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Month: February 2025

Birr Takes a Beating as Central Bank Sets Record Highs in Forex Market

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It is official. The formal forex market has the private big five banks — Awash, Abyssinia, Dashen, Wegagen, and Zemen — offering buying rates for a dollar last week that exceeded the “psychological” mark of 125 Br. The average buying rate for the Birr was 125.42 Br, while selling rates averaged 127.93 Br. A regulatory-set two percent spread is seen across most commercial banks.

However, the Birr (the Brewed Buck) reached a historic milestone when the National Bank of Ethiopia (NBE) posted a weighted average of 126.54 Br, an unusual move for a regulatory body perceived as a stabilising force. The Central Bank’s role during last week cannot be overstated. Setting a record-high buying rate not only surpassed all commercial offers but also signalled a possible strategy to influence the forex market’s trajectory. Market watchers believe this aggressive position may be a tactical response to persistent foreign exchange shortages, while others saw it as a deliberate effort to steer market expectations.

The forex market presented a mixed picture in the week beginning February 17, 2025. Most commercial banks maintained the typical two percent spread, but the Central Bank stood out with elevated rates coupled with an unusually narrow spread of 0.68pc. According to analysts, the reduced spread tells an interventionist policy, perhaps relieving liquidity pressures or curbing volatility.

The Birr’s depreciation reflected ongoing strains from limited hard currency availability, higher import bills, and sluggish foreign exchange inflows.

Commercial banks followed a familiar rhythm, with the state-owned Commercial Bank of Ethiopia (CBE) consistently offering the lowest buying rate, at 124 Br to the dollar, consolidating its conservative position. CBE’s recorded role in stabilising the market by providing competitive rates could be targeting and attracting forex inflows. Hijira Bank (HIJ), at the other end of the spectrum, maintained the highest offers, with buying rates peaking at 126.21 Br and selling rates reaching 128.73 Br. Amhara Bank (AMH) was not far behind, posting a selling rate of 128.52 Br.

While most banks stuck to narrow rate differentials, outliers like the CBE and NBE followed divergent tactics. The CBE’s conservative strategy may reflect a bid to shore up reserves, possibly to address government priorities or guarantee critical imports. Yet, the Central Bank’s more aggressive posture has raised questions about the current monetary policy direction and the underlying pressures driving exchange rate decisions.

Over the past week, the widening gap quoted by commercial banks could amplify distortions and encourage parallel market activities, particularly among parties seeking the most advantageous deals. Although the private banks have generally maintained stable spreads, the Central Bank’s unconventional move stood out. With forex in short supply, the evolution of these rates bears watching, as any shift in policy or rate differentials could intensify uncertainty in an already tight market.

Persistent depreciation can weigh on businesses relying on raw material imports and increase the burden of external debt obligations. Market observers caution that if the Brewed Buck’s slide continues, the economic repercussions may extend beyond import prices and consumer costs. Any uptick in parallel trading could erode the effectiveness of official channels, challenging the authorities’ ability to manage liquidity and curb inflation.

Most market watchers agree that the coming weeks will be crucial for gauging the strength of the Central Bank’s current position to restore equilibrium.

Treating Passwords Like Toothbrush, Virtual Schemes Endanger Unsuspecting Public

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I spent a quiet Saturday afternoon at one of my favourite hideaways, La Patisserie Cafe, known for its excellent pastries and coffee. While my car was being washed, I enjoyed a slice of cake and a cup of green tea, making the most of my time by also giving half a dozen pairs to the shoeshine boy.

Time is the one resource that cannot be multiplied, borrowed, or reclaimed. After nearly four and a half decades of life, I have learned the value of using it wisely. That is why I was also reading an intriguing book, The Eleven-Year-Old Man, by Mulugeta Abreham, a veteran of Eritrea’s insurgency in the 1970s.

The book offered a glimpse into a long, drawn-out war that spanned decades and inflicted immeasurable loss of human life, property, and the futures of generations. I was captivated by the story of a thirteen-year-old boy who, amid the brutal encounters between government forces and rebels, ventured into the arid valleys of Sahel. It read like legend, how a child, barely aware of the adult world, became entangled in one of its ugliest realities: war.

Though Mulugeta and I are from different generations and opposing sides of history, his story of a boy caught in the whirlwind of fate was deeply human. Knowing him personally has revealed an inconvenient truth; we have more in common than we think. Having moved to the West in his teens, he retained the values and mannerisms of my early childhood, qualities that are now increasingly rare.

He was humble and respectful, with a sense of humility that reminded me of our parents’ generation. His version of old traditions remained unaltered, frozen in time, untouched by the cultural shifts that swept through the region decades later. It made me nostalgic for the days when people greeted each other with a kiss on the cheek and bowed slightly when passing on the street.

My undivided attention was suddenly interrupted by a call from an unfamiliar number. Unlike some who ignore unknown callers, I always pick up.

How else would one know what concerns them?

The call could bring unexpected good news, or bad, but either way, it is better to be informed. So, as inconvenient as it was to be pulled from my engrossing read, I answered.

