Over the past two decades, deposits mobilized by commercial banks have skyrocketed more than 300 times, thanks to the massive expansion strategies that they have adopted. Such growth does not, however, mean a boost in financial inclusion. About three-fourths of the Ethiopian population remains unbanked. To make matters worse, the rise in the cost of living, which has forced the real interest rate to remain in the below zero territory, is already discouraging both the banked and unbanked population from depositing their money in banks, especially in urban areas. As a result, the contribution of saving towards the economy remains low, and is further exacerbated by the inflationary pressure that is eating the disposable incomes of citizens. EBR’s Kiya Ali explores.

Although Addis Ababa is not new to clinical laboratories, their steep rise in number over the past decade has been extra-ordinary. Encouraged by the growth in demand for such services, investors are now more interested in spending their money on setting up these labs. The road to success, however, has been a bumpy one. Despite their soaring numbers, experts say they are still too few considering the population of the country. EBR’s Ermias Mulugeta explores.

New Trend in Present Day Ethiopia

Regional governments are waking up and responding to burning economic issues. Unlike the top-down economic command chain under the former centralized government, regions have started strategizing on how to tap into and benefit from the huge opportunities in the economy. To end this and in contrast to trends of the past decade, they have set up separate offices for international relations and have started dealing with neighboring countries and non-regional towns. While such practices are welcomed by those calling for the economic sovereignty of states, it is feared that this would further sour the relations between the central and regional governments. EBR’s Ashenafi Endale writes.

Once home to emperors of the imperial times of Ethiopia, and later serving as a torture facility for Dergue regime, Unity Park has become the talk of the town since its opening three months ago. Financed by the United Arab Emirates, the construction of the Park cost more than USD160 million. The park displays what Ethiopia looked like during the 19th and 20th centuries along with Ethiopia’s great and recent emperors, including Emperor Menelik II and Emperor Haile Selassie, both of whom are featured with life-size waxwork statues. It also features the post-1991 political works of EPRDF-led government in the form of sculptures in the garden, representing the nine ethnic-based regional states. EBR’s Kiya Ali, who visited the park last month, explores.

For an Ethiopian who has not been there before, groups of people who play music loudly in the middle of sidewalks and colorful matatus are distinct characteristics of Kenya’s capital, Nairobi. A Pentecostal preaching the Bible on the side of the road, long queues for transportation, and deafening music from boutiques, on the other hand, are commonalities the city holds with the Ethiopian capital Addis Ababa. EBR’s Kiya Ali, who visited Nairobi last month, explores.

Not more than 10 oil suppliers were operational in Ethiopia a decade ago. Now that is just history. The number has now tripled, reaching 33 as of December 2019. Not only this, the ownership structure of these companies has also changed greatly. While oil suppliers established a decade ago were largely owned by foreigners or big corporate, they are now being replaced by locals. But making a profit and staying afloat has not been easy for the majority of them, largely because of the low profit margin set by the government and shortage of forex needed to import lubricants and bitumen. EBR’s Ashenafi Endale explores.

The agricultural sector remains underdeveloped and untapped in Ethiopia. Although the sector contributes a third of the country’s GDP and accounts for two-thirds of the workforce, it has not been given the attention it deserves as demonstrated by the minimal finance provided to the sector. Agriculture modernization plans have also remained a myth. Mentioning that it is high-risk, commercial banks are not willing to provide loans to farmers and other actors in the agricultural sector. Even the Development Bank of Ethiopia is no longer interested in financing farmers. Even worse, microfinance institutions, expected to reduce poverty and reach out financially excluded communities, are not in a position to provide much-needed agricultural finance. EBR’s Ashenafi Endale explores.

Being home to many internationally-acclaimed historical sites, Ethiopia has an immense local tourism potential. But the country has never capitalized on the opportunity. Adding to the minimal travelling habit amongst Ethiopians, the sector is still at its infancy. Tour companies also give more attention to international tourists, largely because it garners foreign currency. Investors are not interested in joining the local tourism sector as there is a sentiment that it is a low rate-of-return investment. Meanwhile, the Ministry of Culture and Tourism is attempting to create awareness amongst the public, but little has been achieved thus far. EBR’s Kiya Ali explores.

Is it applicable in Ethiopia

Recently, officials of the National Bank of Ethiopia (NBE) pledged to implement a market-driven exchange rate regime over the next three years. Governor of the NBE, Yinager Dessie, said that his government will opt for a more flexible foreign exchange market to stabilize the level of its currency, deemed overvalued by the IMF. While this is a decision welcomed by the Bretton Woods institutions, it also stirred up controversies over its relevance in solving the forex crisis which has existed for over two decades. Experts fear that it would worsen inflationary pressures and result in an economic crisis shortly thereafter. EBR’s Kiya Ali explores.

Cottage industry is a segment of the economy whose importance is usually sidelined in Ethiopia. Though accounting for an insignificant share of the economy, it is still believed to be a source of income for many relying on the production of handicrafts and small industry items. Requiring a very small amount of capital, cottage industries employ below 10 individuals and are known for very quality products that are hand-made and preferred by environment-sensitive consumers. Now, this traditional manufacturing system is facing extinction as the government prioritizes medium and large enterprises as well as industrial parks. EBR’s Ashenafi Endale investigates