Mintesinot Nigussie – Page 21 – Ethiopian Business Review

Kenya and the International Monetary Fund (IMF) have mutually agreed to terminate the ninth review of their multi-billion-shilling funding programme, originally set to run until 2025. The move, confirmed by both parties, signals a critical shift in the country’s financial strategy as the government grapples with mounting debt and fiscal shortfalls.

According to MSN News, a global news platform operated by Microsoft, the decision effectively halts the disbursement of USD 490 million (KSh 63.4 billion) under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), alongside an additional USD360.9 million (KSh 46.7 billion) earmarked for climate financing under the Rapid Support Facility.

In an exclusive interview with TUKO.co.ke, economist Churchill Ogutu pointed to Kenya’s inability to meet key structural benchmarks and fiscal targets as a major factor behind the decision.

“Hardly surprising that the ninth review could not be completed,” Ogutu stated. “The IMF closely monitors fiscal targets such as revenue collection and structural reforms. Kenya has struggled to meet these requirements, making it increasingly difficult to justify continued disbursements.”

According to MSN News, the National Treasury’s 2025 Budget Policy Statement had already hinted at the shift, indicating that there would be no further IMF financing in the next fiscal year. This stands in contrast to April 2021, when Kenya entered the programme amid economic shocks and liquidity concerns.

Despite the termination, Ogutu suggested that Kenya could still seek a fresh agreement with the IMF, albeit under different terms.

“The successor programme could take various forms—a financed one, a non-funded one, or a precautionary one. It’s a wait-and-see on what direction the government takes,” he explained.

However, without immediate IMF support, Kenya may have to rely on costlier external and domestic borrowing, including Eurobonds and syndicated loans. Experts warn that such alternatives could further strain the country’s rising public debt.

As reported by MSN News, Kenya’s total public debt stood at USD 77.14 billion (KSh 11.02 trillion) in January 2025, with external borrowing at USD 39.32 billion (KSh 5.09 trillion) and domestic borrowing at KSh 5.93 trillion. The government’s aggressive borrowing strategy has seen it take on an additional KSh 440 billion in just seven months under President William Ruto’s administration.

While Kenya must still repay the IMF funds already disbursed, Ogutu noted that if the ninth review had gone through, the country’s borrowing under the programme would have reached its ceiling.

In a groundbreaking collaboration, Global Bank Ethiopia, Lucy Insurance S.C., and Kacha Digital Financial Services have launched “Agar,” Ethiopia’s first digital insurance and loan service, marking a transformative step in the country’s financial sector. Tailored to meet the needs of insurance customers, meter taxi drivers, and salaried employees, this innovative service offers digital loan and savings solutions, effectively breaking the barriers posed by traditional insurance models.

Historically, the Ethiopian insurance sector has been anchored in cumbersome paperwork and rigid documentation systems, limiting its reach and growth. Many potential clients, particularly those viewing insurance as a luxury, have been hesitant to engage with traditional services. Adefris Wesen, CEO of Lucy Insurance, acknowledges this limitation, emphasizing, “The traditional insurance system inhibited the sector’s growth, reflected in its minimal contribution to the country’s GDP.” With the advent of “Agar,” however, digitalization is set to revolutionize service delivery, enhance accessibility, and bolster the sector’s contribution to the nation’s economy.

In line with Ethiopia’s ambitious Digital 2025 initiative, the National Bank of Ethiopia (NBE) has been instrumental in promoting digital financial services. Hailemariam, Advisor to the Deputy Governor of NBE, highlights the pivotal role digital finance plays in fostering financial inclusion, adding, “This partnership will contribute to Ethiopia’s Digital 2025 initiative and enhance accessibility, while ensuring accountability, cybersecurity, and consumer protection.”

“Agar Digital Insurance” stands as Ethiopia’s first insure-tech product, allowing users to seamlessly purchase insurance via mobile phones without the need for branch visits. By eliminating paperwork, the service offers a hassle-free digital experience. Available through the Kacha mobile app, it not only enables users to purchase insurance but also provides digital loans to ease premium payments. Customers can opt for flexible repayment schedules, from 1 to 9 months, ensuring uninterrupted coverage even during financial challenges.

In addition, two new services were unveiled today: Agar for Drivers, which offers meter taxi drivers quick access to digital loans for urgent vehicle repairs or expenses, and Agar for Salaried Employees, a salary advance loan service that allows employees to access a portion of their salary before payday without collateral.

This dynamic, digital-first approach is poised to make insurance and financial services more accessible, affordable, and efficient, propelling Ethiopia’s financial sector into a new era of innovation and inclusion.

Despite Ethiopia’s ongoing macroeconomic reforms, fixed-income earners continue to feel the pressure of rising living costs. Dr. Eyob Tekalign, State Minister of Finance, acknowledged that while certain segments of society are benefiting from increased earnings, those with stable salaries still struggle with inflation.

Speaking at a public forum organized by the Prime Minister’s Office, Dr. Eyob explained that the reforms are aimed at stabilizing the economy, particularly by narrowing the gap between the official and black market exchange rates. He highlighted the government’s efforts to ease inflationary pressures, including allocating 70 billion birr to fuel subsidies and refraining from imposing additional taxes.

