Blog – Page 28 – Ethiopian Business Review

Ethiopia’s trade sector has shown remarkable growth, with foreign trade volumes reaching USD 4.5 billion in just the first eight months of the current fiscal year. This represents a significant leap from the USD 2.6 billion recorded for the entire year in 2010, highlighting the country’s expanding economic footprint.

Trade and Regional Integration Minister Kassahun Gofe (PhD) shared these figures during a stakeholder forum discussing Ethiopia’s draft trade policy. The government has set an ambitious target to surpass USD 6 billion in total trade by the end of the fiscal year, building on current momentum.

A key development in Ethiopia’s trade landscape is the creation of its first comprehensive trade policy framework. For years, the country operated without a formal trade policy, but after extensive efforts, officials have now prepared a draft document to guide future commerce.

The ministry has also been busy implementing structural reforms, including issuing 2.5 million new business licenses to stimulate entrepreneurship. To boost consumer access and commercial activity, authorities have established over 1,300 weekend shopping malls across the country.

In a major push for quality control, Ethiopia has invested ETB 8.2 billion to build a state-of-the-art Quality Assurance Center. This facility will monitor more than 4.5 million tons of imported and exported goods annually, ensuring standards compliance.

Minister Kassahun connected these developments to Ethiopia’s broader macroeconomic reforms and its bid to join the World Trade Organization. He expressed confidence that the new trade policy demonstrates the country’s readiness for WTO membership while aiming to create a more competitive and sustainable trade environment.

The draft trade policy specifically focuses on facilitating regional economic integration, reflecting Ethiopia’s growing role as a commercial hub in East Africa. These collective efforts represent a comprehensive approach to modernizing Ethiopia’s trade ecosystem and positioning the country for greater global economic engagement.

Ethiopia’s mining sector has shattered expectations with a gold export boom in the 2024/2025 fiscal year. Official reports reveal Ethiopia exported 22.5 tons of gold in just eight months – nearly four times its 6-ton target.

This stellar performance positions Ethiopia to potentially join Africa’s top gold exporters. At the current pace, year-end exports could reach 33 tons, significantly boosting foreign currency reserves.

The mining sector has emerged as Ethiopia’s export champion, contributing the lion’s share of USD1.88 billion in total export earnings. However, the sector faces structural challenges, with artisanal miners producing 95% of output through traditional methods.

To address these challenges, the government plans to operationalize small gold processing factories. This move aims to increase production efficiency while formalizing the largely informal sector.

The gold export surge comes at a critical time for Ethiopia’s economy. While the windfall provides immediate relief to forex reserves, long-term success depends on transitioning from artisanal to industrial mining practices.

Minister Habtamu Tegegne presented these findings during a review of the ministry’s eight-month performance. The report highlights both the sector’s potential and the need for sustainable development strategies to maintain growth.

The United States has imposed a 10% tariff on Ethiopian exports as part of President Donald Trump’s latest global trade policies, a move that could have implications for Ethiopia’s export sector.

In a statement from the White House on Wednesday, President Trump justified the sweeping tariff increases—ranging from 10% to 50% on various trading partners—as a strategy to prioritize American economic interests and reduce the country’s trade deficit. Ethiopia was among the nations affected, with exports to the U.S. now facing added costs.

“The United States must protect its economy from unfair trade practices. If other nations impose high tariffs on us, we will respond accordingly,” Trump declared.

He has long advocated for reshaping international trade agreements, claiming that high tariffs imposed by other countries have unfairly subsidised their economies at the expense of the US.

Ethiopia has exported products such as textiles, coffee, and agricultural goods to the U.S. under various trade agreements. The new tariffs could affect the competitiveness of these exports in the American market amid Ethiopia’s suspension from AGOA.

Ethiopia previously benefited from the African Growth and Opportunity Act (AGOA), which provided duty-free access for many products. However, recent policy shifts have changed the trade dynamics between the two nations. With the added tariff, Ethiopian exporters may face increased costs that could impact trade volumes.

The tariff changes come at a time when Ethiopia is seeking to boost exports and attract investment. It remains to be seen how local businesses and policymakers will respond to these trade adjustments.

“Countries such as Kenya, Ghana and Ethiopia with the lowest tariffs of 10% are potential African Winners,” Zemedeneh Negatu, CEO of CBE Capital shared on his social media. “They have a unique opportunity to expand their exports to the U.S. at low tariffs which could make their products more price competitive.”

