its urgent need for foreign exchange solutions. However, the global financial landscape is shifting, with increased polarization between dollar-dependent economies and those seeking alternatives. As Ethiopia continues on this path, it must carefully navigate potential economic consequences. Strengthening trade partnerships outside the dollar system could provide short-term relief from forex shortages, but it also risks triggering diplomatic and financial countermeasures from major Western economies. The coming months will be crucial in determining whether Ethiopia’s bold economic diversification efforts will bring stability—or provoke economic retaliation from the United States and its allies.

Addis Ababa Revenue Bureau Establishes Quality Assurance Unit for Tax Audits

The Addis Ababa City Administration Revenue Bureau has announced the establishment of a new quality assurance unit to enhance the accuracy and fairness of tax audit decisions. This unit will be responsible for re-auditing tax assessments to ensure their quality and correctness. The newly formed unit aims to review audit decisions that were previously solely determined by tax auditors, verifying their validity and addressing any errors or inconsistencies. This process is expected to improve the overall integrity of tax audits and strengthen accountability within the system. According to the Bureau, the unit will re-examine tax audit decisions made since July 2016 and take corrective measures where necessary. Additionally, tax assessments conducted across all branch offices will be subject to re-evaluation by this unit. In a statement to EBC, the Bureau emphasized the importance of taxpayer cooperation, urging businesses and individuals to provide requested information promptly. The Bureau assured taxpayers that the new unit’s objective is to rectify incorrect audit decisions and hold auditors accountable for any errors.

Commercial Bank of Ethiopia Surpasses 1.4 Trillion Birr in Total Deposits

The Commercial Bank of Ethiopia (CBE) has achieved a significant milestone, with its total deposits exceeding 1.4 trillion birr. This accomplishment was announced during the bank’s half-year performance review for the 2017 fiscal year, highlighting its robust financial growth and operational efficiency. In the first six months of the fiscal year, the CBE successfully mobilized 245.9 billion birr in deposits, contributing to the overall deposit portfolio surpassing the 1.4 trillion birr mark. This performance represents a 147.6% achievement against the bank’s initial targets, underscoring its strong market presence and customer trust. Notably, the CBE’s deposit mobilization accounted for 58.3% of the total deposits collected nationwide during the same period, which stood at 423.1 billion birr. This dominant market share reflects the bank’s pivotal role in Ethiopia’s financial sector and its ability to attract and retain customers. The bank attributed this success to its enhanced customer relationships and improved service quality, which have strengthened its reputation as a reliable financial institution. Additionally, the CBE emphasized its commitment to supporting Ethiopia’s economic growth, leveraging its extensive deposit base to drive development initiatives across the country. This achievement positions the CBE as a key player in Ethiopia’s banking industry, with its growing deposit portfolio expected to further fuel economic activities and contribute to the nation’s financial stability.

Ethiopian Shipping and Logistics Reports 9.3 Billion Birr Profit in the First Half of the Fiscal Year

Addis Ababa, Ethiopia – Ethiopian Shipping and Logistics (ESL) has recorded a 9.3 billion birr profit in the first half of the 2024/25 fiscal year, significantly exceeding its initial financial projections. As Africa’s only deep-sea shipping operator, ESL continues to strengthen its foothold in the maritime logistics industry, contributing to Ethiopia’s trade and economic growth. According to CEO Berisso Amallo, the company had originally forecasted a profit of 6.2 billion birr for the first six months of the fiscal year. However, ESL’s actual profit exceeded this target by an impressive 150%, reflecting its operational efficiency and the impact of favorable economic policies. In terms of revenue, the company generated 46.8 billion birr, surpassing its 44.1 billion birr goal. The CEO attributed the company’s strong financial performance to several crucial factors: Looking ahead, ESL aims to: ESL’s strong financial results reflect not only its adaptability to Ethiopia’s evolving economic landscape but also its ability to compete on an international level. As global trade routes shift and regional economies develop, ESL is positioning itself to play a crucial role in the future of African maritime logistics.

