Since domestic resources are not large enough to finance various development endeavors, Ethiopia, just like any developing nation is forced to turn to Foreign Direct Investment (FDI). To facilitate the flow of FDI into the country, the government tried to introduce a favorable legal framework in line with constantly changing global dynamics, but without compromising national interest.

Microinsurance is insurance that can be accessed by the low-income segment of the population and small businesses. Despite its business potential and instrumental role in averting social and economic risks, the penetration of microinsurance remains very low in Ethiopia, a country with 80Pct of the population engaged in smallholder, rural, and rain fed agriculture, and where crop and livestock failure is frequent. EBR’s Ashenafi Endale explores why microinsurance could not capitalize on the rising demand and takeoff as a new business front.

Last year, Parliament passed a law forcing financial institutions to accept movable properties like livestock, patents, land operating rights, agricultural products, land ownership rights, warehouse receipts, and intellectual property rights, as collateral. The central bank is betting this will fundamentally change the credit landscape, which is currently highly collateralized and is resulting in bank credit injustice. The new move is expected to expand credit markets and improve access to credit for farmers, micro and small enterprises as well as cooperatives.

Globally, the manufacturing and use of electric vehicles (EVs) is growing as governments increasingly introduce stricter environmental protection directives. However, electric vehicles were not even a topic for discussion in Ethiopia until recently. The trend has shifted quite fast as a number of companies have started to assemble EVs despite the absence of appropriate legal framework to promote and regulate the assembly or manufacturing and use of the vehicles. The situation has left assemblers and users with obstacles. EBR’s Ashenafi Endale explores.

Ethiopia is among developing countries that have achieved fast and sustainable economic growth in the last decade, mostly through massive public led investment. Despite this, the domestic saving rate remains low, relative to the investment rate. As a result, the country is forced to depend on debt to fill the gap. Currently, the gross domestic saving to GDP ratio in Ethiopia is 22.3Pct, with the gross capital formation to GDP ratio at 37Pct. In fact, the gap between saving and investment is now wider than it was 15 years ago. As the government envisions increasing the saving ratio to 30Pct of GDP in the next 10 years, EBR’s Ashenafi Endale explores the reasons for the low domestic saving rate and offers solutions.

The Ethiopian Job Creation Commission along with other research institutions predicted during the onset of the Coronavirus pandemic in Ethiopia that the health problem would end up slashing 1.5 million jobs in a few months. Fast forward a few months and the commission has announced that the governmental goal of creating three million jobs has been achieved. Some experts and citizens interested in the matter have all be surprised by the report. Kiya Ali looks into the matter.

Shortage of cement is one of the identifying characteristics of the Ethiopian economy over the past eight years. Despite completely substituting cement imports by local production, the dynamics of Ethiopia’s cement market have drastically changed since 2018. Cement shortage has become very normal, while unexplained price hikes of the item have shaken the construction industry. Even though the government has taken different administrative measures going as far as price caps, the problem is far from over. EBR’s Ashenafi Endale investigates. 

The liberal free mar-ket economy Ethiopia adopted under the reign of the Ethiopian People’s Revolutionary Demo-cratic Party (EPRDF) has been a start of the growth of the private sector. Under such an economy, major public and private compa-nies (especially those operating in finance) access the bulk of money pumped into the market. Then, this huge money trickles down under small pours to the society at large. As has been evident in cities that have made the transi-tion to metropolitan status, the skyline of Addis has welcomed high rising buildings serving as the headquarters of the elite com-panies in the country.

It has been quite a long time since mobile banking started in Ethiopia. However, its penetration is still very small considering the potential size of the market. With branch expansion taken as the primary goal of banks to expand their services to people in all corners of the country, mobile and agent banking seem to be in the back burner. However, poor banking infrastructure outside of the capital Addis Ababa seems to have raised the relevance of mobile banking in some regions of the country. EBR’s Kiya Ali looks into the expanding mobile banking market in the country.

Ethiopia, along with countries like China and Bangladesh, is one of the fastest growing economies in the world. The second African most populous country achieved a commendable economic trajectory in the last two decades. Although the rate is a subject of debate among scholars and policymakers, the government claims an average of 9.9Pct growth was achieved in the past 10 years. This was corroborated by the various mega construction and other major infrastructural projects implemented during the period. Though this has helped the country achieve the title of ‘African Tiger’, it has piled up the country’s debt, both external and domestic. EBR’s Kiya Ali explores the dangers of domestic debt piles.