A young woman’s voice greeted me, introducing herself as a representative from my bank. She explained that a network upgrade was being implemented for my mobile banking app and mentioned that I had not acted on an SMS alert sent two weeks ago. With the relentless flood of promotional and irrelevant messages in my inbox, it was easy to overlook anything important. I admitted that I had likely dismissed it as just another pointless text, lost in the endless stream of notifications invading my privacy.

She continued, saying that the deadline for upgrading via my branch had passed, and she was calling from the bank’s headquarters. Though it was unclear why an online app upgrade required branch involvement, she quickly reassured me that the process would be conducted remotely. If I could spare five minutes, she would guide me through it.

She asked me to put my phone on speaker so I could have my hands free to log into the mobile app. I quickly replied that I was using my Bluetooth headphones, so we continued. The woman rattled off rapid instructions, making me uneasy. She asked if I had logged in successfully, and I confirmed. As she guided me through the app, I started sensing something was off; the steps felt less like an upgrade and more like a money transfer.

The call was coming from a private number, which seemed suspicious since banks typically use landlines for customer communication. I did not voice my suspicion immediately but played along. As we progressed, it became clear that I was being lured into a fraudulent trap. I abruptly stopped and told her I preferred to complete the process at my bank branch before hanging up.

Fortunately, a branch was nearby and still open. I quickly sipped my green tea, closed my book, and rushed over. Though the bank was closing, the door was still ajar. I managed to catch the deputy branch manager and explained the situation. I shared the caller’s number, which I ironically dubbed “the schemer.”

To my surprise, a text from my bank had arrived at the same time as the call, further complicating things. The branch manager confirmed that the text was legitimate but took a snapshot for further verification. Fraudulent schemes often involve insider help or in-house accomplices, but he assured me that the bank never contacts clients from private mobile numbers.

I provided as many details as possible and left my contact information in case they needed further assistance. He assured me they would investigate and update me on their findings. He also mentioned that many people had been swindled by tech-savvy fraudsters. In one case, someone had lost over 600,000 Br.

Banks have issued alerts warning customers about online apps capable of hacking password systems and stealing large sums of money from unsuspecting victims. A friend of mine recently lost 20,000 Br in a scheme that involved no calls or communication. He reported the case to his bank, but they dismissed it, claiming the transaction appeared to have been made by him.

He only realised the theft when he received text alerts for two successive withdrawals of 10,000 Br each. The bank informed him that the first transaction was made online, while the second was through an ATM in the early hours of the morning, from a location he had never even heard of. When he approached his network provider for further investigation, the trail went cold, leaving his efforts to reclaim the money a futile chase.

Gone are the days when banking relied solely on face-to-face interactions, handshakes, and cash exchanges. Ethiopia remains one of the few conservative countries where physical banknotes are still widely used. Both the public and potential fraudsters are not yet fully sophisticated in digital finance, which has delayed widespread concern. Meanwhile, in places like Austria, legislators are pushing to enshrine the right to use cash, citing privacy concerns and the risks of digital transaction tracking. A similar debate may emerge in Ethiopia, as cash remains essential, especially during network failures. Many have found themselves stranded at petrol stations, unable to pay when digital transactions fail.

As the country’s young, tech-savvy population grows, the older generation, less familiar with IT security, becomes increasingly vulnerable. Unfortunately, even some of the younger generation, on whom the country’s future depends, fall prey to the allure of quick financial gains and digital fraud schemes.

Public awareness is crucial. People must stay vigilant against these evolving threats. Fortunately, advanced technical knowledge is not always necessary, any financial transaction should be approached with caution. If something feels even slightly suspicious, it should be thoroughly verified before proceeding. Lastly, safeguarding passwords is crucial. As the saying goes, treat one’s password like one’s toothbrush, never share it, and change it regularly.

Africa’s Push for a Jubilee to Break Free from Neo-Colonial Grip

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African leaders such as Thomas Sankara and Kwame Nkrumah had warned about external debt becoming a tool of neo-colonial dominance. In the 1980s and 1990s, the International Monetary Fund (IMF) and World Bank’s structural adjustment programs forced African states to slash public spending, privatise industries, and open markets to foreign investors. The resulting austerity weakened public institutions, heightened poverty, and cemented dependence on Western finance.

By the early 2000s, African countries were encouraged to seek sovereign credit ratings and tap private capital markets, sidestepping traditional lenders. But, after the 2008 global financial crisis, investors looking for high yields poured into African sovereign bonds. In the decade from 2010, Africa’s external debt rose by 180pc.

Once economic turbulence hit, credit rating downgrades triggered capital flight. Countries such as Zambia, Ghana, and Ethiopia defaulted and returned to the IMF for restructuring, replaying a familiar cycle of austerity conditions and fresh borrowing. Kenya, Ghana, and Ethiopia are cutting subsidies, raising taxes, and devaluing currencies to secure debt relief. Creditors, including Western institutions and China, continue to demand repayment at rates higher than those offered to wealthier countries.

