@AfricanDevelopmentBank – Ethiopian Business Review

Gadaa Bank has officially listed its shares on the Ethiopian Securities Exchange (ESX), becoming the second company to join the exchange’s main board, after Wegagen Bank made its debut.

The listing follows the Ethiopian Capital Market Authority’s (ECMA) approval of the bank’s prospectus on June 17, 2025, marking a key milestone for both the two-year-old bank and the ESX, which is yet to commence active trading.

The two-year-old bank, notable for its large and growing shareholder base of over 28,000 investors, listed 1.23 million ordinary shares at a par value of ETB 1,000 each, valuing the institution at ETB 1.23 billion (approximately USD 9 million). This achievement is especially remarkable given Gadaa Bank’s relatively short operational history, marking it as the first in its peer group to reach such a milestone.

The listing fully complies with Capital Market Proclamation No. 1248/2021 and the Public Offer and Trading of Securities Directive No. 1030/2024, underscoring the bank’s commitment to regulatory standards and transparency. The listing includes existing ordinary shares held by shareholders and reflects Gadaa Bank’s pioneering role as an early adopter of Ethiopia’s nascent capital markets.

A ceremony at the ESX headquarters brought together key stakeholders including government officials, financial experts, and members of the media to witness the occasion.

Speaking at the event, Wolde Bulto, CEO of Gadaa Bank, emphasized the importance of the listing:
“The listing will create liquidity for our shareholders and unlock new opportunities for capital formation. This will allow us to expand our reach and introduce innovative financial products and services that genuinely address the diverse needs of our customers.”

Dr. Hassen Hussien, Chairperson of Gadaa Bank, reaffirmed the bank’s vision:
“As a new player in the banking industry, we are committed to building a strong foundation based on trust and transparency. Being listed on the Ethiopian Securities Exchange reaffirms our dedication to transparency, growth, and public participation in our journey. We believe this will enhance our financial capacity, strengthen corporate governance, and improve our trust and credibility in the market.”

Dr. Tilahun E. Kassahun, CEO of the Ethiopian Securities Exchange (ESX), praised the development:
“Today marks yet another proud moment for Ethiopia’s capital market. Gadaa Bank’s listing demonstrates the growing confidence in our Exchange and the value of public markets in driving inclusive economic growth. We commend Gadaa Bank for its leadership and commitment, and we look forward to supporting more institutions in accessing capital, deepening market participation, and building long-term value for the Ethiopian people.”

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Ethiopia is projected to lose approximately USD 5 million in customs revenue during the first year of implementing the African Continental Free Trade Area (AfCFTA) agreement, according to the Ethiopian Policy Studies Institute.

The projection was disclosed as part of the finalization of Ethiopia’s National AfCFTA Implementation Strategy, which outlines the country’s roadmap for integrating into the continent-wide free trade pact. The strategy was officially launched during a public consultation forum held in Addis Ababa on June 20, 2025.

The high-level event brought together senior government officials, private sector leaders, and development partners. Among the key attendees were Dr. Kassahun Goffe, Minister of Trade and Regional Integration; Yasmin Wohabrebi, State Minister for Trade and Regional Integration; and Dr. Abebe Ambachew, Senior Researcher at the Policy Studies Institute.

According to Dr. Abebe Ambachew, Senior Researcher at the Policy Studies Institute, the estimated revenue loss over a 13-year period could reach USD 83.3 million, with USD 5 million expected in the first year alone. He added that customs duties currently account for about 25.6% of Ethiopia’s total government revenue from imports.

“Given that most of Ethiopia’s trade occurs with non-African countries, the impact of AfCFTA-related tariff losses may not be as severe in the short term,” said Dr. Abebe. “However, the country must take steps to diversify revenue sources and strengthen its export base.”

Speaking at the launch of the ECOTRADE Project, Dr. Kassahun also emphasized Ethiopia’s limited experience in duty-free trade frameworks.

“We have primarily operated within a tax-based trade system and lack practical exposure to free trade. This transition will have direct implications for our customs operations and logistics systems,” he stated.

He further highlighted structural barriers beyond tariff-related issues, pointing to regional connectivity constraints. “Although Ethiopia’s aviation sector ranks first in Africa, it still cannot be effectively utilized for large-scale continental trade,” he added.

