@AfDB_Group – Ethiopian Business Review

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In a development that signals a major realignment in Africa’s coffee trade, Uganda has officially surpassed Ethiopia to become the continent’s leading coffee exporter, marking a watershed moment in a market long dominated by Ethiopia’s legacy.

According to the latest figures released at the World of Coffee Geneva 2025 event, Uganda exported a record 47,606.7 tonnes of coffee in May 2025, significantly outpacing Ethiopia’s 43,481 tonnes for the same month. This marks the first time in recent memory that Ethiopia has been outpaced on export volume by a regional competitor.

The data also revealed that Uganda exported 793,445 60kg bags in May alone, a staggering 43.59% increase from the 552,569 bags shipped in May 2024. This performance earned the country USD 243.9 million in a single month, pushing Uganda’s cumulative annual earnings to USD 2.09 billion between June 2024 and May 2025. Over that period, Uganda exported 7.43 million bags, compared to 6.08 million the previous year.

Ethiopia, long celebrated as the birthplace of coffee and Africa’s traditional leader in export volume and quality, finds itself in a more competitive environment than ever before.

Officials from Uganda’s Ministry of Agriculture, Animal Industry and Fisheries credited the achievement to sustained efforts in boosting coffee quality, expanding production, and enhancing value chain coordination.

Back home, Ethiopian industry leaders have responded with calm optimism. Gizaw Worku, General Manager of the Ethiopian Coffee Association, downplayed the significance of the monthly figures in an interview with Sheger FM.

“Uganda becoming Africa’s top coffee exporter for one month does not surprise us,” Gizaw said. “Monthly export volumes can fluctuate for various reasons—including shipment schedules, international demand cycles, and port logistics. Even Brazil, the world’s largest coffee exporter, faces such monthly variations.”

He emphasized that Ethiopia still leads the continent in total annual exports and added: “As of now, Ethiopia remains Africa’s top coffee exporter when looking at the year as a whole. A temporary spike from another country should not be misinterpreted as a long-term shift.”

However, Gizaw acknowledged Uganda’s recent progress: “Uganda is clearly making strides. They’re investing in coffee sector reforms and expanding their reach in global markets. But for Ethiopia, our strength lies in the premium quality and heritage of our Arabica coffee. What matters is how we maintain consistency, build traceability, and adapt to the global market.”

He also cautioned, “If we see a consistent decline in our monthly exports over several consecutive periods, then that’s when we should raise questions. But for now, this is just a market fluctuation.”

Ethiopia remains Africa’s largest coffee producer, responsible for roughly 559,400 tonnes annually, and accounts for about 17% of the global coffee market. Ethiopia ranks fifth globally in coffee production and holds the eighth position worldwide in coffee exports, shipping approximately 3.76 million 60kg bags per year.

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Ethiopia’s Special Economic Zones (SEZs) have secured nearly USD 900 million in new investments in the current fiscal year alone, a leap that signals the zones are active engines of industrial growth.

As reported by the Ethiopian Press Agency, 89% of all developed land and factory shades in the country’s 13 SEZs have been taken up. Bole Lemi and Adama Industrial Parks have reached full occupancy, while Jimma SEZ stands at 90%.

“This level of uptake shows that previously stagnant areas are now attracting serious investment,” said Zemen Junedi, Deputy CEO of Promotion and Marketing at the Industrial Parks Development Corporation (IPDC), in an interview with The Ethiopian Herald. “Most of the newly registered projects are already operational.”

Zemen attributes the turnaround to a set of government-led legal and regulatory reforms—nearly 80 policy frameworks have been revised. The goal: eliminate red tape and boost investor confidence. The results are visible. Just a few years ago, local investor participation in SEZs stood below 5%. That figure now stands at 60%, with Ethiopian firms operating alongside foreign players in zones across the country.

SEZs have also shifted from being purely export-driven to supporting import substitution, especially in textiles, pharmaceuticals, automotive assembly, logistics, and agro-processing. Parks once seen as underutilized are now actively contributing to employment, technology transfer, and foreign exchange generation.

“Zones that were struggling are now alive with factories, warehouses, and local value chains,” Zemen said.

However, recent reports highlight persistent challenges for workers within these zones. Laborers face wages as low as USD26 per month, among the lowest globally. Poor working conditions, including long hours, inadequate occupational safety, and substandard housing, contribute to high turnover rates—sometimes exceeding 10% monthly. Inflation continues to erode workers’ purchasing power, while weak enforcement of labor laws and limited union influence leave many with little protection or recourse.

