Ethiopia, which is not currently part of the AGOA agreement, is preparing to enter negotiations with the United States under a new tariff framework following the enactment of President Donald Trump’s “One Big Beautiful Bill,” which includes a 10% import duty affecting countries including Ethiopia.

In an exclusive interview with The Reporter, Zerihun Abera, the ministry’s acting executive director for international and regional trade integration, said that the talks are taking place in the midst of the 10% duty imposed by the U.S. on imports from various countries including Ethiopia.

He added that the minister will enter into negotiations under this framework to ensure the benefits Ethiopia so far lost due to AGOA.

Moreover, Zerihun mentioned that the US has expressed its interest in agriculture, industry and other sectors selected for tariff increases in relation to Ethiopia, also adding that preparations have begun on how the increase will be implemented while protecting Ethiopia’s interests. The 10% tariff increase, he said, is not solely driven by U.S. interests. The adjustment will not be applied all at once, but rather after both countries submit the necessary documents, a joint technical committee is formed, and negotiations take place. He indicated that a document regarding this will be prepared and sent to the U.S. through the Ministry of Foreign Affairs.

“The ten percent tariff imposed by the US will bring the average down to ten percent overall. This will allow for strategic negotiations to be held to determine the tariff for each product separately, while protecting Ethiopia’s interests,” he added.

President Donald Trump has characterized tariffs as “the most beautiful word in the dictionary,” a sentiment he reiterated in every of his speech. He  announced a 10% tariff on imports from nearly all countries, effective April 5, 2025. Last week, the U.S. House of Representatives have passed the “One Big Beautiful Bill”, an enormous tax cut and spending package that represents a pillar of President Donald Trump’s agenda.

The Ministry of Finance has signed a series of major project agreements with various private developers under Ethiopia’s growing public-private partnership (PPP) framework. The signing ceremony, held at the Ministry’s conference hall, marks a new chapter in the government’s effort to mobilize private capital for national development.

Finance Minister Ahmed Shide highlighted that the legal and institutional framework now in place enables effective implementation of PPP projects. He stressed that the agreements signed will have “a significant impact on the economic and social development of the country.”

Seven new projects spanning housing, tourism, health, and diagnostics were formalized during the event. These include: Partial Forest Housing Development Projects in lmi Kura Sub-City:

Lot A1 Plot 4 and 7: ICE Home Development and Construction PLC will build a G+6 shopping mall and 1,200 residential units on 5.7 hectares, with a total investment of 32.37 billion birr.

Lot A1 Plot 12: OVID Chaka Housing Development PLC will construct two shopping malls and 1,852 homes across 9.45 hectares at a cost of 23.06 billion birr.

Additional Plot: The Ethiopian Construction Works Corporation, in collaboration with private investors, will develop 1,123 homes and 48 shops on 9.45 hectares for 11.7 billion birr.

Teyt Bet Housing Project in Arada Sub-City: OVID Kings Tower PLC will develop 1,823 housing units and a shopping center on 4.5 hectares for 4.31 billion birr.

Tourism Projects: Awash Waterfall Resort: Boston Partners PLC will build 50 luxury villas and related infrastructure on 11.6 hectares in Awash Park, investing 813.51 million birr.

Denbi Lake Lodge: MIDROC Investment Group will construct 15 bungalows, a restaurant, and amenities on 36.67 hectares for 125.89 million birr. Integrated Diagnostic Services Center: Aimed at boosting healthcare access, this $5.2 million initiative will provide laboratory and imaging services across six hospitals, including St. Peter’s Specialized Hospital. It will be executed by a consortium of Ceraba Lancet Africa, International Clinical Laboratories, and Pioneer Diagnostic Center.

The government has identified 34 projects across energy, transport, health, housing, logistics, and tourism as suitable for PPP implementation. These projects are at different stages, with selected developers expected to secure financing through loans and equity investments.