The new tariffs have prompted reactions from various global stakeholders. The European Union, Japan, and South Korea have raised concerns over the potential impact on global trade and economic stability. Some analysts warn that these measures could lead to inflation in the U.S. and disruptions in supply chains.

“Globalization has entered a new uncharted era and African countries need to prepare,” Zemedeneh Warned

For Ethiopia, the decision adds a new factor to the evolving trade landscape. Businesses may need to evaluate alternative markets or strategies to mitigate potential economic effects.

However, Zemedeneh said that Ethiopia, which has invested hundreds of millions in labor intensive industries for exports such as garments, and competes globally with garment industry heavyweights such as Vietnam and Bangladesh, could price outcompete these two countries which are facing increased U.S. tariffs of 46% and 37% respectively.

The tariff varies across countries. China faces a 34% tariff, while the European Union is subject to 20%. Vietnam is hit with 46%, Taiwan with 32%, and Japan with 24%. India, South Korea, and Thailand face tariffs of 26%, 25%, and 36%, respectively. Switzerland and Indonesia both receive a 32% tariff, while Malaysia is at 24%. Cambodia faces the highest rate at 49%, while the United Kingdom, Brazil, Singapore, Chile, Australia, Turkey, and several other nations, including Ethiopia, are subject to a 10% tariff. Bangladesh is taxed at 37%, while Sri Lanka and Myanmar (Burma) face 44%. Madagascar sees a 47% tariff, Laos 48%, and Lesotho the highest at 50%. Other notable rates include Nigeria at 14%, Côte d’Ivoire at 21%, and Namibia at 21%. Several Middle Eastern and African nations, including Saudi Arabia, Egypt, and Kenya, face a 10% tariff. These tariff adjustments reflect the broader changes in U.S. trade policy under President Trump’s administration.

Ethiopia’s horticulture sector has delivered a robust USD366 million in revenue over the past eight months, reinforcing its position as one of the nation’s top three foreign exchange generators, the Ministry of Agriculture announced.

Speaking at the opening of the 9th Hortiflora Expo at Millennium Hall, Agriculture Minister Girma Amente (PhD) highlighted the sector’s growing economic impact, emphasizing its role in job creation—particularly for women, who make up over 80% of the workforce.

The horticulture industry—spanning flowers, fruits, vegetables, and herbs—has not only boosted exports but also spurred the growth of small, medium, and large enterprises across Ethiopia. However, Minister Girma noted that fruits, vegetables, and herbs remain underutilized in terms of export potential.

With global consumer trends shifting toward healthier diets, the government is implementing policy and sector reforms to attract more private investment and maximize opportunities in high-demand markets.

Organized by the Ethiopian Horticultural Producers and Exporters Association (EHPEA), this year’s expo—under the theme “Horticulture for Sustainable Ethiopia”—brings together ministers, producers, diplomats, and industry stakeholders to explore key challenges and innovations.

✔ USD366M earnings in 8 months – Floriculture leads, but fruits/vegetables untapped.
✔ Women dominate workforce – Over 80% of jobs held by female workers.
✔ Policy reforms underway – Govt. aims to boost private sector participation.
✔ Expo highlights sustainability – Focus on agro-logistics, EU compliance, and green growth.

Last night, the Sheraton Addis’ Lalibela Hall buzzed with energy as high-ranking government officials, banking and fintech CEOs, prominent business leaders, shareholders, and distinguished guests gathered to celebrate the Cooperative Bank of Oromia’s 20th anniversary. The event was a testament to the bank’s remarkable journey, blending lively celebration with reflections on its transformative impact on Ethiopia’s financial sector.

The bank’s remarkable journey traces back to visionary Haile Gebre Lube, widely regarded as the father of Ethiopia’s cooperative movement. Two decades ago, he championed a revolutionary idea: that cooperation represented the most powerful weapon against poverty. His grassroots mobilization effort saw community members contribute up to 100 ETB each, collectively amassing an impressive ETB 750,000 in seed capital.

This people-powered movement formally established a project office in 2002, with cooperative societies forming the majority of initial shareholders. After securing its commercial license in October 2004, the bank commenced operations in March 2005. Today, maintaining its cooperative roots, over 55% of the bank’s ownership remains in the hands of cooperative societies.

