@NBEthiopia – Ethiopian Business Review

Five leading Ethiopian insurance companies, Abay Insurance, Africa Insurance, Ethiopian Insurance Corporation, Nyala Insurance and Oromia Insurance have launched the Agricultural Insurance Consortium of Ethiopia in partnership with Pula Advisors, targeting 3 million farmers in 2026 only. The new platform brings together government institutions, insurers and technology partners in a coordinated effort to protect 12 million smallholder farmers from climate-related risks.

The launch received strong endorsement from key government stakeholders, including Semereta Sewasew, State Minister of Finance for Economic Cooperation, and Belay Tulu, Director of the Insurance Supervision Directorate at the National Bank of Ethiopia, alongside other officials, development partners, and farmer representatives. A major announcement during the event was the commitment to expand index-based insurance coverage to three million farmers by 2026 through joint efforts.

Belay said that the government is frustrated with funding and overseeing “short-lived projects” and stressed that financial inclusion remains a core responsibility of the government.

Despite significant government investments and efforts to expand agricultural insurance through extension services and targeted programs, the sector continues to face three critical challenges: affordability and product design, limited farmer awareness, and underutilization of technology. The Agricultural Insurance Consortium of Ethiopia was launched in light of these major issues. Over recent years, Pula Advisors, in close collaboration with the Agricultural Transformation Institute, regional agriculture bureaus, and key development partners such as World Food Program (WFP) and KfW, has made significant progress in building a more resilient system. Together, they developed effective insurance products, improved distribution channels, and reached nearly one million farmers across multiple regions.

Building on this momentum, the Ministry of Agriculture, supported by UNDP and JICA, established a Rural Financial Services Unit to scale these initiatives nationwide. The newly launched Consortium directly addresses these barriers by uniting insurers, government institutions, and technology partners to develop affordable insurance models, enhance farmer education, and leverage cutting-edge digital tools.

The Consortium has improved affordability by introducing a bundled insurance model linked to the government’s Input Voucher System, significantly lowering premiums through risk pooling and covering over 10 million farmers across more than 200 woredas at a low cost of ETB 200. To raise awareness, it is investing in extensive farmer engagement through training, nationwide roadshows, SMS, IVR messaging, and collaboration with government extension agents to integrate insurance education into existing advisory services.

On the technology front, the Consortium uses Pula Advisors’ advanced digital tools, Mavuno for real-time, AI-powered data collection and PIE for intelligent product design and policy management, supporting efficient, data-driven insurance delivery across members. Additionally, the Consortium promotes collaboration and risk-sharing among insurers, standardizes products, and improves operational efficiency to reduce costs, enhance underwriting accuracy, and build farmer trust, ultimately establishing a modern, inclusive, and resilient agricultural insurance system tailored to farmers’ needs.

“Ethiopia’s insurance sector has limited technical expertise to advance agricultural insurance. We have now partnered with five local insurers who are working together to strengthen agricultural insurance by creating a shared platform,” said Dagmawi Haileyesus, the Country Director for Ethiopia.

As part of today’s event, the consortium launched its first product, “Le-Sebele”-an Area Yield Index Insurance solution. This comprehensive coverage is designed to protect farmers against systemic risks that can lead to reductions in harvests. It covers key perils such as drought, excessive rainfall, pests, and diseases, among others. The model has already been successfully implemented across three regions and over 200 woredas in Ethiopia, demonstrating its effectiveness and scalability in Ethiopia’s diverse agricultural landscape.

Agriculture accounts for one-third of Ethiopia’s GDP and employs 85% of its population, yet over 95% of smallholder farmers lack formal crop insurance. Recurrent droughts and erratic rains force families to sell assets, deplete savings, or rely on aid. The AICE aims to break this cycle by scaling affordable, technology-driven insurance that stabilizes incomes, unlocks credit, and encourages adoption of productivity-enhancing inputs like fertilizers and improved seeds.

Awash Bank has reported strong performance for the 2024/25 fiscal year, marking a year of strong financial performance and grown digital presence. While the bank says 77% of its services are now delivered through digital channels, it also opened 52 new branches, increasing its national network to 989.

This mix of digital growth and physical expansion was shared by the bank’s senior officials during a press briefing held yesterday at the Skylight Hotel in Addis Ababa. CEO Tsehay Shiferaw and his team met with journalists to walk through the numbers, talk about the bank’s direction, and reflect on what has been a busy and productive year.

Despite the digital shift, Awash is showing no signs of stepping back from on-the-ground presence. The bank’s leadership says this approach aims to serve both the growing number of digital-first customers and those who still rely on face-to-face banking across the country.