He also noted that structural adjustments in production and supply have contributed to stabilizing prices, but further improvements are still needed. To fully address the challenges, he emphasized the importance of continued collaboration between the government and the public.

Ethiopia has seen a significant boost in foreign exchange availability following the implementation of macroeconomic reforms, with key figures pointing to economic progress. Reflecting on the country’s economic progress during a public forum organized by the Prime Minister’s Office, Minister of Planning and Development, Dr. Fitsum Assefa, shared that exports have surged by 102% in the past seven months compared to the same period last year. Additionally, USD3.9 billion has been received from development partners, and remittances have risen by 14% compared to the previous year.

Dr. Fitsum further explained that the National Bank of Ethiopia’s foreign exchange auction system has facilitated USD5.1 billion in foreign exchange purchases by banks, with USD4.4 billion sold and a USD720 million surplus remaining in the banking system. This surplus, she noted, has resolved concerns about foreign exchange availability for viable investments.

The Minister also highlighted a 20% increase in the supply of capital goods for manufacturing compared to the same period last year. Through the Ethiopian Manufacturing Movement, 395 factories that had previously halted production due to national and international challenges have resumed operations. Dr. Fitsum emphasized that foreign exchange is no longer a structural problem for Ethiopia’s industries, paving the way for continued investment and growth.

Ethio Telecom has delivered impressive financial and operational results, posting a 7.9% increase in subscriptions, a 43% surge in top-line growth, and a 55.5% rise in EBITDA margin year-on-year. These gains pushed the state-owned telecom giant’s provisional revenue to ETB 61.9 billion for the first half of the Ethiopian fiscal year 2024/25. The figures were presented during a six-month performance dialogue with Ethiopian Investment Holdings (EIH).

A major contributor to this success is Telebirr, Ethio Telecom’s rapidly expanding digital finance platform. According to EIH, Telebirr facilitated transactions worth ETB 1.03 trillion for over 51.5 million users during the reporting period, generating ETB 1.67 billion in revenue, underscoring its growing role in Ethiopia’s digital economy.

EIH commended Ethio Telecom’s strategic execution, digital innovation, and contributions to financial inclusion. Looking ahead, the holding company advised Ethio Telecom to maintain its growth trajectory by enhancing service quality amid intensifying competition, optimizing operational efficiency, and staying attuned to global telecom and banking trends to ensure seamless industry collaboration.

Addis Ababa faces significant food waste challenges as its food supply heavily relies on produce from rural Ethiopia and imported industrial foods. A substantial portion of food is lost or spoiled during transportation, exacerbating food insecurity in the capital.

“We can imagine how many people we could feed if we prevented this level of food loss,” said Dr. Endale Amare, Senior Researcher and Head of Food and Nutrition Sciences at the Ethiopian Public Health Institute (EPHI). “Addressing this issue requires efficient technology and innovative solutions, which we will explore in this high-level discussion.”

Beyond supply chain inefficiencies, household food waste is also a growing concern due to limited awareness. Additionally, concerns over agricultural productivity and the health risks associated with industrial foods remain key issues.

These challenges were highlighted at the launch of the EcoFoodSystems Workshops, a collaborative initiative aimed at tackling malnutrition in Addis Ababa’s food system. Led by Galway University in partnership with EPHI, the project is funded by the European Union (EU) and the International Fund for Agricultural Development (IFAD). The workshops will focus on overlooked consumer groups and identify priority areas for action.

The EcoFoodSystems project seeks to generate evidence on urban malnutrition and unsustainable food systems. It is part of the broader Ethiopian Food System Transformation Pathway, spearheaded by the Ministry of Agriculture and the Ethiopian Agriculture Institute, with a focus on policy reforms and capacity-building for researchers.

According to projections, by 2050, 70% of cities worldwide are expected to face food insecurity. In Addis Ababa, malnutrition stunts children’s growth and cognitive development, while excessive consumption of unhealthy diets contributes to chronic illnesses such as diabetes and heart disease. These health crises not only affect individuals but also pose long-term economic challenges for the country.

Dr. Endale announced that Ethiopia is set to introduce a proclamation aimed at combating unhealthy diets. Highlighting the impact of inflation on food security, he stated, “At EPHI, we estimate the cost of a healthy diet based on current market prices. Like in other countries, inflation could present challenges. Currently, global reports show that only one-third of the world’s population can afford a nutritious diet.”

Amid inflation, he also advised consumers to purchase a variety of small food portions rather than buying single products in bulk, promoting a more balanced and sustainable diet.

The Ethiopian Coffee and Tea Authority, in collaboration with the Italian government and the Commercial Bank of Ethiopia, has announced a loan aimed at supporting Ethiopian coffee producers, suppliers, and stakeholders across the sector’s value chain, according to the Ministry of Agriculture.

The Italian government has approved a loan of 10 million euros (approximately 10.9 million USD) for the sector, with the Commercial Bank of Ethiopia responsible for administering the funds.

