Barley Supply Chains Sway Under Regional Strains

Posted on March 30, 2025April 5, 2025 by Digital Editor

The brewing industry faces a storm, with barley shortages leading to a substantial spike in prices, a scenario that has prompted alarm among industrial leaders.

Barley is a fundamental ingredient in beer production, and with prices soaring from 3,000 to 9,000 Br a quintal, breweries confront hefty costs and supply disruptions. The Ethiopian Beer Producing Industrial Sectoral Association has reached out to the Ministry of Industry for intervention, arguing the centrality of barley, which forms 65pc to 80pc of beer inputs, to the sector’s sustainability and productivity.

“Barley is the lung of our industry,” said Bart De Keninck, chairman of the Association and general manager of Heineken Ethiopia Plc.

Industry leaders attributed much of the price increase and shortage to hoarding, which disrupts supply chains, slows production, and raises operational costs. As of February this year, international barley prices were 113 dollars a tonne, considerably lower than the domestic prices, making locally sourced barley among the world’s most expensive.

The beer industry’s annual barley demand is 185,000tns. Yet, by late March, malt processors had secured only 12pc of this total, although more than half of the required barley should have already been collected during the current harvesting season.

De Keninck disclosed that the Association urged the Ministry to stabilise the barley supply chain and maintain productivity. Its leaders alerted the authorities on licensed and unlicensed traders engaging in hoarding practices. They also advocate for eased import restrictions during severe shortages and closer collaboration with major barley producers and distributors.

The crisis follows recent regulatory changes that encouraged the beer industry to shift entirely to locally sourced barley by 2023. A newly introduced excise tax law imposed differentiated rates, favouring breweries using locally sourced barley. Companies using at least 75pc local barley face a 30pc tax or eight Birr a litre. Those exclusively using local barley are subjected to 35pc or nine Br. Beer producers dependent on imported barley pay the highest rate of 40pc (11 Br).

Such regulatory measures prompted major industry players, like Heineken and Malteries Soufflet, to launch extensive programs offering seeds, training, and funding to thousands of local barley farmers. These initiatives increased local barley production and improved farmers’ livelihoods. Despite these efforts, recent alleged hoarding and trading disruptions have reversed gains, forcing malt producers and breweries to reconsider importing barley again.

Unlike many countries, Ethiopia’s beer market is dominated by five companies – BGI Ethiopia (Castel Group), Heineken Ethiopia, Dashen Brewery, Habesha Breweries, and United Beverages, which together control the vast majority of beer production, with a total capacity of 21 million hectolitres. After a string of acquisitions, BGI Ethiopia operates the most breweries (six recently), and Heineken runs three plants. It has the capacity of producing 5.3million hectolitres annualy. Dashen (majority owned by UK-based Vasari) and Habesha (part-owned by Netherlands-based Bavaria-Swinkels) have also expanded capacity in recent years.

With a 40pc market share, Heineken Ethiopia has particularly felt the strain. Entering the Ethiopian market 12 years ago through acquisitions of Harar and Bedela breweries, the company gradually transitioned to local barley, increasing its sourcing from just three percent in 2013 to 100pc by 2023. In 2023 alone, Heineken Ethiopia contributed 9.7 bllion Br in taxes.

However, its executives worry that the barley shortage could undermine these gains, pushing the company and others back towards importing.

Heineken, heavily dependent on barley from West Arsi and Bale in Oromia Regional State, meets nearly half its barley needs and expects a 50pc shortfall by year-end. The remaining supply is sourced from the Sidama Regional State and Gurage Zone in the Southern Regional State.

Similarly, Habesha Brewery, established by 8,000 shareholders in 2009 and operational since 2015, also faces severe shortages. According to Surafel Bogale, Habesha’s technology manager, their midseason barley collection is 60pc below target. The price surge has also hurt them, with barley prices jumping from 55 Br a kilogram to over 100 Br in recent months. Surafel noted that imported barley costs less despite the tax advantages favouring local sourcing.

“It seems they have taken the market for granted,” Surafel told Fortune, calling for immediate action by the authorities and revisiting excise taxes.

For tax expert Biruk Nigusse, excise taxes are designed to boost revenue and discourage certain products, including alcohol. However, he called for policy intervention, such as facilitating barley imports, should shortages become evident. Biruk stressed the importance of the brewery industry, noting that brewing companies contribute around 20pc of total profit taxes, making their financial health vital to federal revenues.

Soufflet Malt Ethiopia, which started operations in 2017 with a 50 million dollar investment, now faces similar shortages. The company’s malt processing plant, capable of handling 800,000Qtls annually, secured only 25pc of its barley needs halfway through the harvest season. Its Deputy Supply Chain Director, Tesfaye Bedada, blamed hoarding and “illegal trading” for disrupting supplies. Although prioritising local sourcing, the company begins to consider imports.

At the heart of the barley shortage lies the shift by many farmers towards wheat cultivation, driven by better pricing and profitability.

According to Abdurahman Haji, head of Galema Farmers Union, representing 74,000 farmers in Oromia Regional State, last year barley sold for 2,500 Br a quintal compared to wheat at 5,000 Br, prompting nearly 30pc of his members to switch crops. The Union, which supplied over 100,000Qtls of barley two years ago, collected one-tenth of this volume this year due to lower yields and fewer farmers growing barley.

“Farmers go to where the profit is,” said Abdurahman.

Agroeconomist Marelegn Adugna (PhD) advocated boosting barley production through strict contract farming agreements, ensuring breweries provide necessary inputs to reduce farmers’ production costs. Marelegn urged breweries to raise barley purchasing prices to encourage sustained barley farming, and proposed contract prices would adjust according to market rates.

“The farmer should be prioritised,” Marelegn told Fortune.

But, farmers like Abdurahman blame contract farming initiatives as ineffective despite market volatility.

Million Beza, general manager of Highland Green Farm in Bale, confirmed that last year’s low barley prices prompted his company to gamble on barley, reaping profits as prices surged. Highland Green sold barley at 8,600 Br a quintal, a sharp increase from last year’s losses when production costs of 3,500 Br exceeded the selling price of around 3,000 Br. Million urged enhanced government support for inputs such as fertiliser and technical guidance to optimise productivity.

However, despite widespread concerns over declining production, Oromia’s State’s Agriculture Bureau officials dispute any major shortfall. Deputy General Berisso Feyesa claimed the region’s barley production slightly increased this year, reaching 15.6 million quintals from half a million hectares. Instead, Berisso attributed shortages primarily to illegal hoarding and trade, urging intensified legal actions against traders and non-compliant farmers. He confirmed yields average around 35Qtls a hectare.

The Ministry of Agriculture reported that last year’s barley harvest replaced imports valued at 283 million dollars. The Arsi Zone alone allocated 177,000hcts for barley, expecting around 6.9 million quintals, alongside 451,000hcts for wheat, projected to yield 16 million quintals.

Officials of the Ministry of Industry are investigating the causes of the alleged barley hoarding and shortages, forming a taskforce under State Minister Hassen Mohammed. Amarkegn Em’kulu, head of the Ministry’s input desk, acknowledged recent demands after a year without imports, confirming barley price increases compared to last year. The Ministry plans to table the issue before the macroeconomic committee, chaired by Girma Birru, special economic policy advisor to the Prime Minister, initiating comprehensive research on barley production capacities and market dynamics.

CHASED FOR A LIVING

Posted on March 30, 2025March 31, 2025 by Digital Editor

At dusk, Haile Garment Square in the southern outskirts of Addis Abeba transforms from a quiet street into a lively market. Vendors quickly spread their merchandise — clothes, shoes, vegetables, household items — along sidewalks and street corners. Within moments, crowds form, eager for bargains. However, the scene can shift dramatically. At any sign of law enforcement, sellers scramble to run away, often leaving goods behind or facing harsh fines.

Andualem Tezera knows the routine well. Selling pineapples from his small, single-tire cart, he makes an average of 1,000 Br a day, carefully positioning himself in areas with steady pedestrian traffic.

“We stay alert,” he told Fortune. “We run, and we sell.”

Despite precautions, Andualem has had his merchandise seized twice in three weeks. Recently, he claimed to have been roughed up by law enforcement members the city administration deployed for failing to notice their approach while serving a customer.

“It’s not surprising,” he said. “We’re used to it.”

Street vendors like Andualem operate under constant threat from local officials. The Addis Abeba City Administration, determined to formalise this sprawling informal economy, introduced new regulations earlier this month. Street traders are now required to obtain permits from local bureaus, wear identification cards, and trade only in specified locations. To qualify, vendors should possess a resident ID of Addis Abeba, show proof of unemployment, and hold a taxpayer identification number (TIN). Those who surpass 200,000 Br earnings in two years are expected to vacate assigned spots, shifting into standard commercial activities.

Melese Tegenu, director of Legal Services at the city’s Trade Bureau, acknowledged the long-standing presence of street trading. He noted from the Central Statistics Servcies data that informal traders accounted for nearly half the city’s businesses in 2014, numbering over one million. By 2018, around 117,000 street vendors had operated in Addis Abeba, though recent development projects markedly reduced their numbers.

