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.

The National Bank of Ethiopia (NBE) has announced a full transition to electronic government and NBE securities with the issuance of Directive No. MFAD/001/2025, marking a major step in modernizing the country’s financial markets.

The directive designates the Central Securities Depository (CSD) as the sole official registry for all government securities. Electronic records will now serve as the definitive proof of ownership, replacing paper-based certificates in a shift aimed at improving market efficiency, transparency, and reducing risks.

All existing holders of government securities are required to submit their physical certificates to authorized CSD members — including commercial banks and licensed brokers — for conversion into electronic form. Failure to comply by the specified deadline could result in penalties of up to 5% of the bond’s face value.

Each security will be assigned a unique International Securities Identification Number (ISIN) to streamline clearing processes and facilitate global recognition.

The directive also outlines procedures for handling pledged securities, which will be electronically marked to protect the rights of borrowers and lenders. Securities not tendered within five years will be transferred to a special account administered by the Ministry of Finance.

According to the NBE, this reform is part of Ethiopia’s broader financial sector modernization agenda and is aligned with international standards. It is grounded in the legal framework of the National Bank of Ethiopia Proclamation No. 1359/2025 and the Capital Market Proclamation No. 1248/2021.

CSD member institutions are responsible for facilitating the transition, including document verification, electronic conversion, and record-keeping. The NBE has committed to closely monitoring the rollout and providing regular updates through official channels.

Just four years after entering Ethiopia’s once-closed telecom market, Safaricom Ethiopia says it has reached 10 million active users, measured over the past 90 days. The company announced the milestone at a press briefing held at its headquarters in Addis Ababa this morning, reflecting its fast growth in a sector long dominated by a single state provider.

Wim Vanhelleputte, the company’s CEO, acknowledged the progress but said it is only a stepping stone.

“Ten million active subscribers is not a small achievement,” he said. “But it’s not the final destination either. It’s a benchmark that tells us we’re on the right path, but we still have a long road ahead.”

Safaricom was granted a telecom license in mid-2021, ending Ethiopia’s decades-long monopoly in the sector. Since then, the company has built out a fast-expanding 4G network that it says now covers more than half the population. As of now, over 3,100 network sites have been rolled out across more than 150 towns and cities.

The company reports an average of 31,000 new customers joining daily. Of the 10 million active users, around 7.1 million regularly use mobile data services, an indicator of Ethiopia’s increasing digital appetite. Monthly data consumption per user has grown to 6.5GB, up by more than half compared to last year.

Behind the numbers is a sizable financial outlay. Safaricom Ethiopia says it has invested more than ETB 300 billion (about USD 2.27 billion) in infrastructure and digital financial services over the past four years.

The company directly employs about 900 people, most of whom are Ethiopian nationals. It also estimates that over 20,000 people have found indirect jobs through its operations—selling SIM cards, distributing airtime, or supporting the network build-out.

In addition to its commercial growth, the telecom provider highlighted its community engagements. It has allocated over 100 million birr to schools for laptops, routers, and free internet, and provided assistance to communities affected by natural disasters in regions such as Afar, Gofa, and Ashewa. A 10 million birr donation was also made to the Mekedonia Humanitarian Association.

The company’s next big goal is to reach financial break-even—something the CEO says could happen within the next 6 to 12 months. Doing so would allow shareholder and lender funds to shift toward expansion, rather than operating costs.

Safaricom also has plans to nearly double its network sites to over 6,000 by December 2026, aiming to reach up to 90% of the population. But the company admits the path forward won’t be easy.

Vanhelleputte said the company is currently selling mobile data at prices “three times cheaper” than the continental average below cost. While this has helped attract users, he warned that the model is not sustainable.

“There is an urgent need for price rationalization, not just for Safaricom, but for the telecom sector as a whole,” he said. “If we’re serious about investing further, ETB 500 billion more will be needed across the industry in the coming years—we’ll have to rethink pricing.”

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’s Minister of Trade and Regional Integration, Kassahun Gofe (PhD), is making a steady recovery following a road accident on the evening of 22 June 2025. The Ministry issued a statement today, 30 June 2025, at approximately 6:00 PM EAT, addressing concerns raised by local and international media reports regarding the incident.

The official announcement clarified that the accident took place near Karl Square in Addis Ababa around 7:00 PM on June 22, as the Minister was returning home from work. Dispelling earlier reports of serious injuries, including fractured ribs, the Ministry confirmed that Dr. Kassahun suffered only a minor injury to his leg.

Sources within the Ministry, speaking to EBR, confirmed this information. Dr. Kassahun is reportedly now able to walk with some assistance, showing positive signs of recovery. He is expected to take a short rest before resuming his official duties soon.