Minister of Agriculture Dr. Girma Amente stated that more than 5 million farmers and traders are involved in Ethiopia’s coffee production value chain. He highlighted that financial constraints remain a major challenge within the coffee sector, and the extended credit service from the Italian government is expected to significantly boost productivity.

He also pointed to the tangible improvements made over the past five years in increasing both coffee production and productivity, underlined by the Green Legacy Program, which has contributed to a rise in the country’s forest cover and the planting of billions of coffee seedlings.

Michael Mora, Director of the Italian Development Cooperation Agency, emphasized that the Italian government’s support reflects a commitment to the joint development efforts between the two nations. He noted that coffee is not only an economic asset for Ethiopia but also a key part of the nation’s identity.

Commercial Bank of Ethiopia President Abe Sano acknowledged the obstacles affecting the coffee sector, including market fluctuations and production challenges. He reaffirmed that Ethiopia has the potential to produce world-class coffee, and cooperation is key to strengthening the sector’s value chain.

Ethiopian Airlines has introduced a Boeing 737-800 Business Jet to its fleet, dedicated exclusively to VIP and small-group charter flights. The move signals the airline’s growing focus on premium travel, catering to Africa’s investors, business leaders, diplomats, and high-profile travelers seeking world-class service with greater flexibility and privacy.

According to Ethiopian Airlines, the newly acquired aircraft is tailored for a superior in-flight experience, featuring a spacious and elegantly designed cabin with premium seating. Configured to accommodate 19 passengers for commercial operations and 32 for private use, the jet provides an exclusive, intimate atmosphere. Passengers can enjoy state-of-the-art entertainment on up to 42-inch monitors, high-speed Wi-Fi, and personalized onboard dining.

“With the addition of this Boeing 737-800 Business Jet, we are elevating our charter service to new heights,” said Ethiopian Airlines Group CEO, Mr. Mesfin Tasew. “This is yet another step in our commitment to fostering business and investment opportunities across Africa and beyond.”

Beyond luxury, the new Business Jet enhances convenience and efficiency, offering flexible flight schedules, access to private terminals, and extended range capabilities for seamless short- and medium-haul charter operations. Ethiopian Airlines’ latest offering strengthens its position as Africa’s premier aviation group, reinforcing its commitment to meeting the evolving needs of business and elite travelers.

Belgium and Rwanda have expelled each other’s diplomats, marking a sharp deterioration in relations between the two countries. According to the Reuters, the expulsion comes amid escalating tensions over the conflict in the eastern Democratic Republic of Congo, where Rwanda is accused of backing M23 rebels. Kigali has given Belgian diplomats 48 hours to leave, accusing Brussels of “manipulating lies” to create a hostile narrative against Rwanda.

Belgium swiftly retaliated, with Foreign Affairs Minister Maxime Prevot condemning the move as “disproportionate” and accusing Rwanda of refusing to engage in dialogue over their differences. Brussels announced it would declare Rwandan diplomats persona non grata in response.

The dispute comes at a time when African leaders are pushing for a lasting ceasefire in Congo, where violence continues to disrupt the region. Rwanda’s involvement in the conflict has raised concerns internationally, and the expulsion of diplomats is a further blow to diplomatic relations between these two nations.

Ethiopia has officially signed a contract with Shanghai Engineering Centre of Microsatellite for the procurement of its third Earth observation satellite, Ethiopian Remote Sensing Satellite-2 (ETRSS-2). The agreement, finalized through an international open tender, underscores the country’s expanding space ambitions and its commitment to leveraging technology for economic and environmental development.

The contract was signed by Abdisa Yilma, Director General of the Ethiopian Space Science and Geospatial Institute (ESSGI), and Xiaocheng Zhu, Deputy Director General of the Shanghai Engineering Centre of Microsatellite, with Dr. Fozia Amin, State Minister for Innovation and Technology, reaffirming the government’s commitment to the project.

According to the Institute, ETRSS-2 is slated for completion in 18 months and will have a five-year operational lifespan. The satellite is expected to provide crucial data for agriculture, forestry, water resource management, and disaster risk reduction, enhancing Ethiopia’s ability to respond to environmental challenges. With two satellites already in orbit, Ethiopia continues to expand its space capabilities, reinforcing technology as a pillar of sustainable development.

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IMF Disbursements Suspended as Kenya Fails to Meet Conditions

Agar Takes Insurance to the Heart of Every Ethiopian Home

Rising Costs Squeeze Fixed-Income Ethiopians Amid Economic Overhaul

Ethiopia Sees 102% Export Surge, USD3.9B Foreign Exchange from Partners, and USD720M Surplus

Ethio Telecom’s Telebirr Processes ETB 1.03 Trillion in Transactions, Reports ETB 1.67 Billion Revenue

Addis Ababa Faces Rising Food Waste and Malnutrition

Ethiopia Secures USD10.9M Loan from Italy to Boost Coffee Sector’s Growth

Ethiopian Airlines Expands VIP Charter Services with Boeing 737-800 Business Jet

Belgium and Rwanda in High-Stakes Diplomatic Clash Over Eastern Congo Role

Ethiopia Secures Deal for Third Earth Observation Satellite