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Ethiopia has been ranked as the first expensive country to live in Africa, according to new global data from Numbeo, the world’s largest cost of living database. The report titled “Cost of Living Index by Country 2025” shows that, compared to other African countries, people in Ethiopia now spend more money on basic things like food, transportation, and dining.

Ethiopia is ranked 53rd in the world with cost of living index 46.5, higher than any other African country listed. The high cost of groceries is one of the main reasons for Ethiopia’s top ranking. This shows that it is becoming harder for people to afford their weekly shopping, especially for families living on fixed or low incomes.

Ethiopia’s position stands in contrast to other relatively high-ranking African nations on the cost-of-living scale. Botswana, Mozambique, Ivory Coast, Somalia, Cameroon, and Mauritius follow behind, with Zimbabwe trailing these countries.

Although rent in Ethiopia is still relatively low compared to many parts of the world, the combined cost of rent and living expenses remains very high for most people. Eating at restaurants, transportation, and general services are all getting more expensive. The transportation index shows that traveling inside the country, whether for work or personal needs, is more costly than in most other African countries.

These rising costs come during a time of economic change. Over the past year, Ethiopia has made big shifts in its economy such as adjusting its currency system and reducing government spending. While these changes are meant to help in the long term, they are causing short-term pain for many citizens. Prices have gone up, but salaries have not kept pace, which means that many people are struggling to afford the same standard of living they had a year or two ago.

For example, Numbeo estimates that a single person living in Addis Ababa would now need around USD800 per month (excluding rent) to cover basic living costs. A family of four would need more than USD2,700 per month. This is far above what most Ethiopian households actually earn.

This situation is affecting not only families but also small businesses. With fewer people able to spend money, many shops and restaurants are seeing fewer customers. Some companies are cutting jobs or closing down altogether. The pressure is felt most strongly in cities like Addis Ababa, where prices have risen faster than incomes.

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The Addis Ababa City Administration Cabinet has proposed a substantial budget increase for the 2025/2026 fiscal year, submitting a draft budget of ETB 350 billion to the city council, as reported by Fana Media Corporation (FMC). This represents a major expansion compared to the approved ETB 230.39 billion budget for the current 2024/2025 fiscal year.

The current fiscal year’s budget already marked a significant 64% rise from the previous year, with capital expenditures accounting for nearly two-thirds of the total allocation. Priorities included infrastructure development, job creation, housing projects, and poverty alleviation initiatives designed to support the city’s rapidly growing population.

Building on this foundation, the newly proposed budget allocates approximately 249.9 percent of its resources to critical sectors such as sustainable development, infrastructure expansion, poverty reduction, job creation, and subsidies for essential public services. The remaining ETB 100.1 billion is reserved for the city’s regular operational costs, managed with a strong emphasis on fiscal discipline and savings.

In parallel, the cabinet approved revisions to land lease bid prices following recommendations from the Land Development and Administration Bureau. The city’s Communication Bureau explained to the FMC that this adjustment is in response to improved infrastructure within corridor development zones, stable land prices, and future urban expansion requirements.

Ethiopia, in partnership with the African Union, is set to host the Second Africa Climate Summit (ACS2) from September 8–10, 2025, reaffirming its role in advancing continental climate leadership. Held under the theme “Green Talks and Green Actions,” the summit will spotlight Nature-Based Solutions as central to Africa’s climate adaptation and mitigation strategy, with a focus on re-greening the continent and reinforcing African solidarity.

The summit comes at a time when Ethiopia is accelerating its shift toward sustainable development. In a landmark policy shift, the government has enacted a full ban on single-use plastics—modernizing environmental regulations that had remained largely unchanged for nearly two decades. The administration has also introduced a draft proclamation on ecosystem services, proposing the introduction of a fee framework to support conservation and equitable resource management.

Ethiopia’s climate efforts are further anchored by its Green Legacy Initiative, which has seen the planting of more than 32 billion seedlings over the past five years, with an estimated 90% survival rate. The campaign, launched by Prime Minister Abiy Ahmed, has gained international recognition for its scale and emphasis on ecological restoration.

“As Ethiopia launches its Green Legacy season, its preparations reflect a deep commitment to practical climate solutions,” Prime Minister Abiy stated on social media. “The call is clear: invest in nature, scale proven solutions, and embrace a model where ecology drives the economy.”