The African Union’s (AU) recent call for reparations to address centuries of slavery, colonialism, and economic exploitation has reignited a contentious debate. Beyond symbolic gestures, it should be viewed as an urgent measure for a “Debt Jubilee for Africa.” Cancelling the continent’s 1.1 trillion dollars in external debt, built under an unequal global framework, should be less a matter of charity than correcting structural injustice.

In 2024 alone, African governments spent an estimated 89 billion dollars on debt servicing, diverting funds that could have been used for social services and infrastructure development.

Nigeria allocated 96pc of its government revenue to debt repayment two years ago; while Ghana dedicated more than seven percent of its GDP to paying interest on loans. Ethiopia’s debt stock may be lower than that of many of its peers, yet it spent 2.1 billion dollars on debt servicing compared with only 1.9 billion dollars spent to relieve its citizens of poverty.

Critics may argue that cancelling these obligations encourages fiscal irresponsibility. However, much of Africa’s debt arises from coercive or predatory loans, often signed by illegitimate regimes, and routinely repaid through interest without reducing the principal. Today’s financial framework is rooted in exploitative colonial-era practices. After independence, many countries needed loans to rebuild or transform their economies. Former colonial powers and institutions like the IMF granted funding with stiff conditions, including structural adjustments and austerity measures. These conditions often prioritised creditor returns over borrowers’ interests, creating a cycle of heavy borrowing, repeated interest payments, and marginal progress on reducing the principal.

Historical precedent is instructive. In the aftermath of World War II, the United States launched the Marshall Plan, injecting 13 billion dollars — around 150 billion today — into Europe. That move, which included debt relief and substantial investment, fueled industrial revival and built Europe’s middle class. Even defeated powers like Japan and Germany benefited from this arrangement, which boosted postwar U.S. industrial expansion.

Africa’s argument is that its current debts grew from centuries of exploitation rather than a conflict that decimated the region. The pattern – “systemic plunder” – echoes colonial extraction. Debt cancellation forms a core pillar of the AU’s reparations agenda. It is more than compensation for historical crimes but a means to dismantle ongoing mechanisms of inequality.

According to the Committee for the Abolition of Illegitimate Debt, redirecting half of Africa’s debt service could raise GDP growth by two to four percentage points, potentially adding more than two trillion dollars to the continent’s economy over a decade. Consumer spending, currently around 2.1 trillion dollars, could double by 2035. A mere 20pc boost in African imports from the U.S., the EU, and China would channel 50 billion dollars annually to those economies and create an estimated one million new manufacturing and export-related jobs.

Debt relief could also help address the migration crisis. Close to 80pc of migrants traversing the Mediterranean to Europe originate from Africa. Migration pressures grow as the climate crisis intensifies and economic conditions remain strained. Freed from punishing debt, African countries could invest in green energy and sustainable infrastructure, responding to the climate disasters forecast to cost the global economy 100 billion dollars over two decades.

The G20’s Debt Service Suspension Initiative offered some respite but ignored structural flaws. Only four African countries — Cameroon, Cote d’Ivoire, Ethiopia, and Senegal — signed on, while others feared credit-rating downgrades. The hypocrisy in wealthy countries that spent trillions to rescue banks in 2008 is evident in Africa’s case. They call its crisis self-inflicted. Such double standards reveal a broader refusal to acknowledge illegitimate debts.

Debt Jubilee, proponents contend, is overdue. “Hic Rhodus, hic salta!” they insist: comprehensive reparations demand real relief.

Ahmed T. Abdulkadir (ahmedteyib.abdulkadir@addisfortune.net) is a deputy editor-in-chief of Fortune.

Is Humanity Failing to Capitalise on the AI Revolution?

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I was fortunate to participate in the recent AI Action Summit in Paris, where many discussions emphasised the need to steer AI in a more socially beneficial direction. At a time of increasingly loud calls for AI acceleration from Silicon Valley – and now from the US government – the opportunity to focus on what we want from the technology was like a breath of fresh air.

As I noted in one of my speeches, we should start by asking what is valuable and worth amplifying in human societies. What makes us so special, or at least successful in evolutionary terms, is our ability to devise solutions to problems large and small, to try new things, and to find meaning in such efforts. We have a capacity not only to create knowledge, but also to share it. Though the human journey has not always been smooth – our capabilities, machines, and knowledge sometimes cause profound harm – constant inquiry and prolific sharing of information are essential to what we are.

For more than 200,000 years, technology has been central to this story. From the days of stone tools to the present, we have built solutions to our challenges. From oral storytelling and the invention of writing to the printing press and the internet, we have developed new and better ways of sharing knowledge. Within the past 200 years, we have also figured out how to experiment better and more freely, and have communicated this knowledge, too. The scientific process gave us established facts, allowing each generation to build on its predecessors’ advances.

