In a move aimed at adapting to the changing economic landscape and maintaining competitiveness, the Commercial Bank of Ethiopia (CBE) has announced revised interest rates across various loan categories, effective March 7, 2025. These adjustments reflect the bank’s ongoing transformation efforts and its commitment to balancing operational sustainability with customer needs.

For agricultural loans, CBE has opted for a moderate increase in interest rates. Short-term agricultural loans, including overdrafts, will remain at 14%, while medium-term loans are set at 14.5%. Long-term agricultural loans, which encompass fertilizer financing, will see an increase to 15.5%. These adjustments are designed to support the sector while managing the bank’s rising operational costs.

In the housing sector, the bank has kept rates unchanged for residential condominium loans. Both the 40/60, 20/80, and 10/90 long-term schemes will continue to carry an interest rate of 12%. This decision aims to ensure that homebuyers continue to have access to affordable financing, particularly in a market where housing costs remain a significant concern for many Ethiopians.

The bank’s commercial loan portfolio also sees considerable changes. For non-export term loans, including short-term overdrafts, the interest rates will range from 14% to 16.5%, with short-term loans set at 15%, medium-term loans at 15.75%, and long-term loans at 16.5%. Commercial condominium loans, both for the 40/60 and 20/80 schemes, will now carry an interest rate of 16.5%, up from the previous 15.5%. This increase reflects the need to address the higher costs associated with commercial lending.

Import-related financing has also been adjusted, with short-term advance loans for import bills rising to 18%, up from 17%. Similarly, merchandise loans will now be set at 16.5% for short-term borrowing, an increase from the previous 15.5%. These increases are a response to the growing costs associated with international trade and the need to ensure financial viability in an evolving market.

Microfinance institutions, which play a key role in supporting small businesses, will experience significant rate hikes. Short-term loans will rise to 14%, up from 11.5%, while medium-term loans will increase to 14.5%. Long-term loans for microfinance institutions will see an increase to 15.5%, up from 12.5%. These changes reflect the bank’s strategy to manage the financial risks of lending to small-scale operations while ensuring continued profitability.

In the personal loan category, the bank has introduced the following updates: mortgage loans will now carry a 14% interest rate for long-term borrowers, vehicle loans will be set at 15%, and personal loans will also see a 15% interest rate for long-term borrowers. These adjustments aim to provide retail customers with access to financing options while aligning with the bank’s broader financial strategy.

By recalibrating its interest rates, CBE aims to continue offering essential financial services to individuals, businesses, and key economic sectors while managing its own operational costs and ensuring long-term sustainability.

The first meeting of the Ethiopia-South Sudan Joint Border Trade Committee is currently underway in Bishoftu town, marking a significant step in strengthening bilateral relations and enhancing cross-border trade between the two nations.

Ethiopia’s State Minister of Trade and Regional Integration, Ms. Yasmin Wahabrebi, highlighted the purpose of the meeting, stating that it aims to review the implementation status of the border trade protocol signed by the two countries. “This meeting is crucial for assessing progress and addressing challenges to ensure the effective implementation of the agreement,” she said.

Ms. Yasmin further emphasized that the discussions will focus on identifying key issues and exploring ways to strengthen bilateral relations through the agreement. “By working together, we can create a more robust trade environment that benefits both nations and fosters peace and stability in our border areas,” she added.

The agreement is seen as a vital tool for promoting peace and stability in the border regions, which have faced challenges such as contraband and illicit trade.

The State Minister noted that the meeting will play a critical role in addressing these issues and ensuring the successful implementation of the Border Trade Protocol Agreement. “This is an opportunity to enhance cooperation, curb illegal activities, and create a more secure and prosperous environment for our people,” she said.

The inaugural meeting of the Joint Border Trade Committee underscores the commitment of Ethiopia and South Sudan to deepening economic ties and fostering regional integration. As the discussions continue, stakeholders are expected to develop actionable strategies to improve cross-border trade, strengthen infrastructure, and promote sustainable development in the border areas.

A new report by global risk advisory firm WTW (Willis Towers Watson) reveals that this dangerous nexus is spreading across the continent, with Ethiopia emerging as a troubling case study. Illegal mining operations, often controlled by armed groups, are fueling instability, undermining economic growth, and threatening the country’s ambitious development plans.