Preparatory consultations for ACS2 are already underway. In April, Ethiopia’s Minister of Foreign Affairs, Gedion Timothewos, and Minister of Planning and Development, Fitsum Assefa, held discussions with Moses Vilakati, African Union Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Environment. Commissioner Vilakati commended Ethiopia’s proactive stance and its readiness to lead the upcoming continental gathering.

The Africa Climate Summit, first launched in Nairobi in 2023, is becoming a key platform for African nations to articulate homegrown climate solutions, financing models, and regional cooperation frameworks. The first edition culminated in the adoption of the Nairobi Declaration, which called for reforming global climate finance, establishing a carbon tax, and unlocking green investments. Ethiopia’s hosting of the second edition is expected to build momentum around the continent’s climate diplomacy and green transformation agenda.

Ethiopian Airlines has emerged as the leading player in Africa’s cargo aviation sector, now holding 35 percent of the continent’s market share, according to a new report by the African Finance Corporation (AFC). The airline has significantly expanded its annual cargo capacity, growing from 266,000 tons in 2016 to 715,000 tons by 2023.

The AFC report also highlights persistent gaps in intra-African air transport. In regions such as West Africa, European carriers continue to dominate cargo and passenger traffic. Kenyan Airways and Royal Air Maroc, the next closest competitors, together account for only 25 percent of the cargo market, signaling a sharp contrast in competitiveness.

The report commends Ethiopia and Kenya for using their national airlines to strengthen export trade and urges other African countries to adopt similar strategies. Ethiopian Airlines currently operates 16 dedicated cargo aircraft and serves 60 international destinations, with half located within Africa. The airline plans to expand its cargo fleet to 37 aircraft by the year 2035, reinforcing its long-term commitment to the sector.

In addition, the report praises Ethiopia’s advances in digital infrastructure, particularly in the rapid growth of telecom service users and the increasing adoption of digital technologies. These developments are positioning the country as a leader in Africa’s digital transformation.

Despite such progress, the AFC identifies weak infrastructure as a major constraint to the growth and competitiveness of Africa’s aviation sector. Addressing these limitations is seen as critical to unlocking further potential.

The report also identifies other high-potential sectors across the continent. These include mining, agriculture, logistics, and digital infrastructure. Ethiopia is highlighted as the top wheat producer in sub-Saharan Africa, with wheat cultivation rising from 5,000 hectares in 2018 to 650,000 hectares in 2023.

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BitX, a global mining company has signed a Memorandum of Understanding (MoU) with Ethiopia Mining Farm, paving the way for cutting-edge AI-powered mining infrastructure in Ethiopia, according to Street Insider.

The agreement marks a significant milestone in BitX’s African expansion, introducing its flagship Bit-X V2 Accelerator into local mining operations. This AI-driven technology is designed to double mining efficiency without the need for hardware upgrades, offering a more sustainable and cost-effective approach to Bitcoin mining. Ethiopia is seen as a high-potential hub, thanks to its largely untapped energy reserves and increasing momentum in digital transformation.

BitX’s CEO highlighted that the partnership goes beyond efficiency—it aims to foster a more inclusive and decentralized Web3.0 mining model, where access and fairness are prioritized. Ethiopia Mining Farm officials echoed this vision, stating that the integration of BitX’s accelerator will significantly enhance their operational performance and global competitiveness.

According to the MoU, BitX plans to roll out its technology across 20,000 mining machines in Ethiopia by the end of 2025, with ambitions to expand across other African markets. A key part of this initiative is BitX’s Shared Accelerator Program, which allows global participants to invest in decentralized mining via AI-powered contracts, starting at just $100—making it accessible to a broad base of investors, including Ethiopians.

Unlike traditional mining models that depend heavily on hardware or low-cost electricity, BitX’s approach focuses on software optimization and energy efficiency, enabling emerging economies like Ethiopia to participate in the global Bitcoin mining economy without massive capital requirements.

With a proven track record in North America and Central Asia, BitX’s move into Ethiopia underscores a growing shift in global mining strategy, one that champions decentralization, smart technology, and environmental consciousness.

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The African Development Bank Group and the Federal Government of Nigeria have signed a protocol agreement committing USD500 million over 15 years to extend the Nigeria Trust Fund (NTF), providing long-term business continuity and planning certainty through 2040.