It also underpinned spectacular growth in most countries over the past two centuries. While economic development has created tremendous inequality between and within countries, people almost everywhere today are healthier and more prosperous than they would have been in the 18th Century. AI could invigorate this trend by complementing human skills, talents, and knowledge, improving our decision-making, experimentation, and applications of useful knowledge.

Some may question whether we need AI for this purpose. After all, we already live in an age of information abundance; everything one might want – and much that one does not want – is technically accessible through the internet. But “useful” information is scarce. Good luck finding what is needed to address a specific problem in a particular context, in a timely fashion.

It is relevant practical knowledge, not mere information, that makes factory workers more productive; enables electricians to handle new equipment and perform more sophisticated tasks; helps nurses play a more critical decision-making role in healthcare; and generally allows workers of all skills and backgrounds to fill new and more productive roles.

Properly developed and used AI can make us better, not only by providing “a bicycle for the mind,” but by truly expanding our ability to think and act with greater understanding, independent of coercion or manipulation. Yet, owing to its profound potential, AI also represents one of the gravest threats that humanity has ever faced.

The risk is not only (or even mainly) that superintelligent machines will someday rule over us; it is that AI will undermine our ability to learn, experiment, share knowledge, and derive meaning from our activities. AI will greatly diminish us if it ceaselessly eliminates tasks and jobs; overcentralises information and discourages human inquiry and experiential learning; empower a few companies to rule over our lives; and creates a two-tier society with vast inequalities and status differences. It may even destroy democracy and human civilization as we know it.

I fear this is the direction we are heading in. But nothing is preordained. We can devise better ways to govern our societies, and choose a direction for technology that boosts knowledge acquisition and maximises human flourishing. We can also ensure that AI creates more good jobs and enhanced capabilities for everyone, regardless of their education and income level.

But first, the public should recognise that this socially desirable path is technically feasible. AI will move in a pro-human direction only if technologists, engineers, and executives work together with democratic institutions, and if developers in the United States, Europe, and China listen to the five billion people who live in other parts of the world. We desperately need more thoughtful advice from experts and inspiring leadership from politicians, whose focus should be on incentivising pro-human AI through policy and regulatory frameworks.

But we also need more than regulation. One hopes that European AI companies and researchers can show that there are alternatives to the Silicon Valley model. To achieve this demonstration effect, European society should encourage the more socially beneficial direction of AI and European leaders will need to invest in the necessary digital infrastructure, design regulations that do not discourage investment or drive away talented AI researchers, and create the kind of financing mechanisms that successful startups need to scale up.

Without a robust AI industry of its own, Europe will have little to no influence on the direction of AI globally.

Coffee Diversity in the South, Biopiracy in the North

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The global coffee trade has sharpened the focus on imbalances between producing and consuming countries. More than 90pc of the world’s coffee is grown in the global south, yet consumption remains predominantly a global north preoccupation.

In “The Coffee Paradox: Global Markets, Commodity Trade & The Elusive Promise of Development”, authors Benoit Daviron and Stefano Ponte revealed how a thriving coffee market in consuming countries contrasts with mounting crises in producing regions. They attribute the widening gap between the raw coffee bean price and the final product cost mainly attributed to oligopolistic rent captured by Western-based coffee roasting giants.

Regulatory measures in developed countries often distort trade relationships. A prime example is the European Union’s deforestation regulation (EUDR), which requires seven agricultural products, including coffee, to be certified deforestation-free before entering European markets. Developing countries, which contribute the least to global emissions, often bear the brunt of climate change and such regulations, leaving coffee-exporting countries among the most affected.

A study by the Overseas Development Institute (ODI), a London-based think-tank, exposed this disparity. It found that if Ethiopia’s coffee exports to the EU were halted under the EUDR, the country could lose its largest market. With 30pc of Ethiopian coffee bound for Europe, such a blow could spur an economic downturn, exacerbate poverty, and deepen inequality. Ensuring compliance, exploring alternate markets, and responding to the EUDR’s impact are now crucial to sustaining Ethiopia’s coffee sector.

The coffee industry also struggles with a marketing system deemed uncompetitive and exploitative. Critics charge international trade institutions with perpetuating neo-colonial dynamic that lets foreign companies extract value from developing countries’ resources and knowledge. The term “biopiracy,” coined by Canadian environmentalist Pat Mooney in 1993, refers to the illegal appropriation of biological resources and traditional knowledge through patent rights. Observers argue this occurs when those penalized for deforestation and emissions are also criminalized for safeguarding their resources, while foreign entities profit under the shield of trade rules.

A recent dispute to safeguard the interests of the country illustrates these concerns.

A German coffee buyer, Original Food GmbH, had been sourcing forest coffee from Ethiopia’s Kaffa and Bonga areas. The company allegedly claimed to be the exclusive buyer of coffee from those regions. It patented local names such as “Bonga Red Mountain” and “KaffaLand,” then sued other foreign and Ethiopian buyers of Kaffa coffee, asserting it held a legal permit in Ethiopia to monopolise sales in Europe.