In the war-scarred Tigray region, where a brutal two-year conflict left hundreds of thousands dead and brought mining operations to a standstill, as much as six tons of gold are smuggled out of the country annually by armed factions, according to WTW. This illicit trade not only deprives the Ethiopian government of vital revenue but also perpetuates cycles of violence in regions already struggling to recover. The problem extends beyond Tigray, with areas like Benishangul and Oromia reporting significant discrepancies between official mining outputs and government projections due to rampant illegal extraction.

The challenges are starkly illustrated by the experience of one organization attempting to launch a project. Access to the site was repeatedly blocked by militant violence, interference from regional authorities, and encroachment by illegal miners—a trifecta of obstacles that highlights the complexities of operating in Ethiopia’s contested regions.

Ethiopia’s path to stability and growth is fraught with challenges. The Tigray conflict, which saw rebels march on the capital and brought the region’s economy to a halt, may have officially ended, but the country remains deeply fractured. Today, the most pressing threats to Ethiopia’s long-term stability stem from ongoing clashes between the state and ethnic militias in the Amhara and Oromia regions. These armed groups are not only waging insurgencies but are also driving a surge in kidnap-for-ransom cases, which have repeatedly targeted foreign-owned companies.

Militants are increasingly targeting Ethiopia’s critical infrastructure, including major roadways leading to the port of Djibouti—the country’s primary trade artery. The Oromia region, which encircles the capital, Addis Ababa, has become a particular hotspot for such attacks. For foreign businesses seeking to capitalize on Ethiopia’s push to expand its mining industry, the risks are growing. Companies operating in or near the capital, especially those perceived to have ties to the central government, are increasingly vulnerable to attacks by armed groups, according to WTW.

The Ethiopian Electric Service (EES) has reported losses exceeding ETB 50 million over the past seven months due to widespread crimes targeting its infrastructure. Incidents such as power theft, transformer and cable theft, meter tampering, and damage to power lines have severely disrupted services and strained the institution’s resources. These acts of vandalism and theft have not only caused financial losses but also highlighted the vulnerability of the country’s electrical grid.

In response to these challenges, EES is actively monitoring 163 criminal cases related to these offenses. So far, 11 cases have been resolved, resulting in 13 defendants receiving prison sentences ranging from two months to 10 years, alongside fines of up to ETB 50,000. The institution emphasized that these legal actions are part of a broader effort to deter future crimes and protect critical infrastructure.

At the same time, EES is addressing internal issues, having taken administrative action against 22 executives and employees following allegations of malpractice and corruption. The measures, which included written warnings for three individuals and fines for 19 others, were prompted by customer complaints and an internal review. This dual focus on external crime and internal accountability underscores the institution’s commitment to improving service delivery and restoring public trust.

In addition to tackling theft and misconduct, EES has intensified efforts to recover unpaid utility bills. The institution issued warnings to 368 customers who had defaulted on payments, successfully collecting approximately ETB 127.8 million in outstanding fees.

Missed This Week’s Business & Economic News? We’ve Got You Covered!

Been busy this week and couldn’t keep up with the latest business and economic developments? No worries—we’ve rounded up the biggest headlines for you. From Ethiopia’s push for port access to a record-breaking export surge, here are the key updates shaping the economy.

Ethiopia Eyes Indian Ocean Access as Somalia Opens Talks

In a move that could ease recent tensions, Somalia is considering granting Ethiopia access to a port on the Indian Ocean. Talks between the two nations aim to finalize a framework by June, determining the type of port, location, and costs. The development follows a diplomatic strain earlier this year when Ethiopia struck a deal with Somaliland, prompting opposition from Mogadishu. If successful, the new agreement could offer Ethiopia a critical lifeline for maritime trade.

Ethiopia’s Exports Surge, Crossing $3.84 Billion in Seven Months

Ethiopia’s export earnings have soared past expectations, reaching $3.84 billion in just seven months—an impressive 101% increase compared to last year. Gold, coffee, oilseeds, and livestock have led the charge, fueling optimism for a record-breaking year. Officials now anticipate full-year earnings to exceed $6 billion, nearly doubling the previous total.