This extension comes after multiple previous renewals, reflecting the enduring value and relevance of Nigeria’s partnership with the African Development Bank.

Dr Akinwunmi Adesina, President of the African Development Bank Group said that the commitment will allow the Bank’s ability to expand hybrid capital instruments, increase securitization, and scale up private sector operations. This move is expected to mobilize more private capital for low-income countries. “Nigeria’s decision today proves that Nigeria is always on the right side. The NTF is the largest we have at the African Development Bank, which is part of the Bank. It helps to co-finance operations in many countries, as well as feasibility studies for some other countries.” he added

The agreement also enables deployment of resources from the fund in innovative treasury, structuring, and other transactions, including balance sheet optimization, structured finance, and catalytic risk-sharing solutions.

The Bank and Nigerian authorities are working on new financial products, updating approval processes, and developing a communications strategy to raise visibility for Nigeria’s contributions.

The Nigeria Trust Fund serves as a fully-fledged financial window of the AfDB. Since its creation, the NTF has financed 92 projects in 33 countries. The Fund has played a crucial role in filling financing gaps in high-impact sectors, particularly in the continent’s least developed countries.

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The Trade and Development Bank Group (TDB Group) has been named Africa’s Bank of the Year at the 2025 African Banker Awards, held during the Annual Meetings of the African Development Bank. The honor recognizes TDB’s continued commitment to inclusive finance, service innovation, and its contribution to Africa’s sustainable economic growth.

TDB’s strength lies in its ability to adapt and lead through reform. Despite a rapidly changing financial landscape, the Bank has maintained its development impact by innovating its capital structure—most notably with the introduction of hybrid capital in 2024—and attracting institutional investors aligned with long-term development goals.

The Bank continues to deliver impactful project and trade financing, while also addressing upstream challenges through concessional finance, technical assistance, and development programs. Its work supports critical priorities such as women’s empowerment, youth employment, and responsible investment across African economies.

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Ethiopia is set to receive USD 260 million in fresh funding from the International Monetary Fund (IMF), as part of a broader USD 3.4 billion loan program aimed at supporting economic recovery and ongoing reforms.

This latest installment brings the total IMF support disbursed under the Extended Credit Facility (ECF) to nearly USD 1.85 billion. The fund’s staff and Ethiopian authorities have now reached a staff-level agreement to complete the third review of the program.

The news comes as Ethiopia shows strong signs of macroeconomic improvement. According to the IMF, inflation is cooling down, exports are rising, and international reserves are growing faster than expected.

“Ethiopia’s economic performance has gone beyond expectations,” said Alvaro Piris, head of the IMF team that visited Addis Ababa in April. “The shift to a more flexible exchange rate has gone smoothly, and government efforts to modernize monetary policy, improve tax collection, and reform state-owned enterprises are starting to bear fruit.”

Despite the progress, challenges remain. The gap between official and black market exchange rates has widened again in early 2025. The IMF notes that fees and commissions in the foreign exchange market are still high, making currency access difficult for many businesses.

To fix this, new measures are being rolled out to make the FX market more transparent and efficient. These include easing restrictions, reducing costs, and improving regulation.

The IMF also emphasized the importance of keeping up the reform momentum. Continued discipline in monetary policy, better tax systems, and a stronger private sector are all seen as key to building long-term growth.

The ECF program, approved in July 2024, is designed to help Ethiopia stabilize its economy, support vulnerable communities, and unlock growth by encouraging private investment and reforming outdated financial systems.

Older Posts

Uganda Tops Ethiopia in Monthly Coffee Exports for First Time

Ethiopia’s Special Economic Zones Attract USD900M in a Single Year as Occupancy Hits 89%

Ethiopia Tops Africa’s Cost of Living Index Amid Economic Reform Pressures

Addis Ababa City Plans Major Budget Expansion to Tackle Infrastructure and Poverty

Ethiopia to Host Second Africa Climate Summit in 2025, Championing Nature-Based Solutions

Ethiopian Airlines Controls Over One-Third of Africa’s Cargo Market

BitX Enters Africa via Ethiopia in Major AI-Driven Mining Deal

AfDB Secures USD500 Million from Nigeria to Expand Development Fund Until 2040

TDB Group Named Africa’s Bank of the Year

IMF Staff Back USD260M Disbursement as ‘Ethiopia Exceeds Reform Targets’