Original Food’s ties with the Kaffa Forest Coffee Farmers Cooperative Union dated back 18 years, with the support of development cooperation agency operating locally, established to secure a stable supply of forest coffee. The company allegedly tried to dominate as a monopsonist buyer in Ethiopia as well as monopolize European sales by cultivating personal ties with cooperative union leaders, sometimes arranging visits abroad for them. Critics say this relationship led some of the cooperative unions’ leaders to prioritise personal interests over those of their members, enabling uncompetitive sales practices and denying many farmers fair compensation.

On January 24, 2025, the Ethiopian Coffee & Tea Authority (ECTA) addressed the dispute in a statement. Working with the Ministry of Foreign Affairs, the Intellectual Property Protection Agency, the Federal Cooperatives Commission, and others, the Authority monitored the legal proceedings to counter Original Food’s monopolistic tactics and improper market behavior. After more than a year of litigation, the case was settled in Germany. After conducting the necessary assessment and providing evidence on the matter, the Authority banned the company from buying coffee in Ethiopia.

Armed with evidence from the Ethiopian government, the defendants successfully challenged Original Food in court, winning an acquittal. The firm’s owner apologized publicly, vowing to adopt more equitable marketing strategies. For Ethiopia, the ruling is a diplomatic success and a display of the Authority’s resolve to safeguard fair market access and protect national economic interests.

Shimelis Araya (PhD) studied agricultural and development economics at the Justus Liebig University (JLU) Giessen, Germany, and works for the Development Bank of Ethiopia (DBE). He can be reached at araya.gedam@gmail.com.

 

Climate Action Demands Global Fraternity

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The existential threat of the climate crisis casts a long shadow over our planet. Its effects are not equally distributed as vulnerable countries, particularly small island developing states (SIDS) like mine, are on the front lines. We should contend with rising sea levels, more frequent and intense extreme weather events, and the destruction of our livelihoods. To address these challenges and strengthen the resilience of our people and systems, many leaders, including me, have had to reshape policies and reconceive the relationship between government and the governed.

While sea-level rise could directly affect 250 million people by the end of this century, it is already a lived reality for tens of millions in low-lying coastal countries and SIDS. Elsewhere, people are plagued by prolonged droughts and fires. These forces are putting our territories, economies, and very existence at risk, and countering them requires not only urgent action, but also a fundamental shift in our global consciousness, a recognition of our shared humanity and intertwined fate. Simply put, this crisis demands global solidarity.

As a 2025 honoree of the Zayed Award for Human Fraternity, I believe that recognising our responsibility to care for one another is an essential element of the climate response and as important as scientific, technological, financial, and diplomatic measures. Just as a family supports its most vulnerable members, so, too, should the global community rally around those countries bearing the brunt of a crisis they did little to create.

The global financial architecture is ill-equipped to address the climate crisis. It was designed for a different era that did not contemplate the interconnectedness of our economies and ecosystems or the dangers of global warming. The Bretton Woods institutions, for example, were established more than 80 years ago to help European economies recover from World War II.

But, the unprecedented scale and urgency of the climate crisis require a new approach to unlock the financing that developing countries need for mitigation and adaptation. The system should be reformed to make sustainable development, climate resilience, and equitable access to finance its top priorities. This is not charity; it is an investment in our collective future. When some people are left to die, all of humanity – present and future – will eventually suffer.

The Bridgetown Initiative, which many vulnerable countries have championed, calls for multilateral development banks to expand their lending capacity and to ensure that their risk-assessment frameworks reflect the realities of climate vulnerability. It also advocates increased concessional finance, recognising that grants and low-interest loans are essential for countries struggling to cope with the climate emergency. The initiative proposes innovative mechanisms like debt-for-nature and debt-for-climate swaps, offering a path to debt relief while generating the financial resources vulnerable countries need to take ownership of their climate transitions and build more resilient economies and societies.

But finance alone is not enough. A paradigm shift is needed in how we understand development, moving from the narrow pursuit of GDP growth to a more holistic approach that values social justice, environmental sustainability, and human well-being. This requires a fundamental rethink of our economic models. Infinite growth on a finite planet is simply not possible. We should embrace a circular economy that improves resource efficiency, minimises waste, and promotes sustainable consumption.

Such a shift ultimately hinges on global fraternity. We have recognise that, in an interconnected world, our actions have consequences for others, and that protecting our planet is a shared responsibility. Equitably distributing the burden of climate change, so those who have contributed the least to the problem do not suffer its worst effects.

Leading a small island country like Barbados has taught me valuable lessons about the power of community and resilience, as well as the importance of long-term vision. We have learned the hard way how to adapt to changing climate conditions and innovate in the face of adversity. We have also realised the value of empowering communities to take ownership of adaptation efforts and nature-based solutions in building resilience.

These lessons, born of necessity, are not unique to Barbados; they can guide all countries, regardless of size or wealth, toward a more sustainable future.