The city’s earlier attempts to regularise informal trading failed due to poor enforcement, prompting the revised regulation issued in 2009, but informed by experiences from international cities like Bangkok, Mumbai, and Johannesburg.

According to Habiba Siraj, head of the Addis Abeba Trade Bureau, the regulation’s objectives are to maintain the city’s tidiness, ensure public safety, and generate sustainable revenue. About 8,000 vendors are currently organised under the city’s Administration. Habiba dismissed concerns about identification barriers, insisting that anyone with proof of unemployment and six months of city residence is eligible.

Despite such assurances, vendors like Alem Wale, a vegetable seller and mother of two, find the regulation restrictive. She previously participated in government-organised markets, but those opportunities disappeared after redevelopment projects. Now, forced back onto the streets, she regularly faces seizures.

“We want to work legally, but opportunities are limited,” Alem said, placing her financial struggles as her daily concerns.

She earns about 300 Br a day, a precarious livelihood threatened by daily enforcement patrols and the fees they are subjected to.

Vendors now pay fees amounting to 600 Br for late permit renewals, 200 Br for initial registrations, and 300 Br annually for renewals. Specific zones have been designated, too. Permanent stalls, seasonal markets, and Sunday markets are included in the regulations.

The guidelines are detailed. Vegetables and clothing vendors have time slots from 5:00am to 7: 00am; printed materials are available until 12:00pm; fast food is available until 2:00pm; cleaning services are available in the afternoon, and consumer goods are available until 9:30pm.

However, vendors face demands beyond mere fees. Obtaining a residential ID, essential for registration, is difficult.

According to Aemro Kassa of the Addis Abeba City Civil Registration Agency, obtaining an ID would require six months of residence verification unless the individual holds a National ID. Between 2021 and 2024, around 57,000 people applied for such IDs in Addis Abeba; only 16,562 were approved.

Zegeye Derese, 27, a graduate from Ommo Valley College, moved to Addis Abeba after failing to find employment in his hometown. Selling tomatoes provides his sole income, around 300 Br a day. He applied for a resident ID six months ago and remains in bureaucratic limbo. Recently, all his stock was seized during a raid.

“Their job is enforcing the law, but this is our livelihood,” said Zegeye. “We’re used to running, but they’ve begun bashing us now.”

Nonetheless, those running the informal economy such as Andualem and Zegeye are one crucial part of the national economy, accounting for approximately 33.5pc of GDP. Business consultant Mustefa Awol argues that street vendors provide vital services, creating affordable market options essential to urban living.

Globally, informal economies employ nearly 2.5 billion people, while in sub-Saharan Africa, the sector provides 30pc to 80pc of urban employment, depending on the country’s economic level.

City officials insist formalising street vendors helps to improve teh city’s revenue streams. According to Deputy Mayor Jantrar Abay, approximately 65,000 informal structures existed two years ago, contributing to street vending. He recognised integrating traders into the formal economy as complex.

“It’s difficult, complicated, and unconventional,” he said, arguing for the necessity of enforcement to identify issues.

Formal traders like Abebe Ayano, who owns a boutique in Merkato, see informal traders as unfair competitors. He observed them offering price disparities, with street vendors selling products for substantially less. They do not pay taxes, and their overhead costs are very low, and they are free of rent.

“They sell the same clothes at lower prices. It puts a lot of pressure on us,” Abebe said. “Buyers benefit from lower prices.”

Abel Teshome, a government employee earning 12,000 Br monthly, relies heavily on street vendors for affordable clothing. He finds shopping at formal retailers financially demanding. He believes he can save between 300 Br and 600 Br on an item by buying from informal traders.

“It’s difficult to survive on a salary in Addis Abeba while shopping only at branded stores,” Abel said.

But street vendors like Mohamed Awol are being discouraged by the fear of a law enforcement chase and the potential seizure of commodities. He usually hangs around corners around Saris, earning about 2,000 Br a day.

“Running has become part of our job,” Mohamed told Fortune.

He found that not all law enforcement members behaved similarly. Some chase vendors away, while others aggressively confiscate goods.

The law enforcement members are under the Addis Abeba Code Enforcement Authority and are tasked with public awareness, securing areas, and confiscating goods. The code enforcement unit comprises 6,000 personnel, most of whom hold university degrees. Around 30pc to 40pc focus on public awareness campaigns, while the rest are assigned to prevention and enforcement tasks. They take confiscated perishable goods to district offices, while durable goods are auctioned.

Their boss, Girum Woldemeskel, who oversees the monitoring and violation control department, acknowledged that confrontations between code enforcers and vendors could occasionally escalate dangerously.

“Given the size of Addis Abeba, it’s challenging to monitor every location, but we work with various partners,” he told Fortune.

For legal experts like Daniel Fikadu, the latest regulation violates constitutional rights, restricting citizen mobility and economic freedom. Daniel contended that regional authorities lack jurisdiction over inter-state commerce, which is traditionally governed federally.

Minister of Labor Muferihat Kamil refrained from commenting on constitutional debates but affirmed the federal government’s goal of transitioning street vendors into formal economic roles. Her Ministry has assumed the ambitious target of creating two million jobs nationwide.

“This process is being implemented nationwide, piloting in Addis Abeba and expanding to the regions and districts,” she said. “It’s a priority for us.”

The consultant, Mustefa, viewed formalisation positively, asserting benefits such as improved economic security, better access to social services, and enhanced municipal revenue. Yet, he cautioned that limiting participation to ID holders presents daunting obstacles.

“These regulations should involve stakeholders directly, ensuring practicality and effectiveness,” he told Fortune.

Ministries Unveil Strategy for Local EV Procurement

Posted on March 30, 2025March 30, 2025 by Digital Editor

Federal officials are accelerating the shift towards domestically assembled electric vehicles (EVs), with a landmark directive prioritising them in public procurement. The initiative, backed by the ministries of Transport & Logistics and Industry, mandates a 15pc price preference for domestic assemblers with over 35pc value addition, hoping to boost domestic production despite persistent competition from more affordable imports.

With 639 EVs procured or contracted for, and a bold ambition to deploy half a million EVs by 2030, federal officials believe groundwork for a sustainable transport future is being laid.

Werku Gezahegn, head of procurement department at the Procurement & Property Service confirmed the federal government’s procurement. He disclosed that smaller vehicles and buses are available domestically, but heavy-duty electric vehicles remain scarce.

Nevertheless, imports still dominate public EV procurement due to lower costs.

The Ministry of Transport & Logistics, partnering with the Ministry of Industry, introduced the strategy. Alemu Sime (PhD), minister of Transport, affirmed his Administration’s commitment, asserting that Ethiopia solely procures electric vehicles, except in areas where infrastructure remains inadequate.

The authorities have banned fuel-powered vehicle imports, aspiring to meet global climate objectives, despite international concerns voiced by organisations such as the World Trade Organization (WTO) and fuel-exporting countries. Ethiopia spent nearly six billion dollars on fuel imports in 2023, draining its foreign reserves.

A federal steering committee has been formed to oversee the implementation of the electric vehicle strategy, supported by a technical team responsible for proposals and execution. Alemu’s Ministry is tasked with tracking progress.

“The lack of sector-specific expertise has been a major obstacle,” said Alemu.

The strategy seeks to conform with the Administration’s ambitious 10-year growth plan, which targets deploying half a million electric vehicles by 2030, including 148,000 electric cars and 48,555 buses. It aspires to install 2,226 charging stations nationwide, 1,176 in Addis Abeba. Charging points are planned in every 50Km in urban areas and 120Km along highways to accommodate long-haul and heavy-duty vehicles.

Around 70 to 80 charging stations are already operational in key urban areas, with additional installations planned at hospitals, government offices, bus stations, and hotels.

The strategy also allows for the establishment of a centre of excellence (CoE) for electric vehicle training, integrating EV expertise into the technical and vocational training curriculum. The authorities see the centre becoming crucial in building a skilled workforce essential for the growing EV market. The strategy identified inadequate incentives, weak regulatory frameworks, and limited vehicle financing options as critical barriers. Inadequate infrastructure, including insufficient charging stations, maintenance centres, and trained technicians, are slowing the industry’s growth. High vehicle prices and shipping costs further discourage EV adoption.

The strategy seeks to establish Ethiopia as a competitive manufacturing hub, facilitating technology transfer, skill development, and innovation. Key policy interventions include streamlining the transport of assembled vehicles through a dedicated direct port delivery system, introducing asset-based financing schemes for domestically assembled EVs.

According to Besufekad Shewaye, CEO of Belayneh Kinde Metal Engineering, domestic assemblers meet technical and quality standards but fiercely compete against lower-cost imports. They bear steep operational costs and limited tax benefits.

“The tariff advantage is only five percent,” said Besufekad.

Ethiopia’s current production capacity includes 63,900 two-wheelers and three-wheelers, 14,900 automobiles, 1,200 light trucks, and 3,500 minibuses and buses. However, the annual EV manufacturing capacity of 84,000 units remains underutilised at around 10pc.