Ethiopia to Lift Lending Cap by September, Paving the Way for Credit Expansion

Ethiopia is set to remove its two-year-old lending cap by September 2025, a major shift aimed at stimulating credit growth and supporting economic expansion. The move, announced in the latest International Monetary Fund (IMF) review of Ethiopia’s economic reform program, is part of broader efforts to modernize the country’s financial sector and transition toward a more market-driven economy. The National Bank of Ethiopia (NBE) first imposed the lending cap in August 2021 to combat high inflation caused by rapid credit expansion. Initially, the restriction limited commercial banks to increasing their annual lending by only 14% of their previous year’s loan volume. By the end of last year, this cap was slightly raised to 18%. However, businesses and financial institutions have long argued that the restriction severely constrained liquidity, limiting investment opportunities, and slowing economic growth. With the cap in place, access to financing has been a major challenge, particularly for small and medium-sized enterprises (SMEs), which rely heavily on bank loans for expansion. Many businesses faced delays in securing funds, while sectors such as manufacturing, construction, and agriculture struggled to access the capital needed for growth. The decision to lift the cap marks a significant policy reversal and aligns with Ethiopia’s broader financial reforms. According to the IMF, the removal of credit growth caps is a key step in transitioning toward market-based financial policies, where lending decisions will be driven more by economic fundamentals rather than regulatory constraints. However, the IMF emphasized that this shift must be carefully managed to avoid financial instability. To ensure a smooth transition, the central bank is expected to adopt a more flexible approach to monetary policy while continuing to monitor inflation and liquidity conditions closely. The NBE has also committed to gradually adjusting interest rates to maintain positive real rates by March 2025, ensuring that borrowing costs reflect economic conditions. Lifting the lending cap is expected to provide a much-needed boost to Ethiopia’s economy. With banks able to extend more credit, businesses and investors will have greater access to financing, allowing for expansion, job creation, and improved productivity. The removal of restrictions could also reinvigorate the real estate and construction sectors, which have faced significant financing hurdles due to limited credit availability. However, financial experts caution that while increasing credit availability is positive, it must be accompanied by effective inflation control measures. Ethiopia has faced rising inflationary pressures, exacerbated by the depreciation of the Ethiopian birr since the country moved to a floating exchange rate system six months ago. The currency has lost over 100% of its value against the U.S. dollar, leading to increased import costs and inflationary risks. The IMF projects that inflation will peak at around 25% in mid-to-late 2025 before gradually declining to single digits by 2028. To manage these risks, the central bank will need to implement a data-driven approach to monetary policy, ensuring that increased lending does not fuel excessive inflation. Despite the positive outlook, the transition will require careful planning. The IMF has stressed the importance of sequencing reforms properly and maintaining clear communication with financial institutions and businesses to manage expectations. The central bank must also balance credit expansion with measures to stabilize the exchange rate and avoid excessive liquidity in the market. One of the key recommendations from the IMF is to avoid direct central bank financing of government spending, which could undermine efforts to control inflation. Instead, policymakers are encouraged to focus on strengthening financial sector oversight and ensuring that banks allocate credit efficiently. As Ethiopia moves toward lifting lending restrictions, the success of the reform will depend on how well authorities manage inflation, maintain investor confidence, and support a smooth transition to a more open and market-oriented financial system. If executed effectively, the move could mark a turning point for Ethiopia’s banking sector and broader economic trajectory, unlocking new opportunities for businesses and investors alike.