During the fiscal year, the bank’s total revenue rose to ETB 64 billion, up 77% from the previous year. It also registered over ETB 22 billion in pre-tax profit, supported by growth in customer numbers and loan activities. According to CEO Tsehay Shiferaw, the bank’s performance benefited from aligning its strategy with national economic priorities and focusing on financial inclusion.

More than 3 million new customers joined Awash during the year, pushing its total client base past 15 million. Deposits reached ETB 332 billion, with interest-free banking contributing over ETB 37 billion, or around 11.2% of the total.

Digital banking is clearly becoming central to the bank’s operations. Awash processed over ETB 1 trillion in digital transactions, representing more than 76% of all its transactions. Through its digital lending platform “Awash LeHulum,” over ETB 493 million in loans were extended to more than 301,000 customers, without requiring any collateral.

At the same time, the bank mobilized over USD 2 billion in foreign currency, reflecting a 25% rise from the previous year. It also disbursed loans exceeding ETB 219 billion, a 20% increase, with ETB 16.6 billion going specifically to small and micro businesses. Awash says it reached more than 14,000 borrowers in this segment alone.

With support from the Mastercard Foundation, the bank also delivered ETB 1.3 billion in financing to around 12,000 small enterprises through the MESMER program.

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Ethiopia ranked fifth among African nations importing U.S. goods in 2024, with an import worth of USD 1.016 billion, according to the latest data from the United States Census Bureau.

Ethiopia followed Egypt (USD6.89 billion), South Africa (USD5.8 billion), Morocco (USD5.2 billion), and Nigeria (USD4.1 billion) in total value of imports. It remained one of only six African countries to exceed the USD1 billion mark, ahead of nations such as Algeria and Ghana.

Despite a year-over-year decrease of about USD202.7 million from 2023’s total of USD1.218 billion, Ethiopia’s strong position in the rankings highlights the depth of its commercial ties with the U.S.

While the Census Bureau’s figures do not break down imports by sector, previous trends suggest that Ethiopia’s purchases often include aircraft components, machinery, medical technology, and agricultural equipment goods linked to infrastructure, healthcare, and economic modernization.

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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.

Pula Advisors, an international insurtech company, in partnership with Oromia Insurance S.C. and other local partners, has provided agricultural insurance coverage to 700,000 smallholder farmers as of December 2024. Building on this success, the company aims to reach an additional 3 million farmers by the end of the current fiscal year. This scale-up effort brings together a consortium of local insurers, including Abay Insurance S.C., Africa Insurance S.C., Ethiopian Insurance Company (EIC), Nyala Insurance S.C., and Oromia Insurance S.C.

The announcement was made on Wednesday by Pula’s Ethiopia Country Director, Dagmawi Haileyesus, during the UNDP’s Financial Resilience in Agriculture (FRA) Community of Practice (CoP) 2025 high-level international forum, held at the United Nations Economic Commission for Africa (ECA) headquarters in Addis Ababa. The event brought together over 100 participants from 24 countries.

Held under the theme “Ethiopia’s Two-Decade Pilot Journey: Voices from Partners Implementing Agriculture Insurance”, the forum spotlighted Ethiopia’s evolving landscape in agricultural insurance, highlighting policy gaps, challenges, and future directions.

Solomon Zegeye, Director at Nyala Insurance, pointed out that premium affordability remains a major barrier, particularly for smallholder farmers. “Only large-scale producers can afford current rates,” he noted, adding that without strong policy intervention to enable premium financing, the scale-up of agricultural insurance will remain limited.

Other pressing issues include low awareness among smallholder farmers about the value of insurance, limited distribution channels in rural and remote areas, and the absence of robust policy frameworks to support the sector’s growth.

Also speaking at the forum, Belay Tulu, Director of the Insurance Supervision Directorate at the National Bank of Ethiopia (NBE), shared updates on regulatory reforms under way to address structural bottlenecks.

“We’re working on a new insurance proclamation that expands our mandate beyond supervision to include market development,” said Belay. “Inclusive insurance is broader than microinsurance. It targets unserved populations beyond just the poor.”

Belay added that a Microinsurance Directive is being also drafted to allow member-based institutions, such as cooperatives and community-based groups, to facilitate insurance delivery.

A key highlight of the event was the official launch of the Ethiopia Rural Finance Service Unit (RFSU) under the Ministry of Agriculture. The RFSU announced in the presence of Girma Amente (PhD), Minister of Agriculture and the State Minister of Agriculture, Sofia Kassa is set to play a central role in coordinating and scaling agricultural insurance efforts nationwide, with support from UNDP, JICA, and other development partners, through funding from the Bill & Melinda Gates Foundation.

