Addis Abeba Education Bureau Rolls Out Cluster Classes

Posted on October 26, 2025October 27, 2025 by Digital Editor

Officials of the Addis Abeba’s Education Bureau have embarked on an ambitious experiment to address the city’s deep-seated educational disparities and national exam performance issues.

They want to integrate top-performing students from public and private secondary schools into joint Saturday “cluster classes,” hoping to stimulate peer-to-peer learning, break entrenched divides, and improve the city’s pass rate from a combined 53pc in 2025 to 60pc this year.

The program will identify the top 25 students from grades 11 and 12 in every public and private school, merge them into shared classrooms on Saturdays, and deliver a fast-tracked curriculum across 57 cluster sites. Supplementary before-class and after-class support will also be offered citywide, with a special emphasis on key exam subjects, including math, physics, economics, and history. According to the Bureau, over 42,000 students are already earmarked for participation.

Many in the education sector see it as an unprecedented logistical and pedagogical feat. The program leans on Addis Abeba’s relatively better performance in the 2024 national Grade 12 exams, though still falling far short of the Education Bureau’s ambitions.

“We’ve designed a strategy to meet our goal,” said Tilaye Zewdu, director of General Education Supervision at the Addis Abeba Education Bureau.

According to him, the selection of schools was based on convenience, infrastructure, and other essentials.

“Students from both sectors will study and learn together,” he told Fortune. “The student selection will be based on their learning level.”

Last year, 31pc of students passed the national exam on their own, according to the Bureau. An additional 22pc passed after participating in remedial programs. Now, the Bureau wants to push the pass rate up to 60pc within a year.

The city’s students have also been prominent in national exams. In 2024, around 50,000 students took the national grade 12 examination, a large share of the city’s secondary students. About 10,690 of them passed, resulting in the highest among all regional states and far exceeding the national average pass rate of 5.4pc.

However, success rates vary dramatically from school to school. In 2024, 50 secondary schools across the country achieved a 100pc pass rate on the national exam, while 1,249 schools nationwide failed to record a single passing student. St. Joseph’s School, behind Mesqel Square, is regularly cited as one of the country’s top performers, with its students achieving top marks nationally, particularly in the social sciences stream. Bisrat Gabriel School, off South Africa St., was noted among the top-scoring schools in the natural sciences stream.

Schools with the lowest pass rates are public, serving under-resourced communities. The divide between public and private schools, along with disparities in exam performance and student-teacher ratios, continues to shape the educational reality in the capital, compelling its education officials to implement a “Secondary School Leaving Certificate National Examination Result Improvement Strategy.” It has components of cluster, after-class, before-class, and advisory programs.

The cluster program, which will take place in 57 sites, targets high achievers, while after-class and before-class support sessions will be run in each school under the guidance of teacher-coaches. “Before class” sessions will be held on Monday, Wednesday, and Friday mornings for the city’s top students, offering a curriculum that draws from grades nine to 12.

“It is condensed and well-articulated to support students,” said Tilaye.

The Bureau has named key subjects, such as math, physics, biology, chemistry, geography, economics, English, and history, from the natural and social sciences, with some required for all. More than 42,000 students have already been identified for the program, with plans to reach more than 50,000. The Bureau wants to help students complete courses more quickly and improve exam results.

“This system will help students complete courses within a short time,” Tilaye told Fortune.

For many, the move signals an ambitious shake-up. Costs, including transportation, will fall mainly on families and schools. According to Tilaye, families would take the responsibility, although the policy has already sparked frustration and confusion among parents and private school leaders, who argue that the process was rolled out with little consultation.

“It doesn’t take into account the situation,” said Mesfin Woldeslasie, director of Imperial Academy at General Winget St., near Kolfe Health Centre. “Who is the selected teacher? There is no discussion about that.”

Mesfin, a veteran educator, believes education policy should involve ongoing dialogue. Families, he said, choose schools based on the quality of teachers and the environment. Sending students to cluster classes with unfamiliar teachers raises new questions about consistency and accountability.

“The number of students in each class is small, not like in public schools, to better adhere to students’ needs,” he said.

He raised another issue, such as whether private schools are ready and willing to provide their teachers if selected by the cluster. In recent years, the number of students failing national exams has soared, and some worry that the new system is more about salvaging statistics than solving the real problem.

“What does it mean to pass zero students from a school?” Mesfin asked, recalling that similar “special class” systems had been scrapped in the past due to concerns about student behaviour and discipline. “What kind of governance do we have now? Is it socialist, capitalist, or communist?”

On October 25, school leaders, teachers, and parents met to discuss the rollout. Many argued for a grace period to allow families and school administrations time to adjust, and they pressed officials for further clarification.

For parents like Misganaw Degu, whose daughter attends Imperial Academy, the initiative is an opportunity and a logistical headache.

“It was necessary to consult with the students’ families,” Misganew said. “We decide on behalf of our children. I’m concerned about my daughter going there.”

