Copy-of-White-Minimalist-Economics-Headline-News-Instagram-Post-51.png

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.

 


Copy-of-White-Minimalist-Economics-Headline-News-Instagram-Post-45.png

 

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.


photo_2025-05-22_15-01-08.jpg

A newly released 22-year economic assessment by the Ethiopian Economics Association (EEA) has revealed that Ethiopia’s total public debt has surged to USD 62.5 billion, triggering renewed concerns over fiscal sustainability and the country’s broader economic trajectory. The report, which comprehensively reviews the nation’s economic performance and governance from 2001 to 2023, delivers a stark warning about the consequences of weak macroeconomic management, civil conflict, and slowing growth.

The 2025 edition of the assessment marks a turning point in methodology and depth, employing standardized and rigorous analytical tools to examine sectoral performance with greater consistency than previous editions. According to the findings, Ethiopia’s economic expansion has slowed considerably since 2016. Both gross domestic product (GDP) and GDP per capita have declined, signaling a reversal from the high-growth period of the 2000s and early 2010s. Inflation has accelerated during the same period, eroding purchasing power and weakening macroeconomic stability. Investment activity has also contracted, while the country’s productive capacity, which expanded until 2019, has since plateaued—limiting opportunities to enhance output and improve livelihoods.

The agricultural sector, historically the backbone of Ethiopia’s economy, has seen a steady decline in its share of GDP, particularly after 2004/05, as the service sector gained prominence. Despite its critical importance, fertilizer usage in the country remains far below international standards, and only 7.8 percent of total loans issued over the past two decades have supported agriculture. The consequences of this underinvestment have become evident in the nation’s food security. From 2020 to 2022, more than 21 percent of Ethiopians experienced food insecurity, with rural communities bearing the greatest burden.

The report also paints a grim picture of the manufacturing sector. In 2023, industrial output accounted for only 4.48 percent of GDP—well below the global average of 12.33 percent. Its contribution to employment was equally modest, at just 6.47 percent. Although import substitution efforts have yielded limited results, progress remains constrained by persistent shortages of raw materials and unreliable utility services. The report notes that challenges in electricity and water supply continue to limit productivity.

Ethiopia’s financial sector, described as shallow and underdeveloped, is struggling to support structural transformation. Credit allocation remains skewed toward non-productive areas, with key sectors like agriculture and industry often bypassed. While financial inclusion has improved overall, significant disparities remain between urban and rural populations, as well as between men and women.

On the fiscal side, government revenues have grown by over 200 percent in nominal terms between 2002 and 2022. However, these gains have been offset by rising inflation, which has reduced the real value of public spending. The country’s debt burden now equates to USD 575.6 per capita. With high levels of debt stress and an underperforming export sector, the report urges the government to improve revenue mobilization and expand foreign currency earnings.

Poverty trends also reveal troubling setbacks. Although the poverty rate dropped from 30.9 percent in 2018/19 to 26.1 percent in 2021/22, it remains higher than the 24 percent recorded in 2015/16. The poorest households have experienced the sharpest decline in living standards, worsened by inflation and recurring conflict.

Governance issues are another central concern. Since 2020, the report observes a deterioration in public trust and governance, contributing to increased unpredictability, internal conflict, and weak economic oversight. The erosion of investor confidence, rising unemployment, and stagnation in growth are all linked to prolonged instability and institutional weakness.

To address these challenges, the EEA emphasizes the need for consistent, prudent, and well-coordinated development policies. It advocates for stronger governance systems, renewed efforts to restore investor confidence, and the integration of peace-building initiatives into national development planning. In particular, the report recommends reallocating public spending towards long-term capital investment, broadening the tax base in a non-inflationary manner, and designing more inclusive financial policies.


Copy-of-White-Minimalist-Economics-Headline-News-Instagram-Post-22.png

 

In its ongoing commitment to price and external stability, the National Bank of Ethiopia (NBE) has announced that it will conduct its sixth foreign exchange auction on Thursday, May 22, 2025, offering USD 50 million to participating banks.

This move is part of NBE’s bi-weekly foreign exchange auction framework aimed at supporting a more transparent and market-responsive forex system. Banks are invited to submit bids in line with NBE’s established guidelines, with the settlement set for the end of the auction day.

The announcement follows the previous auction held on May 7, 2025, where the weighted average rate of all successful bids stood at ETB 132.9643 per USD. In that round, 16 banks successfully secured foreign exchange allocations, underscoring robust participation and demand.

By maintaining a consistent auction schedule, the central bank aims to reduce volatility, improve forex access for priority sectors, and enhance monetary policy effectiveness.