I have often said that the world looks to SIDS for leadership on the climate crisis not because we are rich or powerful, but because we have no choice but to lead. The unavoidable truth is that we can no longer stand alone. Everyone should join the fight to safeguard the planet for generations to come. More than an environmental issue, the climate crisis is a global challenge that demands a collective response.

We cannot afford to be divided by national borders, political ideologies, or economic interests. This is a profound test of our shared humanity, and we will need global solidarity – ordinary people taking action every day – to pass it.

The Increasing Presence of Women in Leadership

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Following the recently concluded 38th AU Summit, I was captivated by the presence of incoming heads of state and officials. Yet, what caught my attention was the Ethiopian women in high-ranking positions, welcoming these dignitaries with authority and grace. A wave of pride washed over me, seeing women not just participating, but leading their country’s representation was profoundly moving. For so long, women have been the quiet architects behind power, the advisors whispering in the ears of leaders rather than holding the microphone themselves.

Some cynics argue that these appointments are mere window dressing, women placed in visible roles for public relations rather than real influence. I cannot say such instances never occur. However, dismissing these steps entirely ignores the undeniable progress in Ethiopia and globally. The very fact that people are now questioning whether women hold real power indicates a shift in societal expectations. Not long ago, such a question would not even have been raised, the implicit, and often explicit, answer would have been “no.”

The appointment of a woman as Ethiopia’s Defense Minister, a traditionally male-dominated field, is an indicator of this change. While people celebrate this achievement, it is crucial to place it in historical context. The country has a legacy of female warriors, women who fought alongside men, demonstrating their strength and leadership for centuries. This appointment is not a radical departure from the past but a reclaiming of a legacy long overshadowed.

Similarly, Ethiopia’s first female president, although a relatively recent one, was an important shift. It shattered a long-standing glass ceiling, proving that women are not only capable but qualified to lead at the highest levels.

Why have not women held more leadership positions in the past?

The answer lies in deeply ingrained societal norms and biases. Patriarchal structures, reinforced by cultural traditions and religious interpretations, have historically relegated women to secondary roles. Implicit biases, subconscious prejudices that shape decisions without conscious awareness, have played a big role. These biases manifest in overlooked promotions, the undermining of women’s contributions, and a persistent belief that leadership is a male domain.

Beyond bias, structural barriers have also limited women’s advancement. The lack of accessible and affordable childcare, combined with societal expectations that women should bear primary family responsibilities, has forced many women to choose between career growth and domestic obligations.

However, the tide is turning. Globally, awareness of gender inequality is growing, and efforts to address it are gaining momentum. Gender quotas, leadership mentorship programs, and workplace equality initiatives are creating real change. Ethiopia is no exception. More women are stepping into powerful positions, and their presence is increasingly visible. It is not just about placing a few women in high office but about building a system where women have equal opportunities, their voices are valued, and their potential is fully realised.

The possibility of a female prime minister in Ethiopia would mark a profound step toward gender equality in leadership.

The under-representation of women in power has tangible consequences for global stability. Research suggests that female leadership styles often focus on negotiation and de-escalation, potentially reducing conflict.

Kidist Yidnekachew is interested in art, human nature and behaviour. She has studied psychology, journalism and communications and can be reached at (kaymina21@gmail.com)

Soaring Rent Crisis Pushes Residents to the Brink

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Addis Abeba is in the grip of a worsening housing crisis. Rent prices have surged to record levels, forcing many residents into financial distress. Even those who manage to secure housing agreements are finding themselves vulnerable to sudden and unlawful rent hikes.

A relative’s experience with a real estate company depicts the growing problem. She agreed to rent an apartment for 60,000 Br per month, paying three months’ advance while waiting for the previous tenant to vacate. However, on the day she and her family were set to move in, the landlady abruptly raised the rent to 85,000 Br, before they had even spent a single night there.

The landlady justified the increase by claiming that property administrators pressured her, arguing she was charging below-market rates compared to other landlords in the area.

This is far from an isolated case. Across Addis Abeba, landlords are disregarding rental agreements, arbitrarily raising prices, sometimes multiple times a year, and leaving tenants with little recourse. Many renters feel powerless to challenge these increases, fearing eviction or retaliation.

Ethiopian law mandates a two-year fixed rental agreement, but weak enforcement and a lack of tenant protections allow property owners to exploit loopholes and impose unsustainable price hikes.

A survey of rental prices across the capital confirms the alarming trend. Four-bedroom apartments in Bole Bulbula are now listed at 100,000 Br per month, while three-bedroom units in Bole, Megenagna, and CMC go for 85,000 Br. Basic villas now cost at least 150,000 Br per month, with even dilapidated old villas in Ayat renting for no less than 60,000 Br.

Government-subsidized four-bedroom condominiums near prime locations, originally built to provide affordable housing, are now being rented for 35,000 to 40,000 Br per month.

These rent prices are completely disconnected from the income levels of most Addis Abeba residents. According to estimates from international organisations such as the World Bank, Ethiopia’s average middle-income salary ranges from 100,000 to 180,000 Br per year, roughly 8,000 to 15,000 Br per month. That means an entire year’s income would not cover even two months’ rent in many areas of the city. Even upper-middle-class professionals earning 25,000 to 30,000 Br per month struggle to afford housing.