Kenya’s Lamu Port Secures Ethiopian Trade, Strengthening Regional Ties

Ethiopia has committed to using Kenya’s Lamu Port for imports, a move expected to boost regional trade and logistics. Kenyan President William Ruto announced plans to position Lamu as a key transshipment hub, further integrating Ethiopia into East Africa’s economic corridors.

Powering Progress: Ethiopia Expands Electricity Access Nationwide

The Ethiopian Electric Utility (EEU) has connected nearly 250,000 new customers to the grid, expanding access to rural and urban areas alike. Key upgrades, including the installation of 2,000 new transformers and repairs across 38,855 km of distribution lines, are set to improve reliability and coverage.

World Bank Grants Ethiopia $60M to Strengthen Climate-Resilient Healthcare

A major funding boost is on the way as Ethiopia secures a $60 million grant from the World Bank to improve healthcare for women and girls in climate-stressed regions. The initiative will focus on digital solutions and resilience-building efforts in drought-prone areas such as Afar, Somali, and Gambella.

Andersen Global Expands into Ethiopia Through ADS Valuation Services

International advisory firm Andersen Global has partnered with ADS Valuation Services in Addis Ababa, strengthening its foothold in Ethiopia’s evolving business environment. The collaboration comes as Ethiopia’s first securities exchange takes shape, driving demand for valuation services.

In a push toward digital transformation, Ethio Telecom has launched seven cloud-based services, including AI-driven enterprise tools, digital livestock tracking, and ERP solutions. These innovations aim to modernize business operations while reducing the need for costly infrastructure investments.

Ethiopia and Russia have taken a significant step in strengthening their economic, scientific, and technical cooperation, with top officials convening in Addis Ababa for the inaugural meeting of the Russia-Ethiopia Intergovernmental Commission. The discussions, led by Russian Minister of Economic Development Maksim Reshetnikov and Ethiopian Minister of Innovation and Technology Belete Molla, focused on expanding bilateral trade and exploring new avenues for collaboration.

Highlighting Ethiopia’s strategic importance as a key African partner, Reshetnikov revealed that trade between the two nations surged by nearly 40% in the first ten months of 2024 compared to the same period the previous year. He underscored the need to identify new market opportunities to sustain this momentum.

Agriculture remains the dominant sector in bilateral trade, accounting for 89% of total exchanges. Russia sees potential in supporting Ethiopia’s agricultural development through expertise in drought mitigation, land reclamation, and the introduction of drought-resistant wheat varieties. Additionally, increasing exports of Russian agricultural machinery, food products, and liquid fertilizers is expected to bolster Ethiopia’s resilience against climate-related challenges.

A landmark achievement of the meeting was the signing of a roadmap for cooperation on the peaceful use of nuclear technology. The agreement outlines key steps for assessing Ethiopia’s nuclear energy potential, developing infrastructure, and training specialists in the sector.

As part of ongoing engagement, Russia has invited Ethiopian representatives to the next session of the commission in Moscow in June 2025, coinciding with an international tourism forum scheduled for June 10-15.

The Intergovernmental Authority on Development (IGAD) has welcomed the renewed diplomatic engagement between Somalia and Ethiopia, marking a significant step forward in the Horn of Africa’s political landscape.

In a statement released this Friday, IGAD expressed its approval of the ongoing diplomatic efforts between the two nations, underscoring the importance of peaceful resolution and enhanced cooperation. This momentous shift follows a year of strained relations, during which both countries navigated a series of challenges. With tensions now eased, the latest round of discussions between Somali and Ethiopian leaders aims to strengthen regional stability and address shared concerns over security, economic development, and cross-border cooperation.

IGAD, which has long played a pivotal role in fostering regional peace and integration, commended the commitment of both governments to finding common ground. The renewed dialogue is seen as a crucial turning point, not just for Somalia and Ethiopia but for the entire East African region. “This engagement is a testament to the power of diplomacy and the will to overcome historical differences,” said an IGAD spokesperson.

The announcement has been met with optimism, as observers believe this diplomatic breakthrough will not only foster better relations between Somalia and Ethiopia but also contribute to broader regional cooperation. IGAD has called on other member states to support this renewed partnership and build upon it for the prosperity and peace of the Horn of Africa.