The results of the May 22 auction will be disclosed shortly after the bid submission period concludes.

 


upscalemedia-transformed-1280x754.jpeg

 

The Ethiopia Finance Forum 2025 officially kicked off this morning at the Ethiopia Museum of Art and Science, bringing together a diverse array of stakeholders from the financial sector, senior government officials and global industry leaders. The two-day event, hosted by the National Bank of Ethiopia (NBE), is set to feature over 150 financial institutions, policymakers, development partners, and industry leaders.

The opening ceremony was marked by the presence of President Taye Atske Selassie and Mamo Mihretu, Governor of the National Bank of Ethiopia, both of whom underscored the forum’s significance in charting a new course for the country’s financial landscape.

In a historic announcement, Governor Mamo revealed that government borrowing from the National Bank has dropped to zero for the first time in 12 years. He recalled that Ethiopia’s financial sector has faced numerous challenges, including high inflation and severe foreign currency shortages. To address these issues, he said, the country has embarked on a comprehensive macroeconomic reform agenda.

Governor Mamo noted that efforts to realize the macroeconomic reform vision have already yielded results, including easing the foreign currency crunch and laying the groundwork for a stronger private financial sector.

He added that the reform has helped make Ethiopia’s financial system more competitive, market-oriented, and digitized, with improved security and efficiency.

PresidentTaye Atsikaselasi, in his remarks, praised the NBE’s leadership in fostering economic reform and encouraged deeper collaboration between regulators, investors, and citizens to support sustainable financial development. He also recommended three critical need for Ethiopia’s financial sector to broaden its client base and geographic reach, lead the nation’s digital transformation, and promote financial inclusivity to sustain growth.

The Ethiopia Finance Forum 2025 continues tomorrow with breakout sessions, panel discussions, and networking events. Participants are expected to deliberate on fintech innovation, public-private partnerships, ESG finance, and regional financial integration.


1746085807037.jpg

In a decisive move that signals Ethiopia’s growing appetite for foreign investment, the Council of Ministers has approved a draft proclamation that will allow foreigners to own or possess immovable property in the country. The new legislation, discussed during the Council’s 44th regular session, marks a pivotal shift in Ethiopia’s real estate policy, traditionally closed to non-citizens.

Government officials underscored that the framework has been designed to stimulate capital inflows without compromising the land rights of Ethiopian citizens. By establishing a clear legal structure for foreign ownership, authorities aim to unlock large-scale investment in housing development, address the chronic mismatch between housing supply and demand, and create new employment opportunities in construction and related sectors. The draft proclamation, now set to be debated by the House of People’s Representatives, is seen as a cornerstone in Ethiopia’s broader strategy to make its urban landscape more accessible and investor-friendly.

The session also tackled other key resolutions aligned with Ethiopia’s vision for structural transformation. One of the standout decisions was the approval of a regulation to implement the African Continental Free Trade Area (AfCFTA) tariff reduction on goods. Once published in the Federal Gazette, the regulation—set to be enforced within a month—will facilitate freer trade among African nations by cutting tariffs that often hinder intra-continental commerce. The Council emphasized that this measure is crucial for accelerating regional economic integration, expanding market linkages, and strengthening Ethiopia’s role in Africa’s evolving value chains.

The Council also ratified Ethiopia’s move to join the African Finance Corporation (AFC), an institution that offers financial and technical assistance to both public and private sector projects across the continent. Membership in the AFC is expected to unlock new funding avenues for critical infrastructure and industrial development, sectors considered vital for long-term economic resilience.

Meanwhile, two interest-free financial assistance agreements—one with the Government of Italy and the other with the International Development Association—were also endorsed. These agreements will support the country’s environmental and green economy initiatives, as well as transformative reforms in the education sector. Officials noted that both loans are in full alignment with Ethiopia’s debt sustainability framework and offer generous grace and repayment periods.

To improve institutional efficiency and customer satisfaction, the Council further discussed and approved new regulations on service fees for the Ministry of Transport and Logistics and the Civil Society Organizations Authority. The changes are intended to reflect the cost of service provision while remaining sensitive to public affordability.

Wrapping up the session, the Council approved a draft proclamation to ratify the bilateral air transport agreement signed with Austria. The pact is expected to strengthen diplomatic and commercial ties, broaden market opportunities for Ethiopian Airlines, and contribute to tourism, foreign investment, and job creation.




Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.



2Q69+2MM, Jomo Kenyatta St, Addis Ababa

Tsehay Messay Building

Contact Us

+251 961 41 41 41

EBR
x