Not all landlords are driven by greed. Some are considerate, offering fair prices and even reducing rent when tenants face financial hardships, such as job loss or single-income households. These property owners exemplify social responsibility at its best.

Industry experts point to several factors driving the crisis. Rapid urbanisation and population growth have outpaced the construction of new housing. Government housing projects, such as the condominium programme, have failed to meet demand, forcing more people into an increasingly competitive rental market. The cost of building materials has also surged, leading landlords to raise rents to recover their expenses.

The much-anticipated two-year rent control policy exists in theory but is poorly enforced. With a slow and inefficient legal system, tenants are often discouraged from pursuing legal action against landlords who violate agreements.

Many property owners and managers set rental prices based on demand from expatriates and high-earning businesspeople rather than local affordability. Some landlords are also accused of colluding with brokers to artificially inflate prices.

The unchecked rise in rent is pushing residents to the brink. Families are forced to relocate frequently, disrupting children’s education and increasing transportation costs. Others are downsizing into overcrowded and substandard housing while still paying inflated prices. Some have taken drastic measures, moving back in with parents, sharing housing with relatives, or leaving the city entirely in search of affordable living conditions.

With affordable housing increasingly out of reach, many low-income workers are struggling to secure shelter. If these trends continue, Addis Abeba could face a rise in family homelessness.

Achieving stable and fair rent prices in the capital may seem like a distant dream, but the government, property owners, and the public must work together to address this growing crisis.

A dedicated rent control authority could be a crucial step, ensuring rental agreements are enforced and penalising landlords who violate the two-year contract rule. Quick and accessible legal mechanisms should be in place to allow tenants to challenge unfair rent increases without fear of eviction or retaliation.

The government should promote low-cost housing projects and introduce incentives for private developers to build affordable rental units. Large state-owned land reserves could be allocated for mass housing developments to help narrow the gap.

Real estate agents and brokers should be subject to licensing and strict regulations to prevent price manipulation. A public rental registry could provide transparency on fair market rates. Establishing a tenant rights commission to educate renters about their legal protections and mediate disputes could also ease the burden on courts. Stricter fines for landlords who break rental agreements would help reduce pressure on tenants.

Banks should be allowed to provide low-interest home loans to middle- and low-income workers, expanding homeownership opportunities. The government should also increase low-rent housing options for those earning below a certain threshold, helping struggling families secure stable homes.

While legal and policy interventions are essential, property owners must also recognise their social responsibility. Inflation and economic crises affect landlords as well, but disregarding contracts and imposing unaffordable rent hikes is both unethical and unsustainable.

At a time when life is becoming increasingly expensive for everyone, compassion and fairness must take priority over greed. Housing is not a luxury, it is a basic human right. Communities deserve security and stability in their homes, not the constant fear of eviction and financial ruin.

What Ethiopia Can Do in the Face of Healthcare Crunch as USAID Pulls Plug

Posted on by Yeabkal

Ethiopia has relied on American foreign assistance for decades, receiving between 1.1 billion and two billion dollars annually through the U.S. Agency for International Development (USAID). In 2023 alone, it received about 1.3 billion dollars, making it the largest aid recipient country from Washington, after Ukraine. Although USAID works outside Ethiopia’s public finance system, its contributions have sustained essential services, notably in health and agriculture.

Now, with the Agency’s funding on hold, a crisis looms that threatens to undermine progress across critical sectors. The repercussions are already visible.

The Ministry of Health recently terminated 5,000 USAID-funded health workers, shifting their duties to an overstretched public system. According to reports by Reuters, these contract terminations are underway, further undermining Ethiopia’s capacity to provide crucial services. The cutbacks extend beyond personnel. The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) covers 100pc of Ethiopia’s procurement of viral load and Early Infant Diagnosis reagents. Without this support, HIV treatment and prevention programs face severe disruptions, endangering countless lives.

This abrupt funding halt could stall years of gains in maternal health, child nutrition, and agricultural productivity, all heavily supported by American aid. The freeze may also undermine ongoing immunisation programs and the distribution of mosquito nets, further straining the already burdened healthcare system.

The sudden withdrawal of USAID leaves a substantial funding gap, forcing the government and other donors to scramble for solutions. Historically, non-governmental organisations (NGOs) and donors have plugged the gap, with USAID among the most important. Its departure has laid bare the fragilities in public service financing and heightened calls for reform.

While immediate pressures are sharp, some see an opportunity to recalibrate Ethiopia’s public finance management and shift toward a homegrown funding structure that reduces reliance on external sources.

Under the federal arrangement, sustaining local services is vital. The system requires the federal government to use capital allocations, block grants, and specialised funds, such as funds, to finance programs under the sustainable development goals (SDG). However, much of the federal budget is funnelled into large-scale infrastructure projects, leaving local authorities strapped for cash to meet community-level needs. At the woreda level, education and healthcare often rely on thinly stretched grants and meagre local revenues, which barely cover salaries and running costs.