Besufekad disclosed his company’s desire to set up charging stations and urged government support for grid connections and land allocation. However, financing remains a major constraint, with local banks remaining sceptical about advancing loans for electric vehicles. A notable intervention included in the strategy is providing project financing for EV assemblers and infrastructure developers, alongside affordable loans for consumers and assemblers. It proposed a transparent foreign currency allocation process through commercial banks involved in EV development.

Belayneh Kinde Metal Engineering, one of the domestic assemblers, is to import battery cells for local assembly and has already trained 36 specialists, initially sending technicians to China.

“We’ve an agreement with Addis Abeba University to develop a new curriculum for EVs,” he told Fortune.

Data from the Ministry of Industry revealed that 21,800 vehicles are assembled annually, including 2,061 EVs in the last fiscal year. Nevertheless, imports remain dominant, with approximately 25,000 EVs brought in the first half of the current fiscal year alone.

Research shows that 80pc of vehicles exported to developing countries, including half those sent to Africa, are found to fail basic safety and environmental standards.

Senior climate change expert Yizengaw Yitayih noted that despite assemblers’ concerns, putting these vehicles together locally provides price advantages. The initial five percent import tariff was specifically designed to encourage domestic production. He urged systematic charging infrastructure mapping, particularly in Addis Abeba, to optimise their effectiveness.

According to State Minister for Transport Bareo Hassen, there will be a partnership with other interested entities such as Ethiopian Electric Power (EEP) for effective infrastructure mapping.

Other federal officials call for clarity in regulations, primarily for residential charging stations. Destaw Mekuanent, deputy director at the Ethiopian Petroleum Authority, observed that some state enterprises have already established stations without proper licensing. A regulation to license charging stations was ratified recently.

Minister Alemu has urged swift action and disclosed plans to regulate EV charging tariffs, ensuring affordability for low-income users.

The strategy proposed offering subsidies and tax credits, particularly for low-income households, to bridge the price gap between electric and gasoline-powered vehicles. Low-interest loans are thought to facilitate broader EV ownership.

The strategy also targets foreign direct investment (FDI) and developing integrated value chains to diversify EV production capabilities. Federal Investment Commissioner Zeleke Temesgen (PhD) disclosed that foreign investors have shown keen interest in establishing charging stations but face regulatory hurdles. He would like to see performance-based incentives similar to those provided in special economic zones (SEZs) to attract more manufacturers.

Ethiopia is home to around 100,000 electric vehicles out of a total vehicle count of approximately 1.5 million.

Yizengaw foresees diesel-powered vehicles being required to meet stricter emission standards soon under the broader climate policy. The authorities expect substantial savings from transitioning to electric cars. In the fiscal year 2021/22 alone, the federal government allocated over 608.5 million dollars in fuel subsidies.

E-mobility expert Bereket Tesfaye praised the practicality of the government’s interventions but criticised insufficient engagement with the private sector. He sees a crucial gap in the absence of a legal framework governing EV battery manufacturing, voicing his concern over rising electricity demand and calling for a detailed assessment by Ethiopian Electric Power.

“The number of grids required should be quantified,” he urged.

The experts believe widespread scepticism, fueled mainly by misinformation and anxiety, remains a barrier to public acceptance. They warn that a lack of battery recycling and disposal solutions poses environmental concerns.

Authorities Eye Treasury Overhaul as Billions Vanish in Fiscal Fog

Posted on March 30, 2025March 30, 2025 by Digital Editor

The federal government is pushing towards a single account for the treasury to consolidate its financial resources, which promises to streamline budgetary control and trim cash mismanagement.

In recent audits, over 33 billion Br in inefficiencies were uncovered across federal agencies, pressing the need for reform. The new Treasury Single Account (TSA) initiative, integrated into the IFMIS, is projected to roll out fully next fiscal year, targeting improved transparency and budget discipline.

Since the early 2000s, Ethiopia relied on an Integrated Budget & Expenditure Management (IBEX) system, transitioning to IFMIS in 2019. A federal audit disclosed troubling inefficiencies, including 14 billion Br in unaccounted allowances, 19 billion Br in unused budgets from 101 federal agencies, and only 79 out of 169 agencies achieving unqualified audit opinions. In a particularly alarming case, Immigration & Citizenship Services (ICS) was found collecting unauthorised fees through personal bank accounts, contracting services from an unregistered company, Viditure, which cost Ethiopian expatriates.

According to Dawit Shimels, head of public financial management at the Ministry of Finance, the reforms comply with updated financial directives and cash management instructions.

“Centralising government finances will improve liquidity and efficiency,” Dawit said. “Consolidating scattered public accounts would enhance oversight.”

However, he anticipated potential reluctance among some federal entities during implementation. The authorities are working to identify the total amount of funds dispersed across thousands of federal agency accounts, including dormant ones, to establish clear guidelines for their closure and the subsequent transfer of balances to the TSA.

At a recent public consultation held at the Haile Grand Hotel on Asmera Road, high-ranking officials from the Ministry of Finance, the National Bank of Ethiopia (NBE), and financial consultants brainstormed the opportunities and potential impediments associated with a unified account system. State Minister for Finance Eyob Tekalign (PhD) stated that a single treasury account is necessary for effective financial oversight and fiscal discipline.

“We can curb unnecessary public borrowing,” said Eyob.

Bizuneh Bekele, CEO of Digi Finance and a consultant working with the government, outlined two possible TSA frameworks during the meeting. The first is a centralised model at the central bank with sub-transaction accounts, while the alternative maintains daily balance transfers from agency accounts in commercial banks to a central TSA. Bizuneh argued for the necessity for an efficient banking infrastructure and robust administrative capabilities for either model to succeed.

Close to 170 federal agencies manage their budgets through numerous bank accounts, which complicates cash management and causes inefficiencies and financial mismanagement. Finance authorities intend to include all these agencies under the TSA, which will demand substantial amendments to existing budget codes, system upgrades, and extensive training programs for federal employees.

The TSA will incorporate the Integrated Financial Management Information System (IFMIS), enabling real-time monitoring of public funds. Officials believe this integration will offer greater transparency and accountability across public entities. The reform is deemed crucial at a time when federal authorities struggle with budget deficits, characterised by mismatches between inflows, such as taxes, non-tax revenues, grants, loans, and asset sales, and outflows, including debt payments, subsidies, and interest expenses.

Federal agencies managed eight types of accounts, including zero-balance accounts (Z Accounts), introduced in 2005, and “B” accounts that hold revenues generated by agencies. Z Accounts allow agencies to withdraw up to their monthly limits, with daily deposits from the treasury at the NBE. However, misuse of accounts, notably “B” accounts intended only for revenue collection, has exacerbated financial mismanagement.

Bizuneh pointed out large cash idling in “D” accounts, trust fund accounts of certain public entities, further straining treasury operations.

Federal entities have relied heavily on domestic borrowing, often resorting to overdrafts and liquidity injections, causing inflationary pressures and cash shortages. Central Bank officials have reaffirmed their commitment to maintaining an 18pc credit growth cap during persistent inflation. Governor Mamo Mihretu has adopted a more stringent monetary policy, targeting broader macroeconomic policy reforms agreed upon with the IMF.

The National Bank’s monetary policy committee recently tightened its monetary policy, capping credit growth, raising commercial lending rates, and reducing direct government borrowing by approximately 147 billion Br. Despite these measures, inflation remains high at nearly 16pc year-on-year (YoY), proving the difficulties of economic stabilisation are persistent.

Weyneshet Zeberga, director of monetary and financial analysis at the Central Bank, noted that extensive dispersals to government agencies had distorted the money supply, complicating monetary policy operations. She believes the TSA will address these distortions, clarify actual liquidity positions, thereby enable accurate interest rate determinations for treasury bills and interbank markets.

“Interest rate distortions have been apparent due to unknown treasury funds,” Weyneshet said. “TSA would facilitate smoother policy implementation by accurately monitoring liquidity levels, stabilising the exchange rate, and ensuring transparent fiscal management.”

Globally, TSAs have gained recognition for their effectiveness in managing governmental funds. Nigeria, for example, embarked on its TSA reform in the early 2000s, fully implementing a centralised TSA by 2014. It consolidated revenues and expenditures into a single Central Bank account, reducing idle balances and enhancing financial discipline. India has also adopted a hybrid model, combining centralised and decentralised approaches, although challenges persist in effectively reducing idle funds.

Ethiopian authorities hope to learn from these international experiences as they implement their TSA.

According to Neteru Wondwossen, head of treasury and government accounts at the Finance Ministry, the country has made notable progress in digital payment reforms. Over the past eight months alone, digital transactions have exceeded 343 billion Br, with 95pc of federal agencies exclusively using electronic payments, demonstrating the potential of digital integration with the upcoming TSA.

Nevertheless, integrating donor funds into the TSA remains contentious. Despite international agreements, notably the Paris Declaration of 2005 advocating donor funds integration, Bizuneh cautioned, citing donor concerns over transparency, accountability, and exchange rate fluctuations. While several African countries have successfully implemented TSAs, incorporating donor accounts continued to present disagreements.