The African Continental Free Trade Area (AfCFTA) was signed on March 21, 2018, in Kigali, Rwanda, and officially entered into force on May 30, 2019, after reaching the required number of ratifications. Ethiopia ratified the agreement in 2019 but has yet to fully liberalize its tariffs or participate in the AfCFTA’s Guided Trade Initiative.

Current trade figures show that only 14% of Ethiopia’s exports are destined for African markets, while just 9.6% of imports originate from the continent. This indicates a limited level of trade integration with African partners and suggests that Ethiopia’s gains from AfCFTA may take time to materialize.

To mitigate the projected revenue gap, experts at the forum emphasized the need to expand alternative tax mechanisms and boost export performance, particularly in value-added sectors. Dr. Abebe noted that Ethiopia’s export and import volumes have both shown moderate growth over the past decade, presenting a potential foundation for greater regional trade integration.

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Ethiopia recorded a significant rebound in foreign direct investment (FDI) in 2024, attracting approximately US USD3.98 billion, a 21.9% increase compared to the previous year, according to the latest United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2025.

This growth positions Ethiopia as the leading FDI recipient in East Africa, a region that collectively attracted around USD8.5 billion in 2024, marking modest growth despite a challenging global environment characterized by an 11% decline in worldwide FDI flows.

Neighboring countries contributed to this regional investment landscape with Kenya drawing an estimated USD2.5 billion in FDI, Tanzania about USD1.1 billion, Uganda approximately USD0.7 billion, and Rwanda close to USD0.2 billion. These inflows reflect steady investor interest across sectors such as fintech, manufacturing, infrastructure, renewable energy, agribusiness, and technology.

Ethiopia’s surge is driven by reforms and investments targeting telecommunications, renewable energy, agribusiness, and logistics, marking a recovery after subdued inflows following its 2016/17 peak of USD4.12 billion.

The East African region showed resilience, with greenfield projects increasing by 32% and international project finance deals rising 38%, signaling confidence in new investments despite global FDI contractions.

Regional integration initiatives such as the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA) remain vital in enhancing investment flows and fostering economic diversification across the region.

In a further boost to Ethiopia’s regional economic engagement, the Ministry of Trade and Regional Integration (MoTRI) recently convened a high-level validation workshop on the country’s National AfCFTA Implementation Strategy. The event brought together policymakers, private sector representatives, development partners, and trade experts to review the final draft of the strategy designed to guide Ethiopia’s active participation in the landmark continental trade agreement.

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Ethiopia’s Council of Ministers has approved a draft proclamation that will allow private companies, non-governmental organizations, cooperatives, and professional associations to participate in agricultural extension services. Historically, these services were solely provided by the government, but growing demand and evolving sector challenges have underscored the need for a more inclusive and multi-stakeholder approach.

The Council of Ministers convened virtually for its 45th regular meeting today, where it unanimously approved the draft proclamation. The document is now set to be forwarded to the House of People’s Representatives for further legislative review. This marks a significant step in reshaping key sectors of Ethiopia’s economy.

Alongside this, the Council also endorsed a draft proclamation aimed at establishing a consistent legal framework for ecosystem service fees. Previously, the lack of clear legislation led to fragmented and inconsistent implementation by various institutions. The new legal framework seeks to clarify the roles of federal and regional authorities, the private sector, and NGOs, promoting sustainable environmental management vital for Ethiopia’s development goals.

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The National Bank of Ethiopia (NBE) has introduced a new round of regulatory reforms aimed at easing access to hard currency and aligning market practices with international standards.

The central bank has capped all bank-related foreign currency transaction fees at 4%, effective May 26, 2025, and will require banks to publicly disclose FX-related charges starting next month. This measure is designed to promote transparency, rein in non-standard pricing practices, and protect businesses and individuals navigating the increasingly active FX market.

At the same time, NBE has lifted the long-standing import advance payment ceiling from USD 5,000 to USD 50,000 per transaction—a step aimed at relieving one of the most persistent bottlenecks faced by importers. The updated threshold reflects what the NBE describes as a necessary adjustment, considering how long the previous limit had been in place and the evolving nature of global trade norms.