Mamo Mihretu praised the institution as one of the nation’s fastest-growing and most innovative financial institutions. “The Cooperative Bank of Oromia exemplifies modern banking through strong leadership, driving financial inclusion while maintaining its cooperative principles,” he stated.

The governor particularly commended the bank’s responsiveness to regulatory guidance and its alignment with national development goals. “The bank’s leadership has demonstrated exceptional commitment to implementing government directives and supporting economic progress,” Mamo noted. “During our transition to a market-based foreign exchange system, which introduced new market dynamics, Cooperative Bank stood out in its swift and effective adoption of these changes.”

With a customer base of 17 million, the bank’s mobile wallet, Coopay e-Birr, has become one of Ethiopia’s top platforms, processing mobile transactions totaling 3 trillion Birr. The bank has empowered over 1.2 million micro, small, and medium enterprises (MSMEs) with its digital, collateral-free loan offerings called Michu, significantly enhancing financial access for entrepreneurs and small businesses. Michu is Ethiopia’s first uncollateralized digital lending product, powered by Kifiya’s Qena, AI-driven digital lending platform developed in partnership with Mastercard Foundation.

“This platform strengthens collaboration between fintechs and traditional banks, representing a breakthrough in unconventional banking solutions for Ethiopia,” said the governor.

CEO Derbe Asfaw highlighted the bank’s role in transforming living standards by integrating advanced technology and digital solutions. Under its leadership, the bank has launched several innovations, including the SACCO-Link application, which enables cooperatives and unions to engage in digital banking, and the first Coop Remit, a blockchain-based money transfer service in Ethiopia.

Financially, the Cooperative Bank of Oromia has seen substantial growth, with total assets now standing at ETB 189.4 billion and deposits reaching ETB 169.45 billion, reflecting a strong ETB 52.3 billion increase in the last nine months. The bank operates 745 branches and employs 15,000 individuals, positioning itself as a key player in Ethiopia’s banking sector.

The bank’s commitment to sustainability is also evident in its expansion of eco-friendly branches, which operate on renewable energy. Throughout its 20th-anniversary celebrations, the bank has focused on social responsibility and community-driven projects under the initiative “Project 20 for 20th Anniversary.”

As it looks to the future, the Cooperative Bank of Oromia remains committed to driving economic development and financial inclusion across Ethiopia, making it a vital institution in the country’s evolving banking landscape.

The Ethiopian Birr has shown signs of strengthening against the US Dollar as the National Bank of Ethiopia (NBE) continues its scheduled foreign exchange auctions. The latest auction, held on April 1, 2025, saw the weighted average exchange rate settle at Birr 131.71 per USD, reflecting a 2.88% appreciation from the Birr 135.62 per USD recorded in the previous auction in February 2025.

The strengthening of the Birr reflects Ethiopia’s improving foreign exchange position, supported by a series of macroeconomic reforms introduced in July 2024. The country has experienced increased foreign currency inflows from exports, remittances, and capital investments. “NBE’s foreign exchange reserves have surged by more than 200% following the transition to a market-driven forex system,” said Governor Mamo Mihretu in his recent statement.

Further supporting the country’s financial outlook, Ethiopia has reached an agreement in principle with its official creditors to restructure USD 8.4 billion in external debt. This restructuring move is expected to ease financial pressures and strengthen Ethiopia’s position in ongoing negotiations with private creditors, including bondholders. The anticipated reduction in debt servicing obligations could create additional fiscal space, further stabilizing the country’s economic environment.

NBE’s shift to bi-weekly foreign exchange auctions is playing a crucial role in stabilizing the market by ensuring a steady supply of forex to the private sector. The reduction in the exchange rate indicates a potential easing of forex pressures, a positive sign for businesses reliant on imports and foreign transactions.

The next auction is scheduled to take place in two weeks, with details to be announced one day prior.

The National Bank of Ethiopia (NBE) successfully conducted its first bi-weekly foreign exchange auction today, marking a key milestone in its ongoing efforts to stabilize the forex market.

According to NBE’s official announcement, the weighted average exchange rate for successful bids settled at Birr 131.7095 per US Dollar, with 12 banks securing foreign exchange allocations.

This auction is part of the central bank’s broader strategy to enhance forex liquidity for the private sector following Ethiopia’s recent macroeconomic reforms. It follows NBE’s decision to launch regular bi-weekly auctions, a move driven by improved forex reserves and increased capital inflows.