“The country has to navigate how to go about it,” said Bizuneh, echoing a cautious optimism that Ethiopia can address its longstanding fiscal problems through disciplined and consolidated financial management.

Audit Finds Millions Unspent as Transport Ministry Wrestles with Merger Delays

Posted on March 30, 2025April 4, 2025 by Digital Editor

The Ministry of Transport & Logistics faced scrutiny after federal auditors uncovered financial irregularities, including unused funds, delayed projects, and procurement anomalies tied mainly to a recent merger.

Questions emerged following an audit which revealed that 346 million Br remained unused from the Ministry’s 2022 budget year.

According to Almaz Negash, head of the Ministry’s finance department, several construction projects, including the Qality Terminal, Qality Training Centre, Merkato Terminal, and liquid and dry port repairs, experienced delays primarily due to the Ministry’s merger with the Transport Authority in the 2022/23 fiscal year. Construction activities were halted during this transition as administrative focus shifted toward employee redeployment and organisational restructuring.

“The merger extended project timelines,” said Almaz.

According to financial advisor Mekebeb Tesfaye, effective leadership, a clear administrative mandate, and timely reporting were essential to addressing merger-related disruptions.

Budgetary constraints compounded the issue. Despite the Ministry requesting around 200 million Br for each project, the Ministry of Finance capped annual construction budgets at one billion Birr. Almaz noted further project disruptions from land disputes with entities such as the Federal Police Commission.

State Minister for Transport Dhenge Boru attributed the unused budget primarily to the Ministry of Finance’s late allocation of budgets, alongside rising construction costs. He disclosed that 74 million Br from the capital budget had been directed to projects in Dire Dawa. While acknowledging improved budget utilisation recently, he pressed the ongoing need for better performance.

Officials of the Ministry of Finance countered these claims, retorting that they allocate funds based on resource availability and demanding reports be submitted well before budget closures. They claimed the Ministry of Transport did not provide financial reports for the previous year, warning of potential accountability measures.

An audit by the Federal Auditor General uncovered additional irregularities totaling 8.2 million Br. According to Deputy Auditor Abera Tadesse, while some issues had been resolved after the audit findings, discrepancies amounting to 2.8 million Br remained unresolved. Federal auditors identified 3.9 million Br in uncollected funds, of which 2.5 million Br still required closure.

The audit detailed delays in depositing daily revenue, amounting to 5.4 million Br, with delays ranging from five to 130 days. Following the auditors’ recommendations, cash held by the Ministry staff has since decreased substantially to 1.5 million Br, reducing deposit delays to a maximum of five days. The Ministry has also initiated digitisation efforts for payment processes.

Procurement irregularities represented another major concern. Nearly three million Birr worth of services, such as hotel stays and public announcements, bypassed standard procurement procedures. An additional 2.2 million Br of services and equipment was similarly bought without proper procurement processes, despite being planned transactions. Collectively, procurement outside the national electronic trade system reached 12 million Br.

Transport Minister Alemu Sime (PhD) defended these direct purchases, describing them as necessary due to urgency, security considerations for hotels, merger-related employee redeployment, and national defense needs. However, Deputy Auditor Abera strongly advised against continuing this practice, urging compliance with procurement standards.

Auditors also uncovered notable flaws in property management, including improper handling of vehicles and office equipment. Federal auditors discovered 68 expired printing cartridges and 113 vehicles improperly stored or disposed of without adequate documentation, some damaged due to prolonged storage. Seven former employees resigned without formally handing over assigned equipment, complicating accountability.

According to the Ministry’s representative, Yigazaw Dagnew, some employees had relocated abroad or were difficult to trace, but disclosed legal actions were underway.

Several vehicles had documentation issues, while others had been in storage since 2007. The Ministry’s officials described discrepancies in vehicle disposal, disclosing a total of 128 vehicles intended for removal. Of these, 63 were ready for disposal, 25 are undergoing procurement processes, 12 had been sold for 3.68 million Br, while 13 were up for sale. Minister Alemu disclosed that special vehicles would be donated to museums, while irretrievable ones would be sold as scrap.

Fuel consumption was another concern, as auditors noted the absence of standardised fuel usage guidelines. The Ministry affirmed that normalisation processes had already been implemented for 62 vehicles, with plans to include another 28 shortly.

Federal Auditor General Meseret Damete acknowledged recent efforts to address these issues, pressing for electronic procurement, timely fund collection, and transparent financial practices.

Fuel Shortage Fuels Parallel Market in Tigray State as Supplies Falter

Posted on March 30, 2025April 1, 2025 by Digital Editor

Tigray Regional State is experiencing an acute fuel shortage that has impacted agriculture, disrupted businesses, and led to the rapid expansion of an illicit fuel market. Regional officials blame federal agencies for cutting off supplies, while the latter cite nationwide disruptions and technical failures at Djibouti port terminals.

Fuel scarcity in Tigray State has worsened over the past two months, forcing desperate businesses and farmers to resort to the parallel markets. Petrol prices on the illicit market surged to as high as 300 Br a litre, almost three times the official rate of 112 Br.

Gebremeskel Tareke, head of Tigray State’s Trade & Export Agency, appealled in a letter to federal agencies, including the Ministry of Trade & Regional Integration (MoTRI), the Petroleum & Energy Authority (PEA), and the Ethiopian Petroleum Supply Enterprise (EPSE). He disclosed that fuel deliveries declined sharply starting in January 2025, reducing to two trucks before halting entirely by March 13.

“The region is in a deep crisis,” said Kassahun Kindye, head of consumer protection at Tigray’s Trade & Export Agency.

According to him, the region received about nine million litres of fuel monthly, despite an actual demand of approximately 13 million litres. Supplies plummeted to five million litres two months ago, and deliveries ceased entirely two weeks prior.

Kassahun criticised federal authorities for not responding adequately to the crisis, noting that the lack of fuel has effectively paralysed agriculture and businesses.

“The authorities have turned a blind eye on us,” he told Fortune. “We don’t want to be politically targeted. We only want to continue rebuilding.”

The fuel shortage has brought broader economic disruptions, impacting transportation, healthcare, and agriculture. The Tigray Chamber of Commerce & Sectoral Associations (TCCSA), representing over 30,000 businesses, has repeatedly urged regional and federal authorities to resolve the crisis.

Berihu Haftu, president of the Chamber, portrayed a grim reality for the region’s economy, which was already struggling from the recent two-year civil war.

“The economy of Tigray hasn’t recovered,” he said. “Many local businesses are now on the brink of collapse.”

One such business, Selam Tranite Plc, which has been in business since 2006 and employs over 250 people, has faced severe operational setbacks. According to its General Manager, Gebrewahd Asfaw, the company relies heavily on diesel. Its four buses and two trucks are inactive due to fuel shortages, forcing the company to scale down production drastically. Production dropped nearly threefold, reducing its ceramic output to 650Sqm a day.

“We’re on the brink of closure,” Gebrewahd told Fortune.

The company had secured a 105 million Br loan a few months before the war erupted in November 2020. Accumulating interest has since inflated their debt close to 200 million Br. Efforts to secure an additional 150 million Br loan remain pending, further complicating the company’s financial predicament.

Despite the federal government’s recent removal of fuel subsidies and pricing reforms targeting efficiency, Tigray State continues to face chronic shortages.

Last week, Trade Minister Kassahun Goffe (PhD) increased petrol prices to 112 Br a litre, nearly a 10pc rise. Diesel now costs 109 Br a litre. Influenced by global market pressures, currency depreciation, and subsidy removal, the hikes sparked sharp criticism from consumers across urban areas.

Federal authorities have recognised the concerns raised by Tigray State officials.

Tesfaye Abo, head of commodity price monitoring at MoTRI, confirmed they had received alarming reports about severe drops in benzene and diesel supplies. He disclosed that his office promptly communicated these concerns to the Petroleum & Energy Authority for immediate action. However, the Authority claimed it was unaware of the severity of the issue until recently.

According to Dibira Fufa, the Authority’s deputy general director, investigations began promptly after they received formal notice. Despite recognising the deficit, Dibira noted ongoing regulatory reviews to resolve the issue.

“We’re working to deal with the shortage,” he said.

The Authority’s officials argue the fuel shortage is not exclusive to the Tigray Region but affects several regions nationwide. Technical disruptions at Djibouti’s Doraleh Port terminals have exacerbated the crisis. A malfunction of pumping systems at Horizon Djibouti Terminals disrupted deliveries nationwide for several days, said Bekelech Kuma, the Authority’s communications director.

The terminal, which manages nearly 400,000Cbm of storage capacity. It has faced persistent disruptions since a major fire five months ago. Diesel shipments to Ethiopia have decreased dramatically from 10 million litres daily by about three million litres recently. Despite efforts by the Ethiopian Petroleum Supply Enterprise (EPSE) to maintain approximately eight million litres in national supply, ongoing technical failures have caused frequent interruptions.

