Hi there👋
Last week was eventful, especially in finance, with the banking sector making significant moves. The forex shortage seems to be easing as banks are providing more liquidity to the market. There were also notable developments, such as the EU grant and progress on debt relief. On the global stage, President Trump made waves with his new tariff policies, which have impacted Ethiopia with a 10% minimum tariff. As we wrap up the week, it’s time to reflect on these milestones and gear up for the new week ahead.
Economy
Ethiopia Hits $2.7B in Import Substitution
Ethiopia has produced goods worth USD 2.7 billion in the first eight months of the current fiscal year under its import substitution strategy, per the Ministry of Industry. The initiative aims to cut foreign dependency, ease forex shortages, and boost job creation. With 96 key products targeted, local substitutes now cover over 43% of the domestic market. The country is on track to reach USD 3.9 billion by year-end. ENA
Ethiopia Secures Debt Relief Deal Without Haircut
Ethiopia’s official creditors have agreed to a draft debt restructuring that extends payment deadlines without reducing the total debt amount. The deal offers $2.5 billion in debt service relief through 2028, aligned with the IMF program. Co-chair William Roos emphasized it’s not just a liquidity issue but also a need to reduce debt in net present value terms. While bondholders reject proposed haircuts, the agreement—negotiated under the G20 Common Framework—shows stronger repayment capacity than Ghana or Zambia. Talks with bondholders and cooperation with China have been described as constructive. Reuters
Ethiopia and EU Sign €240 Million Grant Agreement
Ethiopia and the European Union (EU) have signed a €240 million grant agreement to support the country’s development. This funding, part of the 2024 Annual Action Programme (AAP-2024), focuses on strengthening Ethiopia’s agribusiness sector, expanding digital skills training, and fostering democratic institutions. It also addresses urgent needs, including restoring health services and supporting displaced individuals. Minister of Finance Ahmed Shide emphasized the importance of this partnership in driving private sector investment and modernizing key systems, while EU Ambassador Sofie From-Emmesberger highlighted the shared vision for Ethiopia’s sustainable development. Read here
Trump Imposes New Tariffs, Ethiopia Hit with 10% Levy
U.S. President Donald Trump has announced new tariffs on global trade, with levies ranging from 10% to 49% on several countries. Ethiopia faces a 10% tariff, adding to the challenges it already faces after being removed from the African Growth and Opportunity Act (AGOA) in 2022. The tariffs are part of the U.S.’s strategy to reduce its trade deficit and protect domestic industries. The new measures are expected to impact global trade, especially for countries like Ethiopia that rely on U.S. exports. Read here
Business
Ethiopia Earns $70M from Carbon Trading
Ethiopia has generated $70 million through carbon trading deals with various countries and institutions, thanks to its Green Legacy Initiative. The program, launched in 2019, has expanded forest cover to 23.6% and led to over 40 billion seedlings planted. The government plans to plant 7.5 billion more this rainy season. The initiative highlights Ethiopia’s push to combat deforestation and tap into carbon markets for sustainable development.
Horticulture Earns Ethiopia $366M in Eight Months
Ethiopia’s horticulture sector generated USD 366 million in revenue over the past eight months, according to Agriculture Minister Dr. Girma Amente. Speaking at the International Floriculture and Horticulture Trade Fair in Addis Ababa, he highlighted the sector’s rising role in the economy and called for stronger stakeholder collaboration. The three-day fair, organized by the Ethiopian Horticulture Producers and Exporters Association, aims to boost investment and promote sustainable growth in the industry. ENA
Ethiopian Airlines Launches Cargo Route to Macao
Ethiopian Airlines has launched a new cargo route to Macao, expanding its China network to 10 destinations. Operating twice weekly with a 400-ton weekly capacity, the route aims to boost trade between Africa and Asia. The move supports growing demand for efficient logistics and highlights the airline’s strategic role in global trade. Ethiopian Ambassador to China, Tefera Derbew, hailed the launch as a milestone in strengthening economic ties under initiatives like the Belt and Road.
Ethiopia Tightens Franco-Valuta Import Rules
The Ethiopian Customs Commission, alongside the National Bank of Ethiopia (NBE), has introduced major reforms to Franco-Valuta (non-forex) imports. The repeal of old laws gives NBE stronger oversight, with stricter scrutiny now applied to imports by government bodies, NGOs, and international organizations. Monthly reporting is now mandatory to curb misuse. These changes are part of Ethiopia’s broader effort to modernize trade finance and manage critical forex shortages.
Banking and Finance
Interbank Money Market Transactions Top 500 Billion Birr
The Ethiopian Interbank Money Market has surpassed 500 billion Birr in transaction volume just six months after its launch, according to the Ethiopian Securities Exchange. The milestone highlights increasing momentum and collaboration within Ethiopia’s financial sector.
CBE Allocates $122.5 Million in Forex for Importers
The Commercial Bank of Ethiopia (CBE) has allocated $122.5 million in foreign exchange to meet customer demands, covering requests submitted up to March 31, 2025. Of the 711 requests reviewed, 698 (98%) were approved. The allocation aims to support import activities, with a few pending requests still under review.
CBE Disburses 264.65 Billion Birr in Loans, Assets Hit 2.07 Trillion
The Commercial Bank of Ethiopia (CBE) disbursed 264.65 billion birr in loans over the past eight months, with 88.2% directed to the private sector. Digital loans reached 3.9 billion birr for 717,000 customers. Total assets grew to 2.073 trillion birr, while deposits climbed to 1.541 trillion birr. Interest-free banking via CBE Nur collected 47.04 billion birr. CBE now holds a 50.4% market share in total assets and continues to support innovation, entrepreneurship, and financial inclusion. Read here
NBE Holds Forex Auction, Birr Averages 131.71/USD
The National Bank of Ethiopia (NBE) conducted a foreign exchange auction on April 1, setting the weighted average rate at 131.71 birr per USD. Twelve banks received forex through the auction, part of broader reforms to enhance transparency and efficiency in forex allocation. The next auction will be held in two weeks, with details to be announced a day prior. Read here
Awash Bank Allocates Over $498 Million USD in Foreign Currency
Awash Bank has allocated more than $498 million USD to over 2,200 customers between January 1, 2025, and March 31, 2025, to help address Ethiopia’s foreign currency shortage. The bank has also provided over $100 million USD in assistance to domestic banks. The allocation prioritizes essential imports, including oil, fuel, sugar, and rice, as well as payments for education and medical expenses. With ongoing foreign currency auctions by the National Bank of Ethiopia, Awash Bank expects to continue meeting customer demands and contributing to a positive impact on the country’s forex market. Read here
That’s a wrap for the week! Stay tuned and keep following us for the latest updates.
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