Ethiopia’s foreign exchange reserves have tripled over the past year, marking a remarkable turnaround fueled by aggressive monetary tightening, robust export performance, and a sweeping reform of the foreign exchange regime. The development underscores the growing resilience of the country’s external sector, even as the National Bank of Ethiopia (NBE) maintains its cautious stance on inflation and domestic liquidity.

The update follows the third Monetary Policy Committee (MPC) meeting of 2025, held on June 30. While inflationary pressures appear to be easing—headline inflation remained steady at 14.4 percent in April and May, with food inflation down to 12.1 percent from 25.6 percent a year earlier—the NBE made clear that the disinflation process is far from complete. The Committee reaffirmed its commitment to stability, opting to keep the benchmark interest rate unchanged at 15 percent and to extend the 18 percent credit growth ceiling through September.

A key factor behind the central bank’s cautious tone is the elevated cost of living resulting from years of cumulative inflation. Although monthly inflation rates were subdued at just 0.1 and 0.2 percent in the last two months, the MPC stressed the importance of anchoring expectations until single-digit inflation becomes entrenched.

Beneath the surface, however, Ethiopia’s economic indicators reveal signs of structural improvement. Export earnings have surged—led by coffee and gold—while the services sector has shown renewed vitality in tourism and air transport. At the same time, the reform of the exchange rate system introduced in mid-2024 has contributed to better currency price discovery, a slowdown in import growth, and renewed confidence among remitters and capital account investors.

The resulting improvement in the external balance is striking. Ethiopia’s current account deficit has narrowed significantly, while the balance of payments has shifted into a strong surplus. In parallel, the NBE has accumulated substantial foreign exchange reserves, helped in part by gold-related inflows, which are now nearly three times higher than the level recorded a year ago. This external buffer offers the country much-needed stability as it navigates fiscal and monetary transitions.

Domestically, the credit environment remains tightly controlled. Despite signs of growing demand for credit—reflected in broad money growth of 23.3 percent and commercial bank loan stock growth of 18.1 percent—the NBE continues to restrain lending in an effort to avoid reigniting inflationary pressures. Notably, reserve money has grown even faster, yet the cap on lending growth has helped prevent excessive liquidity expansion.

Short-term interest rates have also remained well-anchored. The inter-bank money market rate stood at 17.5 percent in May, comfortably within the NBE’s 15 percent ±3% corridor. Meanwhile, the 91-day Treasury bill yield rose to 17.7 percent—up from 16.1 percent in December 2024—indicating a positive real interest rate environment, critical for maintaining investor confidence and controlling inflation.

In a significant structural shift, the NBE has repealed a 2022 directive requiring commercial banks to purchase treasury bonds, a policy tool once used to support deficit financing. With improved fiscal performance and growing access to concessional and market-based finance, the government is no longer relying on direct central bank support. The MPC welcomed this development, noting it as a step toward more market-driven monetary management.

Looking ahead, the central bank may revise its credit growth controls in September, provided that disinflation trends continue. However, it has pledged to deploy its full range of policy instruments—including open market operations, forex interventions, and adjustments to reserve requirements—to maintain control over inflation and liquidity conditions.

Ethiopian Airlines, Africa’s leading carrier and one of the fastest-growing global airline brands, is pleased to announce the launch of its new twice-weekly cargo flight service between Addis Ababa and Urumqi, China. The inaugural flight was welcomed with a colorful ceremony and traditional water cannon salute upon arrival at Urumqi Diwopu International Airport. The new flight will operate every Monday and Thursday.

This new route strengthens Ethiopian Airlines’ footprint in Western China and enhances the vital cargo corridor between Africa and Asia, enabling faster, more efficient freight movement and broader market access for exporters and importers alike.

Commenting on the launch of the new cargo service Ethiopian Airline GCEO Mesfin Tasew remarked “The launch of our cargo service to Urumqi marks yet another significant step in strengthening our footprint in China and deepening air trade links between Asia and Africa. As a strategic gateway to Western China, Urumqi opens new possibilities for cross-border commerce, supply chain efficiency, and economic integration.

At Ethiopian Airlines, we remain committed to expanding our cargo network with purpose, creating reliable, fast, and seamless logistics that serve as a catalyst for growth across continents. China continues to be one of our most important markets, and this new route reaffirms our long-term partnership and vision for shared prosperity.”

Ethiopian Airlines currently operates over 190 weekly flights to 27 destinations across Asia, including 83 weekly flights to 11 cities in China. With a modern fleet and advanced temperature-controlled, tech-enabled cargo infrastructure, Ethiopian transports nearly 1 million tons of cargo annually across a global network of over 140 destinations.

This new service marks another milestone in Ethiopian’s mission to strengthen Africa–Asia connectivity and further position Addis Ababa as a critical global cargo hub.

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.