The Enterprise, tasked with nationwide fuel distribution to approximately 1.5 million vehicles, acknowledged challenges in maintaining consistent supplies, especially diesel, essential for public transportation.

The impact on Tigray State’s agriculture sector has been particularly severe. More than 100,000 farmers depend on fuel-driven irrigation pumps, using four million litres monthly.

Desta Berhe, vice president of the Tigray Producers, Processors & Exporters Association, saw farmers’ dire situation due to fuel shortages.

Farmers like Belay Gebreamlak, who grows onions, tomatoes, and fruits, have severely disrupted their livelihoods. Belay planned to harvest 50Qtls this year on his hectare farm but is unable to proceed without diesel for essential machinery.

“We’re unable to continue this year,” he lamented.

Belay also struggles financially, burdened by rental fees for a tractor that costs 10,000 Br a day, which was idle due to a lack of fuel.

Logistics and supply chain expert Zinabu Baye criticised the management failures in the fuel supply system. He called for well-defined response strategies, diversified import channels, and increased reserve inventories to prevent future disruptions.

“Logistical challenges cannot be overlooked given their consequential economic impact,” he told Fortune. “The management of fuel is too sensitive an issue to neglect logistical problems.”

Federal authorities maintain that ongoing reforms, including digitising fuel sales and reducing public subsidies, are essential to addressing inefficiencies. Nevertheless, the nationwide restructuring has heightened hardships for consumers, particularly in crisis-hit regions like Tigray State.

Fuel suppliers operating in Tigray voice frustration at unclear supply chain management.

Biniyam Aklog, deputy general manager of Yetebaberut, a supplier managing over 10 retail stations in Tigray said his company regularly placed orders with EPSE but still awaits deliveries.

“We’ve been fulfilling our part,” he said.

Regional and federal authorities continue to wrestle with limited options to address the fuel crisis. Officials in Addis Abeba admitted prioritising fuel distribution to the capital and surrounding areas due to high industrial and transportation demands, further disadvantaging regional states.

𝗘𝗱𝗶𝘁𝗼𝗿𝘀’ 𝗡𝗼𝘁𝗲: 𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗮𝗺𝗲𝗻𝗱𝗲𝗱 𝗳𝗿𝗼𝗺 𝗶𝘁𝘀 𝗼𝗿𝗶𝗴𝗶𝗻𝗮𝗹 𝗳𝗼𝗿𝗺 𝗼𝗻 𝗔𝗽𝗿𝗶𝗹 𝟭, 𝟮𝟬𝟮𝟱.

In the original we referred to Biniyam Aklog as the general manager of Yetebaberut. Biniyam is the deputy general manager. The general manager is Mengistu Demeke.

Addis Bank Races Ahead, Yet Trails Industry Peers

Posted on March 30, 2025March 30, 2025 by Digital Editor

In an industry characterised by tight liquidity, regulatory pressures, and growing credit risks, Addis International Bank (AdIB) posted robust financial results for the 2023/24 fiscal year, marking itself as a standout performer among peers and mid-tier financial institutions.

The Bank’s net profit reached 413 million Br, surging by an impressive 85pc compared to the previous year, outpacing the industry’s average net profit growth of around 32pc.

According to Aminu Nuru, a financial analyst based in Doha, Qatar, the remarkable increase, driven primarily by the Bank’s expansion of loan activities, foreign exchange operations, and digital banking services, proved its strong operational performance amid difficult market conditions.

However, despite its impressive growth, Addis Bank’s earnings remain modest compared to those of its competitors in the mid-tier league of the industry. Abay and Berhan banks reported substantially higher profits, 1.5 billion Br and 1.19 billion Br, respectively. Addis Bank’s earnings constitute only a fraction of the private banking industry’s total profits, which reached 22.2 billion Br, heavily dominated by larger banks such as Awash, Abyssinia, and Dashen.

Addis Bank’s total income increased by 44pc, reaching 2.4 billion Br, supported by a 34pc growth in interest income and a 66pc rise in fee and commission income. Bank officials attributed much of this growth to regulatory easing, especially the reduction in foreign exchange surrender requirements from 70pc to 50pc, which allowed banks to retain a larger portion of their foreign exchange earnings.

Hailu Alemu, the founding president of Addis Bank, believes strategic moves made during the fiscal year were instrumental in achieving positive results. He credited the diversification of revenue streams, loan portfolio expansion, strengthening of forex operations, and introduction of innovative digital banking products.

“We expanded our revenue streams by growing our loan book, strengthening our international banking segment, and introducing new digital products that boosted non-interest income,” Hailu told Fortune.

Despite this optimism, the sustainability of such impressive growth faces challenges.

Loan impairment charges sharply increased by 277pc, signalling growing credit risks. Industry analysts expressed concern that rising impairments, along with ongoing regulatory uncertainties, could potentially impact future profitability. Nonetheless, Hailu remained confident, banking on strategies that include further expansion of the loan portfolio, improved credit risk management, and leveraging favourable forex policies.

Hailu, who graduated in accounting and economics from Addis Abeba University, said the Bank plans to enhance digital banking services further, targeting higher fee-based income streams.

His optimism resonated among bank employees such as Mesfin Sileshi, manager of the AdIB’s main branch on Jomo Kenyatta St., near the UNECA headquarters. According to Mesfin, a robust performance in forex generation was helpful despite ongoing constraints related to outstanding bonds held by the state-owned Development Bank of Ethiopia (DBE). He also noted that the floating exchange rate regime presented promising opportunities for the Bank.

Founded in 2012, Addis Bank began operations with an initial equity of 109.4 million Br raised from over 5,309 founding shareholders, including various community savings associations like Edir and farmers’ unions. Over the years, its shareholder base expanded, reaching 16,181 by the end of the latest fiscal period.

According to Shimelis Gedlegiorgis, a founding shareholder, immediate profits, though valuable, should be balanced against sustainable performance achieved through effective corporate governance, innovative product development, and robust staff training.

“Profitability will come later on,” Shimelis told Fortune.

The Bank maintained a conservative capital position, evident from a strong capital-to-asset ratio of 20.8pc, positioning it advantageously amidst evolving regulatory requirements. Its total assets grew 22.2pc year-on-year, reaching 15.4 billion Br. While commendable, this figure remains below the industry’s average asset growth of 28pc and considerably smaller than mid-tier rivals like Abay Bank (66.4 billion Br) and Oromia Bank (114.6 billion Br). This posed a substantial challenge to Addis Bank in expanding its market share.

Customer confidence appeared strong, evidenced by steady growth in deposits, loans, and profits. Depositors increased notably, totaling nearly 720,000 at fiscal year-end. Deposits grew by approximately 21pc, reaching 11.1 billion Br, fueled by the opening of 24 new branches, bringing the total network to 156 branches nationwide. Analysts acknowledged that this expansion enhanced Addis Bank’s market visibility and customer attraction capacity.

AdIB also posted a solid return on equity (RoE) of 21.8pc, demonstrating strong profitability amid industry-wide concerns such as inflation and rising operational costs linked to expansion. However, Addis Bank still trailed behind compared to larger banks like Awash and Abyssinia, which consistently recorded RoEs near 30pc. Its return on assets (RoA) stood at a respectable 2.9pc, demonstrating efficient utilisation of its asset base.

During the past fiscal year, Addis Bank’s loans and advances grew by 14.5pc, still below the industry average of approximately 27pc. Nevertheless, the Bank’s loan-to-deposit ratio improved to 78pc, an enhancement from the previous year’s 82.67pc, displaying more prudent liquidity management. Analysts such as Aminu noted this as a sign that the Bank can comfortably extend further credit while maintaining sound financial practices.

Hailu acknowledged the high concentration risks associated with export-focused lending, constituting 44.2pc of the Bank’s total loan portfolio. He stated the importance of diversification strategies into sectors such as domestic trade, manufacturing, and construction to respond to potential credit risks.

Operational expenses increased notably during the year, with personnel costs rising 32.64pc, driven by branch expansion, wage adjustment, and additional recruitment. An unexpected surge of 128 million Br in expenses for security and janitorial services, outsourced to third-party providers, added to operational costs. Hailu justified these expenditures as essential investments to improve service quality and market competitiveness.

Despite rising expenses, Addis Bank maintained efficient cost management. Interest expenses accounted for roughly 35pc of total costs, helping sustain profitability. Earnings per share (EPS) improved from 12.91 Br to 20.44 Br, though still far below the industry average, signalling a continued need for growth to enhance shareholder value.

“We’re working to control operational and administrative expenses to improve overall financial performance and shareholder returns,” Hailu told Fortune.

Capital adequacy remained one of Addis Bank’s most impressive financial strengths, with a ratio previously approaching 30pc, higher than regulatory requirements. Nonetheless, the Bank faces future challenges about its capital. With current paid-up capital at 2.1 billion Br, Addis Bank remained behind the mandated five billion Birr threshold set for 2026, already surpassed by competitors like Abay Bank.

