The reliance on remittance has scaled up globally from household level to national economies following the massive workforce flow in the contemporary global economy. Ethiopia, a country that just woke up to this reality, has countless reasons to regard remittance as its biggest source of foreign currency. Especially in the last decade, remittance flows increased significantly surpassing export revenue. The annual remittance flow currently stands at USD5.3 billion. However, the annual remittance sent via official channels doesn’t match the huge number of Ethiopians residing abroad. EBR’s Ashenafi Endale investigates the reasons behind.

The transformation of humanitarian organizations into financial institutions in 1997 was the beginning of operation of Micro Finance Institutions (MFIs) in Ethiopia. From then on, MFIs have showed remarkable progress in number, outreach, coverage and performance. Currently, 40 MFIs operating in the country serve close to 10 million clients nationwide while 15 more are in the making. Breaking the trend in the rest of the world, Ethiopia’s microfinance industry is born and raised in rural parts of the country. However, MFIs are currently conquering urban Ethiopia and providing credit especially for business establishments. Urbanites now make up close to 10Pct of the clientele of MFIs. The four pioneer MFIs, whose capital is way larger than most small and mid sized banks, are planning to mold themselves into conventional banks. On the other hand, the rest are pushing up their credit limits in order to capture the attention of the large segment of the unbanked population. Although most MFIs in Ethiopia have reached maturity and success, they are not immune from problems. EBR’s Ashenafi Endale reports.

Food insecurity remains a key challenge for Ethiopia. More than eight million people are in need of urgent assistance and 70Pct of the country’s population earns below USD1.9 a day. More than 30,000 children, on average, with severe acute malnutrition (SAM) are admitted for treatment every month. Internal conflicts and climatic shocks adversely impact people’s livelihoods, making them unable to meet their basic needs, while exacerbating the food insecurity situation in the country. The failure to transform the agriculture sector, whose contribution to the economy has declined but remains a source of revenue for over three-fourths of the population, has made many food-insecure. EBR’s Ashenafi Endale explores.

For long, import business has been lucrative in Ethiopia, fetching relatively higher profits in a short period of time. However, this reality has been changing lately. With the persistent foreign currency shortage and import-discouraging policies of the government, many importers are now closing their doors, shifting to other sectors in search of better fortunes. EBR’s Ashenafi Endale explores.