“The revised Agricultural and Rural Development Policy places strong emphasis on improving access to financial credit for smallholder farmers,” said Dr. Girma. “The government’s focus on the sector has driven inclusive and climate-resilient economic reforms, boosting both production and productivity.”

Pula and its partner insurers are delivering Area Yield Index Insurance (AYII), a comprehensive coverage solution—through the Input Voucher System (IVS). This model links insurance directly to agricultural input purchases, leveraging the existing IVS infrastructure that reaches up to 7 million farmers, in collaboration with the Agricultural Transformation Institute (ATI).

“Pula has long anticipated the establishment of a platform like the RFSU, recognizing the sector’s need for greater coordination. With the RFSU now in place, we are well-positioned to scale our work nationally—with the potential to serve over 7 million farmers across Ethiopia.” said Dagmawi. He also added “We are confident that the RFSU will leverage key learnings from our program and help create an enabling environment that fosters better outcomes for smallholder farmers through expanded, well-coordinated agricultural insurance efforts.”

Pula operates in 20 countries globally, reaching a total of 20+ million farmers. The company entered Ethiopia in November 2022, following the Ministry of Agriculture’s pledge to work with stakeholders to deliver climate risk solutions for Ethiopian farmers and its delegation of responsibility to the Agricultural Transformation Institute (ATI), efforts began to design and pilot a scalable agricultural insurance model.

The Institute of Foreign Affairs (IFA), in collaboration with the Ministry of Foreign Affairs, held a high-level conference on Tuesday at the Sheraton Hotel under the theme “Exploring New Avenues: Economic Diplomacy as a Mainstay of Ethiopian Foreign Policy.”

The forum brought together leading government institutions — including the Ministry of Finance, Ethiopian Securities Exchange, Ethiopian Investment Holdings, Ethiopian Investment Commission, and the Ministry of Foreign Affairs — to discuss how to align foreign policy with Ethiopia’s economic ambitions.

Central to the discussions was the Homegrown Economic Reform Agenda, launched in September 2019, which aims to liberalize and modernize Ethiopia’s economy. Panelists explored how the reform program is positioning the country to better integrate with the global economy and attract quality investments.

In his opening remarks, IFA Executive Director Jafar Bedru stressed the need to shift diplomatic efforts beyond traditional political frameworks. “Our diplomatic engagements must transcend conventional paradigms and adopt a proactive, business-oriented approach — one that prioritizes investment and trade facilitation,” he said.

Ambassador Workalemahu Desta, Political and Economic Diplomacy Advisor, MoFA, acknowledged that while Ethiopia’s economic and business diplomacy is making progress, it still falls short of matching the opportunities created by recent reforms. He noted the growing global demand for competitive investment destinations, emphasizing Ethiopia’s strategic potential.

“Globally, production and labor costs are soaring. Multinational companies are actively seeking low-cost, stable, and business-friendly environments — and Ethiopia is emerging as a top destination,” he said.

Ambassador Workalemahu also underscored Africa’s growing strategic importance, pointing to the African Continental Free Trade Area (AfCFTA) as a transformative platform. “AfCFTA is unlocking a vast market for investors across Ethiopia. Additionally, our membership in BRICS and the New Development Bank enhances our positioning within the evolving global economic order,” he added.

Dr. Tilahun Kassahun, CEO of the Ethiopian Securities Exchange (ESX), highlighted the need to diversify Ethiopia’s financial landscape to sustain economic growth. He emphasized that beyond traditional financing mechanisms, both local and foreign private investors require access to alternative financial instruments such as portfolio investments. He mentioned that amid the launch of the capital market in Ethiopia, the Ministry of Foreign Affairs must attract investments from abroad as the old technical way of investment has changed to easy and Central Securities Depository. “Beyond simply counting how many remittance accounts are opened, a new key performance indicator (KPI) should be how many CSD accounts are created,” he added.

He also revealed that the capital market is expected to integrate with the interbank lending system in the first week of July. Just six months after its launch, the interbank market has already facilitated over ETB 800 billion in transactions, with daily volumes reaching several ETB billion, he reported.

This comes on the heels of the launch of a Diplomatic Guide for the Homegrown Economic Reform Agenda, unveiled on Monday by the Ministry of Foreign Affairs in collaboration with the Ministry of Finance, the Ethiopian Securities Exchange, and Ethiopian Investment Holdings.

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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.

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Ethiopia’s Council of Ministers, in its 46th regular meeting, approved the Medium-Term Macroeconomic and Fiscal Framework for 2026–2030, a key instrument to guide budget planning and policy direction for the coming fiscal years. The framework aims to expand the government’s revenue base, ensure sustainable public expenditure, and support a stable macroeconomic environment.

