NBE Audit Reveals Soaring Money Supply and Growing Fiscal Pressures

The National Bank of Ethiopia (NBE) has published its latest annual financial disclosure, verified by an independent auditor, offering a detailed look into the country’s monetary trajectory over the past five years. The findings point to a dramatic 200 percent increase in money supply, raising concerns over inflation and macroeconomic stability.

One of the report’s key revelations is the NBE’s provision of ETB 700 billion in direct advances to the Ministry of Finance between 2019 and 2024. The volume of cash circulating in Ethiopia’s economy has more than doubled, climbing from around ETB trillion five years ago to ETB 2.7 trillion by the end of the last fiscal year in June 2024. This surge has fueled macroeconomic imbalances, prompting renewed calls for policy reform and tighter fiscal discipline.

Encouragingly, the current fiscal year marks a turning point. For the first time in recent years, the federal government has refrained from taking direct loans from the National Bank. The central bank has also implemented corrective measures to absorb excess liquidity, a move seen as part of a broader macroeconomic stabilization effort.