To address this capital shortfall, Hailu pinned his hope on shareholders’ willingness to reinvest dividends, along with ongoing efforts to sell additional shares publicly. Board Chairman Kassahun Bekele echoed this sentiment, encouraging shareholders to prioritise reinvesting dividends to consolidate capital and sustain growth.

According to the analyst Aminu, continuous investment and innovation remain critical as the digital banking segment evolves rapidly.

Hailu concurred, noting that the financial industry is changing rapidly, with new entrants and fintech companies reshaping how consumers interact with financial services.

“To stay competitive, we’re investing in digital transformation to streamline operations and improve customer experiences across digital and physical channels,” he told Fortune.

As the Birr Slips, Banks Maneuver Quietly While Policy Stands Still

Posted on March 30, 2025March 30, 2025 by Digital Editor

The Birr (Brewed Buck) edged slightly to stability against the U.S. Dollar (Green Buck) last week, revealing modest shifts in a market often characterised by subtle moves rather than dramatic swings. Beneath the surface, however, a growing divide between state-owned and private banks uncovered a brewing competition over foreign currency supplies.

Lion International Bank and ZamZam Bank emerged last week as the most assertive private players, nudging their buying rates close to 131 Br a dollar, markedly higher than their competitors and above the rates offered by the state-owned Commercial Bank of Ethiopia (CBE). Their aggressive positioning widened the gap, leaving the big five private banks — Awash, Abyssinia, Wegagen, Dashen, and Zemen— sailing around 128 Br, well below the upper limits of the market.

The average buying rate across the banking industry settled near 128.60 Br, while selling rates averaged approximately 130.50 Br. At the extremes, Lion and ZamZam offered the highest buying rates, while Nib Bank momentarily stood out at the low end, briefly dropping its rate to around 126 Br. Most other banks found themselves clustered within this spectrum.

CBE’s decision to maintain its buying rate relatively steady created a notable divergence, with private banks occasionally offering premiums nearly eight Birr higher. According to analysts, CBE’s cautious approach could be part of a broader policy objective of preserving foreign exchange reserves, even if this restraint inadvertently consolidates competitors willing and able to offer better terms. Observers believe private banks pushing towards 131 Br do so in response to tightened liquidity conditions and rising demand for the Green Buck.

Bankers themselves acknowledge the rationale, stating their need to secure sustained foreign currency inflows by providing attractive rates to sellers. Still, the week’s incremental adjustments appeared more about fine-tuning positions than marking shifts in market dynamics.

These cautious maneuvers demonstrated the current subdued state of the foreign exchange market, where forex inflows remain limited, and the National Bank of Ethiopia’s (NBE) interventions have been carefully measured. Despite minor volatility, the Birr’s slow depreciation generally matched market expectations, as even banks making noticeable rate adjustments avoided triggering major disruptions.

The National Bank of Ethiopia (NBE) itself displayed an active posturing, with daily spreads fluctuating between 0.36pc and 1.42pc, notable variations in a market otherwise moving cautiously within narrow bounds. Analysts are divided on interpreting these moves; some view them as short-term adjustments intended to manage interbank currency flows, while others believe they may reflect an evolving policy position driven by liquidity conditions or specific sector demands, especially within the import-dependent economy.

Among private banks, the Bank of Abyssinia (BoA) drew attention by briefly narrowing its currency spread to 1.6pc on March 27, only to return to the standard two percent spread by week’s end. Awash Bank adopted a similar tactic, briefly testing narrower spreads early in the week before reverting. Market analysts see these subtle alterations as internal calibrations rather than noteworthy shifts, moves intended to optimise foreign exchange strategies without unsettling market stability.

Individual bank actions also provided insights into the delicate manoeuvring underway. Nib Bank’s sharp rate cut from around 128.3 Br down to 126.27 Br on March 29 surprised some market watchers, who speculate this sudden adjustment may reflect specific liquidity pressures. Tsedey Bank steadily increased its buying rate, moving from approximately 130.1 Br to 130.3 Br by the end of the week, signalling a gradually heightening effort to attract foreign currency.

On the selling side, banks largely adhered to rates between 130 Br and 133 Br. Here, too, the Central Bank distinguished itself by incrementally adjusting its selling rate from around 129.5 Br at the start of the week to approximately 130.4 Br midweek, continuing its careful management of currency flow.

The week’s quiet yet steady depreciation unveiled how carefully banks weigh immediate pressures against long-term policy aims. Lion and ZamZam’s upward drift signalled their readiness to push rates higher in response to any further tightening of supply or incremental rise in demand. The conservative posturing of the big five private banks implies a choice favouring stability and risk management over immediate market share gains.

CBE’s reserved posture throughout the week, keeping its rates largely static, has prevented widespread upward movements among its peers. The nearly eight Birr gap separating CBE’s buying rate from the more aggressive private offerings uncovered differing priorities: CBE’s responsibility for maintaining sufficient reserves to meet broader economic goals, against private banks’ competitive motivations to secure foreign exchange.

Analysts and market watchers will closely monitor whether this widening divergence persists or if major players like CBE will eventually adjust their strategies in response to competitive pressures. Barring unexpected external shocks or major policy shifts, the Birr’s modest depreciation trend will likely remain intact. Nonetheless, these subtle variations are a constant reminder that the forex dynamic is shaped as much by quiet tactical adjustments as by overarching economic forces.

Media Council’s Edging to Accreditation a Deceitful Drift

Posted on March 30, 2025March 29, 2025 by Digital Editor

When the private satellite channel, Ethiopian Broadcasting Service (EBS), aired an emotional interview last week featuring a young woman’s allegations of sexual assault, it inadvertently sparked a political firestorm. Rather than encouraging meaningful discussion around sexual violence, a persistently recurring incident, the broadcast drew swift condemnation from government officials, accusations of “misinformation,” and, chillingly, the arrest of EBS staff and two of its managers.

The authorities’ swift response brought back memories of Ethiopia’s longstanding tradition of treating media disputes as criminal issues, despite recent media law supposedly ending such practices. In 2021, federal legislators passed a revised media law, removing criminal liability of defamation, safeguarding journalists’ sources, and promoting the autonomy of state-owned media. These reforms were initially praised as progressive steps toward genuine press freedom. However, when confronted with politically sensitive reporting, they have proven fragile.

Central to the controversy is the media’s role in society, the state’s mandate to control media excess, and the industry’s will and ability to self-regulate its conduct. The accusations of EBS’ “wrongful coverage” should have been dealt with through a self-regulatory mechanism that is active in all but name. Crucially, this episode should bring to the public’s attention a troubling new direction emerging within the Ethiopian Media Council (EMC), which was meant to be a self-regulatory media body.

Established nearly a decade ago to mediate ethical disputes voluntarily, the Council has instead started veering into alarming territory, seeking to establish a de facto accreditation regime for media practitioners. Although its by-laws strictly make membership voluntary, the Council’s leadership is subtly pushing toward a system that may effectively become mandatory, raising serious concerns among journalists and media practitioners. Accreditation often morphs into a compulsory requirement, with worrisome implications for journalistic freedom.

International experience shows accreditation often leads to censorship.

According to the Center for International Media Assistance (CIMA), around 25pc of countries it surveyed globally enforce journalist accreditation linked to governments. Such systems frequently become tools to suppress inconvenient reporting, notably in countries like Zimbabwe, Uganda, and Tanzania. Zimbabwe offers a cautionary tale. Its Access to Information & Protection of Privacy Act in 2002 mandated journalists to carry government-issued accreditation cards. Overnight, many journalists lost their legal status, effectively silencing independent media voices. Uganda similarly used strict accreditation to muzzle dissent.

Ethiopia risks repeating these mistakes, potentially silencing its fragile and increasingly embattled media scene. Its recent media record is troubling. Reporters Without Borders (RSF) ranked it 130th out of 180 in its 2023 Press Freedom Index, a modest improvement from 150th in 2017. Despite initial optimism following Prime Minister Abiy Ahmed’s (PhD) ascension in 2018, Ethiopia has been showing worrying signs of retreating to authoritarian practices reminiscent of earlier regimes.

Its history of media regulation should be instructive.

Since the fall of the Derg regime in 1991, successive administrations have swung between encouraging free expression and exerting political control. The landmark 2021 Media Proclamation No. 1238 was supposed to definitively shift toward a more tolerant media environment, protecting source confidentiality, decriminalising defamation, and encouraging independent self-regulation. Yet, barely four years later, these hard-earned gains are threatened. The Council’s subtle yet consequential push for accreditation could create a chilling environment reminiscent of the authoritarian legacy.

State misuse of ambiguous regulations against journalists is already prevalent. Under the vaguely defined Hate Speech & Disinformation Prevention Proclamation, journalists covering conflicts have faced arbitrary detention under accusations of “terrorism” or “incitement.” Journalists remain vulnerable to politically motivated charges, despite explicit legal protections.

The EBS saga should illustrate the widening gap between legal reforms and government actions. The media law explicitly denies authorities the power to detain journalists over content disputes, yet reality has proved otherwise.

