Merry Christmas to everyone celebrating!🤗 Here’s a roundup of this week’s business and economic highlights.

ZamZam Bank Launches Sharia-Compliant Digital Lending Platform, Ansar

ZamZam Bank, Ethiopia’s pioneer in interest-free banking, has unveiled Ansar, a Sharia-compliant digital finance solution for individuals and MSMEs. Developed in partnership with Kifiya Financial Technology, Ansar operates as a Buy Now, Pay Later (BNPL) platform, connecting clients, suppliers, and the bank. The platform offers loans ranging from 100 to 500,000 birr without collateral, leveraging AI for credit assessment and efficient loan management. Over 200 suppliers are onboarded, facilitating seamless e-commerce transactions. Available on the Play Store, Ansar is set to expand its reach soon to the App Store. This innovation follows ZamZam’s offline-capable mobile banking app launched earlier this year. Shega

Ethiopia Exports Generate $2.63 Billion in First Five Months of Fiscal Year

Ethiopia has earned $2.63 billion in export revenue during the first five months of the 2024/2025 fiscal year, surpassing the target by 138.93%. This marks a 102.09% increase compared to the same period last year. Agricultural commodities led the export earnings, contributing 50.42%, followed by mining at 39.7%, manufacturing at 5.55%, and electricity exports at 4.31%. The growth in exports is attributed to the country’s comprehensive economic reforms. Ethiopia aims for 8.4% economic growth this fiscal year, with promising developments in agriculture, manufacturing, and mining.

Ethiopian Airlines and DRC Launch Air Congo

Ethiopian Airlines has partnered with the Government of the Republic of the Congo to establish Air Congo, with the DRC holding a 51% majority stake and Ethiopian Airlines managing the airline. This initiative supports Ethiopian Airlines’ Vision 2035 strategy to expand African hubs. Air Congo begins operations with two Boeing 737-800 aircraft, serving seven airports within the DRC. Ethiopian Airlines will provide technical support, including aircraft leasing, training for Congolese staff, and system support. This partnership enhances connectivity across Central Africa, promoting investment, trade, and tourism while contributing to regional socio-economic growth.

Nyala Insurance Partners with M-Pesa to Enhance Mobile Payments

Nyala Insurance has become the first Ethiopian insurer to integrate Safaricom’s M-Pesa mobile money service. This partnership enables Nyala’s customers to make premium payments, renew policies, and conduct other transactions through M-Pesa, offering greater flexibility and wider accessibility. Launched in Ethiopia in August 2023, M-Pesa has rapidly grown, reaching 8.3 million customers by October 2024. Nyala Insurance aims to leverage this platform to increase insurance adoption, particularly in rural areas with limited banking services. The move aligns with Nyala’s efforts to improve service efficiency and accessibility, reflecting Ethiopia’s growing digital economy. Shega

Ethiopia’s Monetary Policy Committee Holds Inaugural Meeting

Ethiopia’s National Bank (NBE) Monetary Policy Committee (MPC) met for the first time on December 31, 2024, to review the country’s macroeconomic performance and propose measures to maintain price stability and support growth. Inflation in Ethiopia reached a five-year low of 16.9% in November 2024, with food inflation declining and non-food inflation rising slightly. The economy grew by 8.1% in the 2023-24 fiscal year, driven by agriculture, industry, and services. The MPC decided to maintain the policy rate at 15% while adjusting the credit growth target from 14% to 18%. The committee emphasized that future decisions will be based on inflation trends and the broader economic outlook, with the next meeting scheduled for March 2025.

Ethiopia Earns $1 Billion from Gold Exports in Five Months

Ethiopia has achieved a significant milestone, earning over $1 billion from gold exports in just five months, according to the Ministry of Trade and Regional Integration. This surge is attributed to the country’s macroeconomic reforms, which have curbed illicit trade and boosted export revenues. Minister Kassahun Gorfe highlighted that the reforms, introduced in July 2024, have drastically reduced illegal trading in the gold sector. Last fiscal year, Ethiopia earned $300 million from gold exports, a sharp contrast to the recent $1 billion figure. These efforts have included stricter regulations and partnerships to tackle contraband and price manipulation.

Synergies and Challenges of Universal Banking in Ethiopia’s Capital Market

As Ethiopia’s capital market takes shape, the role of investment banks is gaining attention. Several commercial banks, including the Commercial Bank of Ethiopia, Siinqee Bank, and Amhara Bank, are exploring entry into investment banking. While combining commercial and investment banking offers benefits such as operational synergies, diversified revenue streams, and comprehensive services for clients, it also comes with risks. Potential conflicts of interest, reduced due diligence, and regulatory complexities could undermine market stability. Lessons from global financial history, such as the 2008 financial crisis, underscore the importance of a balanced regulatory framework to ensure that this model promotes growth without compromising financial stability. Read more

NBE Pauses New Forex Licenses to Evaluate Initial Bureaus

The National Bank of Ethiopia (NBE) has temporarily halted new forex trading license applications to assess the performance of five recently licensed independent foreign exchange bureaus: Dugda Fidelity, Ethio Independent, Global Independent, Robust Independent, and Yoga Forex Bureau. These licenses, issued in October 2024, marked the first time in decades that non-bank entities entered the forex market, aiming to curb parallel market activity following the floating of the Ethiopian birr. The bureaus operate on market-driven exchange rates, with stringent licensing requirements, including a 15 million birr capital minimum and a 30 million birr security deposit. NBE plans to resume licensing after evaluating the new market trend’s impact. The Reporter

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