The next auction is scheduled to take place in two weeks, with details on the exact date and time to be disclosed one day prior.

By maintaining a structured approach to foreign exchange distribution, the NBE aims to reinforce market confidence while supporting broader economic stability. Market participants will closely monitor upcoming auctions to assess trends in forex availability and pricing.

Ethiopia has secured significant interest from Indian investors to expand its pharmaceutical sector, aiming to transition from import reliance to a key continental producer. This outcome was achieved at the Ethio-India Trade and Business Forum, held at the Skylight Hotel, where Zeleke Temesgen Boru (Ph.D.), Commissioner of the Ethiopian Investment Commission (EIC), outlined the country’s commitment to fostering self-sufficiency and boosting exports as part of its 10-year national development strategy.

The Kilinto Special Economic Zone has played a pivotal role in this transformation, offering tax incentives and exemptions to attract investment in local pharmaceutical production. Dr. Zeleke has invited Indian investors to explore opportunities in pharmaceutical manufacturing, medical equipment production, health infrastructure, and digital health—sectors identified as having substantial growth potential.

India’s Ambassador to Ethiopia, Anil Khmer Rai, has commended Ethiopia’s recent business-friendly policy reforms and urged Indian companies to leverage the favorable investment environment.

The forum has attracted over 80 Indian companies in the pharmaceuticals and medical materials manufacturing sectors, offering a platform for deeper collaboration and investment in Ethiopia’s pharmaceutical market.

The Koka Hydropower Dam is poised to meet its power generation targets for the 2024/2025 fiscal year, according to station manager Morka Haile. The plant is on track to produce 134.9 gigawatt hours (GWh) of electricity, with 119 GWh generated over the first nine months of the year.

Morka highlighted that the current water level in the dam stands at 1586.68 meters above sea level, slightly below the 1587.01 meters recorded during the same period last fiscal year. Despite this minor difference, the water level is sufficient to ensure uninterrupted power generation for the remainder of the year, allowing the station to meet its annual output target.

With 65 years of operation, the Koka Hydropower Station continues to produce an average of 110 GWh annually, consistent with its original design output. Morka credited the station’s operational efficiency to the dedicated efforts of the operation and maintenance department, emphasizing their critical role in sustaining reliable power generation.

The station has also undergone significant improvements over the years, including a major reconstruction of the electromechanical department 25 years ago. Ongoing projects are carefully planned, involving key stakeholders to ensure the safety of the dam and address environmental concerns such as weed control.

Currently, the Koka Hydropower Station operates with three turbines and has a capacity of 43.2 megawatts, contributing significantly to Ethiopia’s energy supply and supporting the country’s development goals.

Ethiopia has signed a landmark agreement with the World Bank, securing a combined USD96.367 million (ETB12.5 billion) in grant and loan funding to advance the country’s education sector. The agreement, aimed at enhancing access to education and improving the quality of learning, was formalized by Finance Minister Ahmed Shide and Mariam Salim, the World Bank’s Director for East Africa.

Under the terms of the deal, USD50 million will be provided as a loan by the International Development Association (IDA), while USD46.367 million will come from the Global Education Partnership Fund. These funds are set to strengthen Ethiopia’s educational framework, particularly in pre-primary and primary education.

Key areas of focus include the capacity building of teachers for grades 1 through 6, the provision of pre-service teacher training aligned with the new curriculum, and support for school leaders, especially female leaders. Additionally, the project aims to create a digitally enabled education system, enhancing learning opportunities across the country.

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Ethiopia’s Foreign Trade Hits USD 4.5 Billion in 8 Months

Ethiopia’s Mining Sector Contributes USD1.88 Billion in Exports, Led by Gold

Ethiopia Faces 10% U.S. Tariff as Trump Escalates Trade Measures

Ethiopia’s Horticulture Sector Generates USD366 Million in Eight Months

From Grassroots to ETB 189B: The Cooperative Bank of Oromia’s 20-Year Journey in Redefining Inclusive Finance

Ethiopian Birr Strengthens Against USD as NBE’s Forex Auctions Stabilize Market

Ethiopia’s Central Bank Concludes First Bi-Weekly FX Auction at ETB 131.71

Indian Investors Eye Ethiopia’s Booming Pharmaceutical Sector

Koka Hydropower Dam Continues to Generate 110 GWh Annually

Ethiopia Secures USD96.3 Million Grant and Loan from the World Bank to Boost Education