The shock triggered by USAID’s abrupt exit demands a reexamination of how the government funds essential services. Preserving lifesaving programs, including healthcare, depends on restructuring the funding model to ensure critical resources reach those most in need. Federal authorities still appear best equipped to buy and distribute essential commodities in health, agriculture, and education. Yet, local-level funding mechanisms are equally important to guarantee targeted and efficient service delivery.

One potential blueprint is the newly formed Green Legacy and Degraded Landscape Restoration Special Fund. This entity, approved by Parliament, directs between 0.5pc and one percent of federal revenue to grassroots projects, contingent on performance benchmarks. Adapting a similar formula for core services could boost accountability and help ensure that funds serve communities effectively. Another avenue is performance-based financing, which would reward local officials, including health workers, agricultural experts, and teachers, for meeting service delivery standards. This system could enhance efficiency, ease the burden on federal coffers, and draw from Rwanda’s successful extension worker program, where frontline providers receive strategic incentives to improve outcomes.

Some observers hope that USAID might resume operations, but the prevailing sentiment is that Ethiopia should brace for a future where foreign aid is no longer guaranteed, and learn to thrive on its own terms.

The Uncertainties about USAID’s eventual return, possibly tied to stricter conditions, has the importance and urgency of establishing a self-sufficient framework. Ethiopia should capitalise on this moment as a turning point for reform, forging a more robust model for financing public services. A shift toward localised oversight and funding, backed by federal officials’ guidance, could yield accountability and sustainability, which have proved elusive in the country’s decades-long dependence on foreign support.

 

“. . . a pyromaniac who can’t resist setting fires.”

Posted on by Digital Editor

In a spirited opinion piece Al Jazeera posted, former President Mulatu Teshome (PhD) accused Eritrea’s President Isaias Afewerki of fueling conflict in the Horn of Africa. Mulatu blamed Isaias for stirring tensions once again, even after the Pretoria Peace Agreement ended the two-year civil war, in which Eritrean forces participated as allies to the Ethiopian National Defence Forces.

Sovereign Fund Reviews Mid-Year Performance of Line Companies, Calls for Strategic Improvements

Posted on by Digital Editor

Ethiopian Investment Holdings (EIH) launched its mid-year performance review for its portfolio companies, displaying mixed results for the first half of the fiscal year.

Ethiopian Sugar Industry Group (ESIG) reached 95.3pc of its sales goal, selling 64,190tn of sugar for 6.1 billion Br—a 132pc year-on-year growth—despite capacity and supply issues.

The Ethiopian Petroleum Supply Enterprise (EPSE) met 92pc and 97pc of its purchase and sales targets, respectively, stating it has benefitted from recent digitization efforts. The EIH leaders advised EPSE to monitor subsidies and gradually alleviate pressure on the stabilization fund in line with the recent macroeconomic changes.

The Ethiopian Industrial Inputs Development Enterprise (EIIDE) also excelled, achieving 47pc year-over-year revenue growth and meeting 95pc of planned targets. It successfully sourced 86pc of its strategic procurement targets. EIH officials recommended strengthening supply chain management and diversifying market offerings to enhance efficiency.

Meanwhile, the Educational Materials Production & Distribution Enterprise (EMPDE) secured only 38pc of its revenue target, and 22pc of its planned profit for the period. Also, the Ethiopian Railway Corporation (ERC) saw revenues of 190.4 million Br from construction and other businesses while it battles financial struggles due to foreign debt and project delays. EIH has instructed ERC to prioritize financial audits and resume stalled projects, emphasizing the need for financial restructuring and better risk management.

Digital Pay Uptake Booms Among SMEs, Visa Study Finds

Posted on by Digital Editor

Over 80pc of surveyed small- and medium-sized Enterprises (SMEs) have started accepting digital payments in the last two years, according to a new Visa report titled, ‘Value of Acceptance: Understanding the Digital Payment Landscape in Ethiopia’.

Citing increased convenience, the report indicates reduced fraud risk and improved efficiency as factors in the uptake. A substantial 66pc of these SMEs believe that investing in digital payment technologies will support future business growth. The study, conducted by 4Sight Research & Analytics, is based on face-to-face interviews with 259 SME owners or managers.

The report adds that the momentum is expected to continue, with 92pc of SMEs using digital payments reporting satisfactory support from the government and major institutions, as well as quicker payment processing. This satisfaction is encouraging 64pc of SMEs to consider investing in additional payment technologies. While 59pc of SMEs are neutral about fraud risks, 64pc plan to invest in payment technologies, signalling a market ready for digital economic growth.

Digital payments would boost revenue through a wider customer base, enhance customer satisfaction, and reduce operational risks. It is projected that the transition to a digital economy can generate one to two percent annual GDP growth, with a one percent increase in card usage potentially generating an average 67 billion dollars annual increase in goods and services consumption across 70 countries and territories.