As part of this framework, on August 17, 2024, Ethiopia signed a power purchase and operation agreement with AMEA Power Aysha Wind One PLC for the USD620 million Aysha-1 Wind Power Project. The 300 MW project will be implemented under the MGA (Management Grant Agreement) model.

The Ministry’s Economic Development Department will continue to coordinate with stakeholders to ensure all PPP projects meet environmental and regulatory prerequisites. Future projects will also be screened and supported under this expanding development framework.

The House of Peoples’ Representatives has unanimously voted to repeal the outdated Foreign Employment Affairs Proclamation No. 923/2024 and replace it with Proclamation No. 1389/2025 during its 41st regular session held yesterday.

Presenting the resolution to parliament, Dr. Negeri Lencho, Chair of the Standing Committee on Human Resource Development, Employment, and Technology Affairs highlighted that the previous law contained segmented clauses restricting categories of overseas work, including domestic service, unskilled labor, and partially foreign-educated roles, which hindered citizens’ ability to access timely and efficient overseas employment. 

The revised law clarifies that it will prevent illegal foreign work permits, enable a modern centralized work permit agency, protect the rights and security of citizens working abroad, and require sending agencies to deposit standby funds, all to safeguard citizens. 

This will provide a streamlined pathway for overseas work, emphasizing professional and technical skills, and supporting individuals with varied vocational backgrounds, including those lacking formal credentials or having non-traditional experience. 

Minister Muferihat Kamil of Labor and Skills contrasted the changes, noting the repeal will eliminate previous restrictions and promote technology-backed professional development aligned with national competitiveness objectives. “Previously marginalized professions and semi-skilled workers faced legal barriers,” noted the Minister, praising the repeal as a victory for legal clarity and equal opportunity. 

Lawmakers noted that the draft proclamation will save citizens from illegal brokers and prevent illegal trafficking. 

At a recent session in the House of Peoples’ Representatives, Finance Minister Ahmed Shide reaffirmed the government’s firm position that spending must be contained within the country’s revenue capacity. Addressing questions from parliamentarians on the draft federal budget for the 2025/2026 Ethiopian fiscal year, the minister emphasized the need to balance ambitious expenditure plans with realistic revenue projections.

The proposed budget, totaling ETB 1.93 trillion, reflects a significant allocation toward recurrent spending, which accounts for the largest portion of expenditures. Minister Shide explained that while recurrent costs have risen, particularly due to debt servicing and social service obligations such as salaries and essential programs, the government remains committed to maintaining fiscal discipline and gradually improving capital investments.

Lawmakers expressed concern over the growing share of recurrent expenditures relative to capital spending, questioning how this shift might affect Ethiopia’s long-term economic growth and development goals. In response, the minister acknowledged these challenges but stressed that meeting recurrent obligations remains necessary to sustain the government’s functions and social commitments.

During the discussion, the minister also addressed ongoing tax reforms. He highlighted that the government is actively revising tax laws to enhance collection and ensure fairness, but he acknowledged that previous adjustments have already impacted households and businesses, raising legitimate concerns among the public.

Questions about the value-added tax on fuel also surfaced, with some parliamentarians asking whether the VAT diminishes the effect of fuel subsidies intended to ease consumer costs. Ahmed responded that subsidies need to be implemented in a targeted and fiscally sustainable manner, hinting at potential future reviews of subsidy and tax policies.

At the Afreximbank annual meeting in Abuja on June 27, Nigerian industrialist Aliko Dangote unveiled a sweeping strategy aiming to eliminate Africa’s reliance on fertilizer imports within 40 months. Central to this vision is a planned expansion of his USD2.5 billion granulated urea facility on the outskirts of Lagos, currently the continent’s largest of its type. The plant now produces 3 million MT annually, with 37% of its output exported primarily to the U.S.