Misganew concerns are not only academic, but practical. His home in Asco Adissu Sefer is a long journey from the Millennium Secondary & Preparatory School on St. Philipos Road, near Kolefe Atena Tera, where his daughter is assigned. It remains unclear to him if there are assigned transport services, “especially for girls.”

“I’m a construction worker and I can’t spare time to transport her to and from school,” he said.

Misganaw has already paid 1,200 Br for transportation for regular classes, and fears additional costs for Saturday sessions will make things even harder.

Meshesha Kassa, chairman of the Private School Association and founding shareholder of Promise Keeper Academy, in Burayu District, sees merit in the city’s plan, but said it was developed with little input from private school leaders.

“It’s necessary to support and encourage weak students by their peers,” Meshesha said. “That is one of our teaching methods. Class knowledge sharing is more effective.”

However, he remained worried that focusing exclusively on top performers could leave struggling students further behind. The selected students will take the national exam, and the top students may pass.

“How about the others?” he asked.

Meshesha also argued that private schools deserve greater government support, especially in the provision of textbooks and other materials.

“The government must provide education for its citizens, and private schools should be an option, not mandatory,” he said. “This means taking queen bees and expecting others to make honey.”

For some educators, the bigger concern is that the plan is a stopgap. Tesfaye Lega, a former president of the now-closed Kunuz College and a researcher in higher education policy, described the shift as a rational reaction to declining exam results.

“As a country, we’re failing in the national exams,” Tesfaye said. “We must build the foundation at the ground level, not at the top, and focus on teachers’ education and quality.”

He argued that the goal should not be simply to get more students across the finish line with the minimum score, but to build a system that cultivates well-rounded students.

“The education system should not exist merely for passing national exams and entering universities,” he said. “It should cultivate highbrows, not just numbers, aiming for 50pc or 350 score out of the total.”

Addis Abeba’s secondary education system, comprising 31 private secondary schools, serves over 120,000 students in grades nine through 12, recent statistics show, although the exact number may have shifted over the past two years. Public schools enrol the vast majority of these students, accounting for more than 90pc of the total, while private secondary schools take in about seven to eight percent.

Public schools have an average student-teacher ratio of about 18 to one, while private schools maintain similar or slightly smaller class sizes. Earlier grades show that public primary schools have a student-teacher ratio of 26 to one, compared to 19 to one in private institutions. This trend of smaller class sizes in private schools persists at the secondary level, though not as strongly.

Tesfaye supports any measure that brings students together to share study techniques and experiences, but insisted the city’s Education Bureau should address its own shortcomings, particularly in how it selects teachers and works with schools.

According to Tesfaye, the cluster model resembles programs used in other countries, and helping top students maintain their performance while supporting others is a reasonable approach. But he remains wary of poor coordination and inadequate communication with parents and schools.

“How are teachers being selected when there are already challenges in teacher quality?” he questioned. “The new system risks creating divisions between students, and that lasting change requires buy-in from all stakeholders.”

Tesfaye argued that living and learning together is best for mutual support.

“If this approach solves the problem, we’ll see it through its implementation and results,” he told Fortune.

Pay Penalty, Convert Lease Hold, or Cease Business

Posted on October 26, 2025October 27, 2025 by Digital Editor

The clang of metal shutters has gone silent on Addis Abeba’s commercial corridors across Bethel, Alem Bank, Salite Mihiret, Ayat, and Qality neighbourhoods for a few weeks now. Storefronts that once overflowed with produce and merchandise displayed notices stamped by each District’s Land Development Bureau.

The signs – “This place is closed” – do not advertise grand reopenings, seasonal sales or fresh inventory. They accuse traders running small businesses in buildings registered for residential use and warn that businesses may resume only after owners pay steep penalties and convert their leases.

On a narrow balcony near Alem Bank Gabriel Church, Solomon Debalke, 32, sat among baskets of red peppers, cloves and grain while watching the street below. Ten days earlier, local officials from Kolfe Qeranyo District arrived, marked his six-year-old shop and sealed its rolling door. They informed him that the building, which houses 10 stores owned by the property owner, was zoned for residential use and, therefore, ineligible for retail use.

“The landlord was told to convert it to commercial use and pay a huge fine in millions,” Solomon recalled. “But, he can’t afford it.”

The closures have remained down ever since, forcing Solomon to hawk merchandise from the balcony lest the stock spoil or customers forget him. However, he continued to pay his five employees, even as rats chewed through bagged cereals inside the locked shop.

“We can’t work. Our goods are spoiling,” he told Fortune. “How will we pay the rent if we can’t sell?”

Already, he estimated his losses at close to 100,000 Br over the past week. Law-enforcement officers now warn balcony vendors to stop.

“If this continues, I don’t know what else I’ll do,” he said.

