@WorldBankAfrica – 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’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 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.

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The Ministry of Agriculture (MoA) of Ethiopia has signed a Memorandum of Understanding (MoU) with Precision Development (PxD), a global non-profit organization specializing in digital agricultural advisory services. The agreement is backed by a USD 3 million grant from the Bill & Melinda Gates Foundation, aimed at accelerating the implementation of Ethiopia’s Digital Agriculture Roadmap (DAR).

The MoU was signed by Dr. Girma Amente, Minister of Agriculture, and Niriksha Shetty, CEO of PxD, in a move that marks a significant milestone in the country’s transition toward tech-enabled agricultural transformation.

Under the agreement, PxD will lead the establishment and operation of a Project Management Unit (PMU) responsible for the coordinated delivery and oversight of the Digital Agriculture Roadmap. The initiative will be implemented over a two-year period, from December 2025 to February 2027, with PxD serving as the executing agency for the project.

The grant from the Gates Foundation will be channeled directly to PxD, enabling the deployment of targeted digital solutions to support smallholder farmers, enhance data-driven policymaking, and improve agricultural productivity across Ethiopia.

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.

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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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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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.

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

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

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

Ethiopia Teams Up with Global NGO to Digitize Farming with USD3M Boost

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

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

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

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