The approved framework is expected to serve as a foundation for next year’s federal budget, aligning fiscal strategy with broader economic reforms currently underway in the country.

In the same meeting, the Council endorsed two financial agreements signed with international development partners. A $49.55 million loan from the Arab Bank for Economic Development in Africa will support youth employment projects in coordination with agro-industrial parks. A second loan of SDR 45.1 million from the International Development Association (IDA) will be directed toward improving health service delivery for women and girls. Both loans carry favorable conditions, including long grace periods and minimal service fees.

The Council also approved a regulation prepared by the Ministry of Labor and Skills, which sets service fees for foreign employment agencies. The regulation is intended to help the ministry recover operational costs while considering the financial capacity of users. It will take effect upon publication in the Federal Gazette.

Further, the Council discussed and passed a draft proclamation on employment abroad, aimed at ensuring the safety, rights, and dignity of Ethiopian citizens working overseas. It also intends to improve the country’s ability to benefit from foreign employment opportunities. The draft was referred to the House of People’s Representatives for further legislative process.

Lastly, a draft proclamation on plant protection and quarantine was approved and forwarded to the House. The measure aims to strengthen pest control systems, facilitate safe trade in agricultural goods, and ensure compliance with the International Plant Protection Convention.

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Ethiopia has recorded a significant drop in inflation—from 30% to 13%, since adopting a market-based foreign exchange regime for the first time in five decades. The milestone was revealed during the 2025 IMF–World Bank Spring Meetings, where National Bank of Ethiopia (NBE) Governor Mamo Mihretu discussed the government’s sweeping macroeconomic reforms with IMF African Department Director Abebe Aemro Selassie.

The reform package, part of Ethiopia’s Homegrown Economic Reform Program—includes a transition to interest rate-based monetary policy, the cessation of central bank financing of the government, and the introduction of open market operations. According to Mamo, these changes are already bearing fruit.

“We’ve prioritized price stability, strengthened policy transparency, and tripled our foreign currency reserves,” he noted. “For the first time in 50 years, Ethiopia is operating under a market-based forex system.”

The shift comes amid broader efforts to unlock private sector growth, expand access to credit, and enhance the competitiveness of Ethiopian exports. Backed by a $3.4 billion IMF credit facility, the government is also tackling debt vulnerabilities and reforming state-owned enterprises to create a more sustainable and investment-friendly economy.

Analysts suggest the reforms could mark a turning point for Ethiopia’s economic trajectory—positioning it as a more attractive destination for both local and foreign investors.

“Our goal is a stable, job-creating economy anchored in market discipline and inclusive growth,” Mamo emphasized.

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The International Monetary Fund (IMF) is expected to convene this summer to consider the third review of Ethiopia’s USD3.4 billion support program, according to a spokesperson cited by Reuters. The review remains on track with the original schedule, signaling continued confidence in Ethiopia’s reform trajectory despite recent delays in securing a staff-level agreement.

An IMF delegation visited Addis Ababa in mid-April for routine assessments. At the time, Ethiopian authorities anticipated a swift announcement of a staff-level agreement. However, no official update has since been issued, leaving observers awaiting clarity as the Executive Board meeting nears.

If approved in June, the review will unlock a 191.70 million Special Drawing Rights (SDR) tranche—equivalent to about USD265 million—to support the country’s sweeping macroeconomic reform agenda. The disbursement would represent a crucial injection of liquidity as Ethiopia navigates fiscal consolidation, foreign exchange liberalization, and structural adjustments.

The IMF program, agreed upon last July, was a key requirement for Ethiopia’s participation in the G20’s Common Framework for debt restructuring. Since then, the government has secured a preliminary deal with official creditors and is preparing to engage with private bondholders in the coming weeks and months.

Older Posts

Five Ethiopian Insurers Launch Consortium to Protect Millions of Farmers from Climate Risks

Awash Bank Goes Digital with 77% of Services, But Keeps Planting Branches Across the Nation

Ethiopia Among Top Five African Countries Importing U.S. Goods in 2024

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

Pula Advisors Eyes 3 Million Ethiopian Farmers Through its Local Insurance Partnerships

Key Government Institutions Convene to Reinforce Economic Diplomacy as Pillar of Ethiopian Foreign Policy

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

Council of Ministers Approves Five-Year Fiscal Framework to Guide Budget and Reforms

Ethiopia’s Inflation Falls 17 Points to 13% After Adopting Market-Based Forex System

IMF to Review Ethiopia’s USD3.4B Program Despite Staff-Level Delay