The foreign exchange regulator has also revised the rules governing how much travelers can take abroad. Under the new guidelines, personal travelers will be permitted to purchase up to USD 10,000, while business travelers may access up to USD 15,000. Additionally, individuals holding foreign exchange accounts will now be allowed to spend up to 20% of their balance via debit card—doubling the previous 10% ceiling.

These changes follow nearly a year of progressive liberalization, launched in July 2024 when the NBE unveiled a more market-based exchange rate regime. Since then, the central bank reports that goods exports have more than doubled, while service exports, remittances, and both official and private capital inflows have shown marked improvement.

As a result, the country’s foreign currency reserves have reached record highs, with increased FX availability enabling firms to secure vital inputs and expand operations. Bi-weekly FX auctions, another cornerstone of the reform effort, have added liquidity to the banking system and contributed to narrowing the gap between official and parallel market rates.

The latest measures, according to NBE, are a direct response to the positive feedback loop generated by these reforms and are intended to further normalize the foreign exchange environment. By enforcing fairer pricing, relaxing outdated limitations, and encouraging transparent financial intermediation, the central bank aims to strengthen trust in Ethiopia’s FX system—one that remains critical to sustaining business confidence, investor participation, and broader macroeconomic recovery.

While challenges remain, NBE’s phased approach suggests a careful calibration between regulatory oversight and market flexibility, with a clear shift away from rigid controls that have long characterized the foreign currency regime.

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Ethiopian Investment Holdings (EIH) has appointed three distinguished leaders to its Board of Directors: Dr. Fitsum Assefa, Minister of Planning and Development; Hanna Arayaselassie, Minister of Justice; and Dr. Zeleke Temesgen, Commissioner of the Ethiopian Investment Commission (EIC).

Their collective experience is poised to drive forward Ethiopia’s ambitious agenda of strategic investments and dynamic portfolio management—key pillars for sustainable economic growth.

As EIH continues to play a pivotal role in shaping the country’s investment landscape, the inclusion of these influential figures will enhance its capacity to mobilize resources, foster innovation, and unlock new opportunities that align with Ethiopia’s long-term development goals.

Ethiopian Airlines anticipates achieving one trillion ETB ($8 billion) in annual revenue by June 2025, marking a significant milestone in its growth. Group CEO Mesfin Tasew shared this ambitious projection during an interview with BBC News. The airline planned a revenue of $10 billion in 2025, when it crafted its strategic 15-year plan. However, the outbreak of COVID affected the airlines’ revenue as global restrictions on travel affected airlines tremendously.

As part of its expansion, Ethiopian Airlines is making significant strides in the global aviation industry with its plans for a new mega airport in Bishouftu, 43km southeast of Addis Ababa. This airport, to be developed in two phases, will have a transformative impact. Phase One, with a capacity to handle 60 million passengers per year, is set to commence in November this year and be completed by 2029. The second phase, adding another 50 million passenger capacity, will follow shortly thereafter. The new airport, built on 3,500 hectares of land, will make the biggest airport in Afric, symbolising Ethiopia’s leading position in aviation. To ensure the well-being of those affected by the relocation, the airline is constructing residential homes, agro-processing hubs, and trade facilities, ready for the families by November 2025. This new facility will address the growing demand, as Addis Ababa Bole International Airport, despite continuous expansions, has reached its limit of 25 million passengers per year.

This massive infrastructure project directly responds to the increasing number of passengers Ethiopian Airlines serves, both within Africa and globally. In 2024, a report by the African Airlines Association ranked Addis Ababa Bole Airport as the third-busiest airport in Africa, trailing only Cairo and Johannesburg.

The Ethiopian Investment Commission (EIC), in collaboration with the Ministry of Finance (MoF) and the Development Partners Group, is gearing up to host the 3rd edition of the Invest Ethiopia 2025: High-Level Business Forum, slated for May 12-13, 2025, at the Skylight Hotel in Addis Ababa. This prestigious event will bring together an impressive mix of 700 global investors, business leaders, policymakers, and entrepreneurs, offering a dynamic platform to explore Ethiopia’s untapped investment opportunities.