Indeed, the best defense against “misinformation” and “irresponsible journalism” should be robust self-regulation and transparency, not arrests or a restrictive accreditation regime. A self-regulatory framework already exists, notably the Council’s Ethics Panel and Ombudsman. Sadly, these bodies remain largely inactive, failing to handle public complaints effectively, even from state bodies. Rather than revitalising these crucial oversight mechanisms, the Council’s leadership has prioritised bureaucratic initiatives in the guise of accreditation.

The non-statutory status of the media council was a hard-won battle for the media industry two decades ago. It emerged from a state concession in the mid-2000s under the EPRDFites, designed explicitly to prevent excessive state imposition on ethical values. Even senior politicians deemed authoritarian, such as Bereket Simon, then Information Minister, and his deputy Shimeles Kemal, had the common sense to recognise the value of self-regulation over journalistic ethics, responsibility, and accountability.

Today’s EMC, modeled after successful European and North American self-regulatory councils, was supposed to ensure accountability, peer review, and professional ethics without an attempt to coerce its members or perhaps those outside its horizons.

Alas! The prospect of introducing an accreditation regime, even if initially voluntary, presents the state with another tool to silence critical journalism. Globally, countries enforcing strict accreditation for journalists correlate strongly with diminished press freedom. With its statutory media council, even Kenya has faced intense criticism for infringing press freedom through compulsory registration.

International best practices point towards robust self-regulation, such as in Canada and Japan, where independent councils handle complaints and ethical issues, explicitly rejecting journalist accreditations.

The Ethiopian Media Council risks becoming a de facto statutory regulator, mirroring authoritarian approaches rather than democratic practice. Such a shift threatens to undermine media pluralism and public trust. Recent experiences demonstrate clearly that journalistic standards thrive best not through forced accreditation but through transparent self-regulation, peer accountability, and strong legal safeguards against state interference.

The EMC, whose leaders called a “validation workshop” a few weeks ago hoping to legitimise their intent, has neglected its fundamental roles. Most troublingly, despite numerous public grievances, it has yet to adjudicate ethical complaints against a media house. Rather than adhering to these original precepts, its leaders have increasingly indulged in their ambition to veer off to matters fit for civil society groups, such as training and advocacy. Their lack of transparency about their accreditation plans adds to the industry’s unease. They remain deliberately ambiguous about implementation and enforcement mechanisms, fueling suspicion and weakening trust at a critical time. Journalists, particularly younger and digitally savvy reporters, fear accreditation could stifle their newfound space.

Maintaining an autonomous, responsible, and accountable media remains essential. However, effective accountability does not come from restrictive accreditation or bureaucratic maneuvers. It can emerge from open and transparent self-regulation rooted in democratic values.

The Council’s leaders would do the industry good to abandon their uncalled-for push for accreditation and refocus their energy instead on activating the dormant self-regulatory mechanisms. Failing to do so risks squandering a historic opportunity to press for a genuine climate of freedom of speech and the press.

Addis Abeba Restores Fountains as Residents Queue for Water

Posted on March 30, 2025March 29, 2025 by Digital Editor

A decade after Ethiopia’s socialist revolution, the military regime unveiled Dilachin — “Our Victory” in 1984, a towering monument erected on Churchill Avenue, near Ambassador Theater. Set in a park of 30,000Sqm, the memorial celebrated the revolution itself, the Ethiopian victory in a war with Somalia under Sied Barre (Col.), and honoured fallen Cuban soldiers who fought in this war. It featured a grand water fountain, an undeniable spectacle at the time.

But grandeur soon clashed with reality. In a city plagued by inadequate sanitation, the fountain quickly became an unintended public wash area, earning a notorious nickname, “the People’s Lavatory.” Recognising a public health disaster, the authorities eventually turned off the taps.

Nearly four decades later, the monument still stands, though the regime that built it has long gone, replaced first by another political force with as much leftist legacy and then by dramatic political and economic shifts. Today, Addis Abeba bears little resemblance to the city of the 1980s; construction cranes punctuate the skyline, symbols of rapid urban development. Yet, despite notable modernisation, a problem persists stubbornly in water scarcity.

Residents struggle with uncertainty each morning, asking a question that should never require an answer.

Will there be water today?

Dry taps for days or even weeks force Addis Ababa residents to search for necessities daily. Those who can afford it pay steeply for deliveries: A litre is priced at one Birr, and drinking water costs up to 20 Br. The less fortunate gather with yellow jerrycans at public taps, queuing for hours. The problem is hardly a natural disaster but a management crisis.

Addis Abeba’s daily water demand is 1.2 million cubic meters, yet supply barely meets 40pc. The core issues are infrastructure decay, policy stagnation, and regulatory failures. Astonishingly, 35pc of water entering the city’s pipeline leaks away, vanishing into broken and aging networks long overdue for replacement.

The disparity in water availability mirrors inequality. While informal settlements frequently run dry, affluent neighborhoods experience relatively consistent service. In areas such as Bisrate Gabriel neighborhood, wealthy households place large white tanks atop two- and three-story villas, securing reserves beyond what official rationing permits. Others bypass the municipal system entirely, drilling boreholes to access groundwater reserves, a rapidly diminishing resource.

Despite attempts to improve equitable distribution, efforts are undermined by infrastructural neglect and unchecked groundwater extraction, particularly acute in neighborhoods like Akaki-Qality, where wells run dry. Consequently, water access in a rapidly expanding capital has increasingly become a privilege rather than a right.

Addis Abeba’s predicament is neither unique nor insurmountable. Global examples abound of cities overcoming similar challenges through innovative policy and investment.

Singapore, for instance, transitioned from acute scarcity to water sufficiency through its “Four National Taps” strategy, combining rainwater harvesting, desalination, wastewater recycling, and imports. Faced with its “Day Zero” emergency, Cape Town drastically curtailed per capita consumption through aggressive rationing and heightened public awareness. São Paulo adopted tiered pricing schemes and demand-management tactics, successfully reducing excessive usage while safeguarding basic access for the economically disadvantaged.

Such international precedents should offer Addis Abeba’s officials a lesson. Urban water crises result more from managerial inadequacies than resource constraints. Cities confronting scarcity do not have to resign themselves to chronic water shortages. Long-term sustainability emerges clearly through better governance, investments in infrastructure modernisation, and intelligent distribution policies.

Several immediate actions are critical for Addis Abeba.

Reducing pipeline leakage should be an urgent priority. The city’s recent corridor project signals progress, although the 35pc loss rate remains indefensible, given severe unmet demand. Stringent regulation of groundwater extraction is necessary to prevent further depletion, safeguarding reserves for future generations. Equitable distribution should be equally important. Implementing policies akin to São Paulo’s approach, charging higher fees for excessive consumption, could ensure fairness, offering basic water levels to everyone, irrespective of socioeconomic status.

City officials should pursue wastewater recycling and rainwater harvesting, both proven solutions in water-scarce contexts worldwide. Despite these remedies, Addis Abeba’s ongoing struggle illustrates a profound irony. The city’s crisis stems predominantly from mismanagement rather than natural limitations, uncovering a persistent gap between available solutions and policy initiatives.

Today, citizens know better than to use public fountains as bathing spots. But, nearly four decades after the monument’s inauguration, they remain trapped by a problem whose solution lies not in grand gestures but in effective and sustainable governance. At Dilachin Monument, the fountain flows again, joined by numerous colorful displays across the capital, a superficial revival of water abundance. However, beneath the surface aesthetics, the enduring reality remains unchanged. Addis Abeba’s residents continue their daily struggle, thirsty and frustrated.

Mary Armede Done That, Seen It All

Posted on March 30, 2025March 29, 2025 by Digital Editor

A small café near the Vatican Embassy (Apostolic Nunciature) at the turn of the millennium takes me back to my carefree university days. It was my favorite retreat during school breaks, a place where I would sit on the veranda, sip coffee, and immerse myself in Russian literature, all while soaking in the fresh air and serenity of the neighbourhood. Having grown up there, I have a special connection to the area. The ubiquitous adhan (call to prayer) from the nearby Abadir Mosque was the familiar and soothing soundtrack of my childhood. The imposing presence of the Vatican and Indonesian Embassies added a distinct character to the surroundings.

From my childhood bedroom window, I could see the bicolored Indonesian flag fluttering gently above the embassy’s rooftop, a sight that still evokes nostalgia. It is an experience that keeps me grounded due to its close association with my past and the sheer beauty of the scene. Over the years, I took countless photographs of the scene, but capturing the perfect shot was always tricky – branches swayed in the wind, obscuring the flag from view.

The Vatican Embassy’s dense greenery only added to the mystery, blocking any glimpse of the papal residence. Ironically, despite living so close, I never set foot inside the Vatican Embassy in Addis Ababa, yet I visited the Vatican in Rome. We used to joke that the Addis compound seemed larger than the Vatican itself. Of course, anyone who has walked through St. Peter’s Square, the Sistine Chapel, and the Vatican Gardens would know otherwise.