Africa today imports over 6 million MT of fertilizer each year, which exerts considerable pressure on foreign exchange reserves, especially for countries like Ethiopia striving to stabilize external accounts and support agricultural development. Dangote’s ambition is to double current capacity, surpassing Qatar to become the world’s top urea producer. “In the next 40 months, Africa will not import fertilizer from anywhere. We have a very aggressive trajectory at the moment. We want to put Dangote to be the highest producer of urea, bigger and higher than Qatar. Just give me 40 months,” he declared.

Ethiopia has officially begun exporting electricity to Tanzania for the first time, transmitting power through Kenya’s high-voltage network in a successful pilot that signals a new era for regional electricity trade.

The Managing Director of the Kenya Electricity Transmission Company (KETRACO) announced on his social media page that the trial successfully transmitted electricity from Ethiopia through Kenya’s 400kV Suswa–Isinya transmission line to the Kenya–Tanzania interconnection. The power flow increased the line’s load from 225 megawatts to 262 megawatts, validating the corridor’s operational integrity and confirming seamless cross-border connectivity.

This marks the first instance of Ethiopia’s electricity reaching Tanzania via Kenya’s grid, positioning Ethiopia as a regional power supplier capable of influencing energy markets beyond its immediate borders.

The trial took place under the framework of the Eastern Africa Power Pool (EAPP), a 13-member regional initiative aimed at promoting energy sharing and power reliability across East Africa. Ethiopia, which currently exports around 200 MW to Kenya under a long-term power-purchase agreement, is strengthening its position in regional energy markets thanks to its expanding hydropower capacity

Financing for the transmission infrastructure facilitating this pilot was supported by Kenya’s National Treasury and development partners, including the World Bank, African Development Bank, French Development Agency, and the European Investment Bank. These networks form part of a larger regional plan to interconnect Eastern and Southern Africa’s electricity grids.

Ethiopia registered the fourth-highest increase in government debt-to-GDP ratio in Africa between 2024 and 2025, rising from 22.6 percent to 28.4 percent, according to the World Bank’s latest Africa Pulse report. Despite this sharp increase, Ethiopia still maintains the second-lowest debt ratio among the continent’s high-growth economies.

The World Bank attributes the rise to persistent infrastructure financing and mounting debt servicing obligations. While the country’s debt level remains comparatively low, the report cautions that such accelerated growth could jeopardize fiscal space, especially for essential sectors like health and education.

Public spending on these social services has reportedly declined to 15 percent of total revenue, down from 23 percent in 2022, as more funds are diverted toward debt repayment. The report warns that this shift may impact human capital development and long-term growth prospects if not carefully managed.

Inflationary pressure is also cited as a compounding risk. Ethiopia’s macroeconomic environment, shaped by domestic and external financing needs, continues to face volatility. The World Bank emphasizes the need for countries like Ethiopia to balance development ambitions with prudent fiscal management to avoid crowding out private investment and eroding policy credibility.

The report highlights the broader challenge facing many African economies: how to sustain infrastructure-led growth without undermining macroeconomic stability. For Ethiopia, maintaining investor confidence while navigating rising borrowing costs and competing spending demands will be a key test in the years ahead.

The National Bank of Ethiopia (NBE) has published its latest annual financial disclosure, verified by an independent auditor, offering a detailed look into the country’s monetary trajectory over the past five years. The findings point to a dramatic 200 percent increase in money supply, raising concerns over inflation and macroeconomic stability.

One of the report’s key revelations is the NBE’s provision of ETB 700 billion in direct advances to the Ministry of Finance between 2019 and 2024. The volume of cash circulating in Ethiopia’s economy has more than doubled, climbing from around ETB trillion five years ago to ETB 2.7 trillion by the end of the last fiscal year in June 2024. This surge has fueled macroeconomic imbalances, prompting renewed calls for policy reform and tighter fiscal discipline.

Encouragingly, the current fiscal year marks a turning point. For the first time in recent years, the federal government has refrained from taking direct loans from the National Bank. The central bank has also implemented corrective measures to absorb excess liquidity, a move seen as part of a broader macroeconomic stabilization effort.