During a press conference unveiling the event, Dr. Zeleke Temesgen Boru, Commissioner of the EIC, alongside Semereta Sewasew, State Minister of Finance, Dr. Léandre Bassolé, Deputy Director General for the East African Region at AfDB, and Ashley Mulroney, the Canadian Embassy’s Representative, reinforced the forum’s significance in setting the stage for future investment flows into Ethiopia. Aimed at catalyzing the country’s economic growth, the forum is expected to attract USD 3 billion in investment over the next few years.

The forum is not just a platform for dialogue but a robust opportunity for business leaders to dive deep into Ethiopia’s evolving investment climate. As Dr. Zeleke emphasized, Ethiopia’s strategic geographic location, coupled with its affordable and reliable electricity, positions the country as an attractive destination for foreign direct investment (FDI). “Ethiopia offers investors unparalleled access to regional and global markets, with proximity to the Middle East and other key trade hubs,” he remarked. “Furthermore, the government’s commitment to providing tax incentives and fostering a business-friendly environment makes it an ideal location for long-term investments.”

The forum also seeks to showcase the government’s commitment to fostering a private-sector-driven economy. Over the past few years, Ethiopia has actively worked to create an environment that is both conducive to investment and supportive of entrepreneurship. The strategic reforms implemented to date are now set to serve as the backbone for attracting further capital.

The previous Invest in Ethiopia Forum in April 2023 saw an impressive turnout of 750 foreign investors, with an estimated USD 1.6 billion in investment commitments. These engagements helped Ethiopia secure a USD 3.9 billion FDI influx in the 2023-2024 fiscal year.

Ashley Mulroney, representing the Development Partners Group, highlighted the importance of collaboration between the government, private sector, and development partners in Ethiopia’s investment ecosystem. She noted that while global economic challenges like inflation and trade disruptions continue to affect emerging markets, Ethiopia’s macroeconomic stabilization efforts and structural reforms are proving resilient.

She emphasized the need for investment to focus on inclusive growth, with particular attention to youth, women, and underserved communities. This commitment to fostering inclusive development is crucial as Ethiopia looks to tap into its demographic dividend and address the needs of its rapidly growing population.

The expansion into sectors like telecom, banking, and logistics is another critical focus of the forum. Ethiopia’s recent shift to a market-based exchange rate system has been instrumental in creating a more competitive environment for international investors. Dr. Léandre Bassolé, Deputy Director General for the East African Region at AfDB, stressed that Ethiopia’s opening up of key sectors signals a serious commitment to market liberalization and private-sector involvement. “The government’s macroeconomic reforms and efforts to liberalize essential sectors such as telecom and banking show Ethiopia’s dedication to building a modern, open economy,” Dr. Bassolé remarked.

Ethiopia’s investment journey has been significantly shaped by China’s increasing role in its development, with over 4,500 Chinese-led projects currently operating in the country. However, despite the significant strides made in promoting investment, security challenges continue to pose risks to Ethiopia’s business environment. The ongoing instability in certain regions, coupled with disruptions in supply chains, is affecting investor confidence and escalating operational costs. Dr. Zeleke acknowledged these challenges, urging a balanced perspective on the situation. “While peace is crucial for investment, the perception of instability often outweighs the reality. We must work together to ensure stability, both on the ground and in the global perception,” he said.

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.

Older Posts

Gadaa Bank Joins Ethiopia’s Budding Stock Exchange, Becomes Second Firm to List

Ethiopia Anticipates USD5 Million Customs Revenue Loss in AfCFTA’s First Year

Ethiopia’s FDI Surges Nearly 22% to USD4 Billion in 2024, Leading East Africa’s Investment Recovery

Ethiopia Set to Open Agricultural Extension Services to Private Sector and NGOs

NBE Caps Forex Fees at 4%, Raises Import Advance Limit to USD50,000

Ethiopian Investment Holdings Appoints Three Senior Leaders to Board

Ethiopian Airlines Eyes Over Trillion ETB in Revenue by June 2025

Invest In Ethiopia 2025 Forum to Drive USD 3 Billion in FDI

Koka Hydropower Dam Continues to Generate 110 GWh Annually

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