For me, the quiet neighbourhood was an escape, but for one young man, the nephew of the woman who owned the café, it was stifling. Whenever I visited, he would eagerly sit next to me, desperate for conversation. He found the sparsely populated area eerie and longed for the bustling energy of Talian Sefer, where he was from. At first, his weekly trips there for a haircut puzzled his aunt, though she tacitly understood the real reason. He missed the close-knit, chaotic vibrancy of Talian Sefer, a stark contrast to the Vatican Embassy’s spacious stillness.

Talian Sefer, one of the oldest neighbourhoods, has a unique history. It traces its origins to Italian prisoners of war from the Battle of Adwa who remained in Ethiopia, working on roads and bridges. Over time, the neighbourhood became notorious for its poor housing, unemployment, and a thriving nightlife, with brothels and Azmari houses blaring music into the early hours. Yet, for all its rough edges, it fostered a strong sense of community, shaped by shared socioeconomic struggles. The young man, despite growing up in this tumultuous environment, was disciplined and deeply loyal to his roots.

Whenever we spoke, one name kept surfacing: Mary Armede. A legend of Ethiopian folk music, she was a Kirar player, singer, fashion designer, and entrepreneur – a pioneer who defied convention. She introduced cabaret dance clubs fused with Azmari music, an unheard of innovation at the time. Trained by a French woman in cabaret, Mary’s performances – where dancers wore brassieres, thongs, and high heels – sparked outrage. Yet, despite public denunciations, her nightclub was packed with nobility, intellectuals, and the city’s dapper fashionable elite.

The controversy raged for years with Mary in the spotlight for disrupting the status quo and norms of traditional society. Not long after municipal authorities banned cabaret dancing, leading to a decline in her club’s popularity. But Mary was not one to be deterred. She pivoted, dedicating herself to Kirar music, fashion, and mentoring young women in hairdressing and clothing design; an invaluable contribution in a country still awakening from its feudal past.

Mary’s origins are debated. Some say she was born in Wollo and moved to Addis at the age of two; others claim she was born in another run down eclectic Addis district, Doro Manekia. What is undisputed is that she embodied the quintessential Arada – a city girl who had seen and done it all, exuding an effortless blend of modernity, resilience, and social adaptability.

Mary’s social adaptability and resourcefulness were exemplified when the legendary South African singer Miriam Makeba visited her in the later years of her life. By then, Mary had fallen into squalor, living in a single, ramshackle room, stripped of the luxuries she once enjoyed. Mary didn’t want the image of a famous Ethiopian artist marred in the eyes of the foreign celebrity. Unwilling to let Makeba see her in such destitution, Mary devised an elaborate deception.

When Makeba arrived at her doorstep, Mary claimed she was merely visiting her maid, who was sick and wrapped in blankets to invoke sympathy. The ruse worked, Makeba immediately offered fifty US dollars as a gesture of kindness. But Mary’s performance did not end there. She orchestrated a grand dinner at a wealthy friend’s villa, passing it off as her own home. Family photographs were swapped out for her own, and she entertained Makeba in elegant loungewear. Even a chauffeur played along, treating Mary and Makeba like dignitaries, though only God knows how Mary managed to arrange such an act.

Her life took unpredictable turns, often landing her in the thick of historic moments. As a teenager, she witnessed the Battle of Amba Alagi during Italy’s second invasion of Ethiopia in the 1930s. Decades later, during the Ethio-Somali war of the early 1980s, she again found herself in a war zone. One particularly intriguing tale suggests that she attempted to join Ethiopia’s peacekeeping forces bound for Korea in the 1960s but was denied passage at the port of Djibouti.

Mary’s global outlook set her apart. She was well-acquainted with expatriates, absorbing diverse influences in an era when Ethiopia was largely insulated from the outside world. Her song Habibi, a fusion of Arabic, Amharic, and Italian, is a testament to her cosmopolitan spirit. Yet she never lost her local flare. Her mastery of sem ena worq (wax and gold) lyrics – layered with subtleties and double meanings – and her husky, expressive voice ensured her music remained timeless. Decades later, her song was revived as Darling by Martha Ashagari and Teshome Asegid, with Martha’s striking vocal resemblance to Mary was a poignant tribute.

Despite her immense contributions, Mary Armede’s legacy has faded into obscurity. For a woman ahead of her time – who revolutionized Ethiopian entertainment, fashion, and music – there is frustratingly little documentation of her life and work. This neglect is part and parcel of a social failure: a failure to properly archive and honour the achievements of cultural pioneers. The absence of such records deprives budding idealists, innovators and entrepreneurs a role model to look up to.

She was a diva, a poet, a musician, an entrepreneur, a patriot, and a trendsetter in fashion; possibly even more than we can ever know. It is high time her remarkable story is reclaimed from the shadows. A salute to Mary Armede: a woman who truly done that, seen it all.

Maise Boom Displaces Ethiopia’s Native Grains

Posted on March 30, 2025March 29, 2025 by Digital Editor

Nearly three decades ago, the U.S. National Research Council published a landmark series titled “Lost Crops of Africa”, spotlighting the continent’s rich agricultural diversity. Its purpose was clear. The series discussed the indigenous African crops that could potentially feed not only Africa, but the world. While some advances have occurred since, many of these native crops still lag behind non-native industrialised species, largely overshadowed and underdeveloped.

Southwestern Ethiopia vividly illustrates this issue. The region is renowned for its agricultural diversity, with deep-rooted traditions cultivating crops like teff, sorghum, finger millet, maise, and Arabica coffee. Yet today, maise, a crop introduced from the Americas during the Columbian Exchange in the 17th Century, is rapidly replacing traditional staples such as teff and sorghum. The change signals broader environmental, economic, and cultural shifts, reshaping subsistence farming in the region.

The swift adoption of maise in southwestern Ethiopia is not unexpected. Maise readily adapted to existing farming practices based on shifting cultivation, clearing and burning land before seasonal rains. Local processing techniques using wooden pestles and mortars or traditional grinding stones adapted smoothly to maise, making its integration into local diets effortless. Maise-based foods, including bread and roasted maise snacks, are commonplace.

However, the dramatic expansion of maise cultivation has disrupted traditional agricultural patterns. Indigenous crops like teff and sorghum, grown in the region for centuries, are now struggling to compete against maise’s higher yields and shorter cultivation cycles. Environmental factors also increasingly favour maise. Teff, for instance, is highly vulnerable to climate changes, particularly rising fungal diseases and reduced productivity. Maise, by contrast, is more resilient and thus more attractive to farmers facing environmental uncertainties.

Another major advantage for maise lies in the availability of agricultural inputs. Farmers have easier access to improved maise seeds and fertilisers, largely due to substantial support from agricultural research institutes and government programs. This institutional backing has widened productivity gaps between maise and indigenous crops, further affirming maise’s dominance. As maise expands, local biodiversity suffers, diminishing the region’s rich crop variety.

Economic and cultural shifts further compound maise’s advantage.

Traditional crops like teff, sorghum, and millet are labour-intensive, prompting farmers — many of whom balance subsistence farming with other livelihoods — to prefer maise for its relative ease of cultivation. Ethiopia’s economic liberalisation has led to opportunities in small towns, drawing labour away from intensive farming. Thus, maise’s appeal is derived partly from practical considerations around labour availability.

Cultural practices also influence crop choice. While traditional dishes prepared from teff, millet, and sorghum still hold cultural value, maise has become deeply integrated into daily meals, reinforcing its prominence in local agriculture. Farmers often maintain a mix of native grains and maise, but increasingly, maise is prioritised due to its convenience and reliability.

Despite its advantages, maise’s dominance in Ethiopia presents serious risks. Its expansion threatens indigenous crops crucial for maintaining agricultural biodiversity and long-term sustainability. The concentration on maise, primarily driven by higher yields, climate resilience, and better institutional support, has inadvertently undermined the cultivation and development of native species.

This phenomenon mirrors broader agricultural trends across Africa, where non-native crops frequently overshadow indigenous varieties. The push for high-yielding crops like maise forms part of wider strategies to respond to food insecurity, yet this approach often overlooks the importance of Africa’s agricultural heritage. Prime Minister Abiy Ahmed (PhD) pointed out this trend during his acceptance speech for the 2024 Agricola Medal, emphasising Ethiopia’s increased focus on “high-value and industrial crops.” While economically sensible, such prioritisation potentially sidelines crops critical for local communities.

The shift toward maise cultivation in southwestern Ethiopia encapsulates broader trends of agricultural adaptation and shifting priorities. Though maise’s initial adoption offered immediate advantages, with higher productivity, resilience, and ease of cultivation, the long-term consequences should raise concerns. If current trends persist, the rich diversity that once defined the region’s agriculture may face severe erosion, compromising food sovereignty and resilience against future environmental changes.

A more balanced approach, recognising and actively promoting indigenous crops alongside maise, is needed to safeguard Ethiopia’s agricultural future. Such a balance would sustain ecological diversity and preserve the cultural practices intertwined with native crops. Promoting indigenous species could strengthen resilience against climate variability, ensuring long-term food security.

Month: March 2025