EIH reports 901 bln birr in six-month revenues

Gov’t in midst of another attempt at selling off sugar estates Ethiopian Investment Holdings (EIH) reports the state-owned enterprises under its wing amassed 901 billion birr in total revenues over the first half of the fiscal year. The figure is equivalent to USD 5.1 billion and stands on par with 20 percent of the country’s total tax revenue over the reporting period, according to Brook Taye, CEO of Ethiopia’s first sovereign wealth fund, who made the comments at a networking event organized by the European Chamber in Ethiopia on January 23, 2025. EIH serves as the government’s strategic investment arm, overseeing and managing the nation’s state-owned enterprises. It has full ownership of state-owned enterprises such as Ethiopian Airlines, the Commercial Bank of Ethiopia, Ethio telecom, the Ethiopian Insurance Corporation, Ethiopian Shipping Lines as well as minority stakes in joint ventures such as AMCE. EIH collects dividends from 40 companies under its management. “This year alone, we paid 5.3 billion birr in the first quarter. We are expected to contribute a total of 14 billion birr to the national budget, and whatever remains becomes our investment capital. We deploy this capital to ensure that companies entering the market have no difficulty accessing investment capital,” the CEO said. “We aim to be a de-risking partner for investors—whether through in-kind contributions or equity investments, we are here to support them when they seek investment.” Brook told European investors at the event that for most companies entering Ethiopia, the biggest challenge is navigating the local legal landscape, including issues with customs and various government institutions. He said EIH is ready to help investors through the process. “If an investor seeks 3,000 hectares of land for a project for instance, they no longer need to navigate various regions to find suitable land with the right agro-climatic conditions. Instead, EIH utilizes its comprehensive database to input specific parameters, identify the appropriate land, and ensure the investor can focus entirely on launching their business,” said the CEO. He indicated that EIH can invest in equity, allowing it to support investors who typically bring in foreign exchange, while EIH handles the birr component, utilizing its own capital. The CEO emphasized that this is not debt financing, but rather equity investment. Brook also provided an update on Ethio telecom’s partial privatization process, the offering for which is set to close in mid-February, and disclosed plans to fully privatize eight sugar estates under the Ethiopian Sugar Industry Group. The privatization of sugar estates has been attempted several times before, with each attempt failing due to a lack of investor interest and concerns about security and other factors. “Meanwhile, companies such as the insurance, shipping, and printing firms are exploring the possibility of listing on the stock exchange,” said Brook. He noted that foreign investors will be permitted to participate in the exchange market, with a quota of up to 30 percent. According to an IMF report issued on January 29, 2025, reviewing the progress on the implementation of the IMF program agreement reached with Ethiopia in July 2024, the government has pledged to embark on restructuring electricity tariffs and involving the private sector in the railway and sugar industries. “We have relaunched the privatization process for nine sugar estates to attract private sector investment to exploit Ethiopia’s sugar industry potential and help recoup the large public investments in the sector. Direct negotiations on eight sugar companies are underway, with a view to transfer of assets to successful private investors by end-December 2025,” reads the report.

Bank Abyssinia Inaugurates Modern Banking Service Center in Collaboration with Chaka Buna

Bank Abyssinia inaugurated its state-of-the-art banking service center at its headquarters yesterday, January 22, 2017, in collaboration with Chaka Buna. The event was celebrated with great enthusiasm in the presence of the bank’s CEO, Ato Bekalu Zeleke, Chaka Buna owner, Ato Bisrat Belay, and other invited guests. Bank Abyssinia has always been at the forefront of modern banking services, recognized as a preferred choice for customers. With over 930 branches, more than 1,600 ATMs, and 3,000 POS machines, the bank also offers cutting-edge mobile and internet banking services. Additionally, the bank has introduced Virtual Banking Centers, e-commerce services, contactless cards, and various digital payment solutions to enhance user experience. Taking inspiration from global trends, the bank is now integrating additional value-added services at its branches, transforming them into multi-functional service centers in collaboration with strategic partners. As part of this initiative, the newly launched modern banking service in partnership with Chaka Buna enables customers to access banking services through Interactive Teller Machines (ITMs) and self-service tablets located inside the café. Moreover, the café and restaurant services at the center will be completely cashless and paperless, offering a seamless experience through various digital payment options. This innovative approach is expected to enhance convenience and efficiency for customers, setting a new standard in banking services. At the inauguration ceremony, it was announced that similar centers will be established in selected locations in the future. Finally, Chaka Buna expressed its sincere appreciation to Bank Abyssinia for embracing the vision and demonstrating a strong commitment to collaboration.