The crackdown began last September, when the city’s Land Development Bureau launched inspections across all 11 Districts to enforce the 2011 land lease law. It demands that land be used strictly as described on the lease agreement. A plot designated residential cannot house a shop, nor can commercial property serve as a private dwelling. However, bars replace living rooms, while noisy shops replace quiet homes. For years, the city tried “to manage these cases quietly,” but zoning violations multiplied.

“People live where they should be doing business, and others do business in houses meant for living,” said Zerihun Bikila, director of the city’s Lease Monitoring & Land Transfer. “This creates many problems.”

He argued that the latest campaign is “not about punishment but about restoring order.”

Inspections identified 2,969 houses operating without valid service licenses. Close to 2,581 owners have begun paying fees, generating 343 million Br for the city Administration, part of the 2.4 billion Br officials hope to raise from the crackdown. According to Zerihun, measures begin with public awareness, proceeding to legal notices, and end in legal action, including seizure and sealing, only after noncompliance.

Property owners may continue to live in residential units if they pay a one percent penalty on the current lease value. Alternatively, they can switch the lease category to mixed use, provided that the change meets with city plans. Those who pursue conversion are required to pay 31pc of the adjustment cost within eight months, and the balance over 20 years.

“The purpose of this isn’t to take people’s money but to enforce the law,” Zerihun insisted.

Essential services, such as food shops, pharmacies, banks, and health institutions, are exempt from closure. However, Zerihun acknowledged that confusion in enforcement persisted.

“Some property owners and tenants blame each other,” he said. “Many didn’t take it seriously. Now that enforcement has started, they act surprised.”

For businesses and property owners, the city’s latest measures can seem incomprehensible.

Abdulkadir Kemal, a former air force officer battling stage-three thyroid cancer, lives near Taqwa Mosque around Bethel Roundabout. His two-story house, built on a 150Sqm plot, shelters his family upstairs while the ground floor is rented to a bank branch and a dairy shop. The lease designated the property residential, a contradiction with the city-issued construction permit five years ago, which labels it mixed-use.

“When I got the building permit, it clearly said ‘mixed use’,” he told Fortune. “The city permitted me to operate shops.”

Abdulkadir pays income tax and VAT on rent, up to 30pc of his earnings each month. Last week, officers taped a notice on his door, urging him to convert the lease or face penalties. At the Qolfe Qeranio District office, he learned he should settle 2.4 million Br before the end of May, 85,000 Br as a one percent fine and 8.5 million Br for 20-year mixed-use lease rights.

“And now, they’re treating me like I committed a crime. We bought this house legally, with our savings. Now they’re trying to take our money in the name of the law,” he said. “This isn’t government work. It feels like robbery. All I’m asking is for them to adjust the amount and give us more time.”

Abdulkadir feels he can spare perhaps 240,000 Br, not millions.

A few kilometres away, Amir Mohammed confronted the same bind. He represents his elderly parents, owners of a three-story house in Bethel whose six shops on the ground floor were sealed two weeks ago. District officials told him that converting the lease would cost 11 million Br, with 31pc, roughly 3.4 million Br, due by May.

“They keep asking what happened,” Amir said of his parents. “I don’t even know what to tell them.”

Without the rent, the family’s sole income evaporates. Each day, he trudges to district offices seeking clarification. If he closes the shops, his parents lose income. If he tries to pay, he cannot afford it.

“We just want time, not to evade payment,” he told Fortune. “But to understand what’s happening, everything is happening too quickly.”

Ashenafi Birhanu, communications director at the Addis Abeba Trade Bureau, supports the closures. His office issues trade licenses but does not check zoning. He counsels property owners to rent only to tenants whose activities match the lease and implores traders to verify a property’s category before signing contracts. Both, he said, share responsibility for the prevailing chaos.

“Property owners should promptly correct their lease status and pay the necessary fees,” he said, urging business owners to resume operations swiftly to limit economic damage.

However, economists warn of broader fallout. Mered Fikireyohannes, CEO of Pragma Capital, noted that more than half of Ethiopia’s economic activity occurs in the capital and that roughly 45pc of its residents earn a living in services, most of whom rely on leased property. About 70pc of the city’s 270,000 businesses are small or medium-sized, major employers and taxpayers.

“Shutting them down will result in widespread unemployment and will undermine the city’s revenue base,” he told Fortune.

Recent statistics showing 37,000 licenses in the city were returned or revoked in 2024, compared with 99,000 issued that year. Mered said “the recent action of the city Reduced revenue collections at the Addis Abeba Revenue Bureau and the Federal tax authority would strain budgets”.

“If regulatory enforcement disrupts livelihoods without clear transition measures, investors and residents may lose confidence in the city,” Mered warned. “Reform on this scale needs consultation, public awareness and gradual phasing to ensure market stability.”

It is a voice of caution echoed by other experts, such as Mustofa Abdella, economist and consultant at Zafer Plus Business & Investment Consultancy Services. He agreed that legality alone does not guarantee fairness. Many small businesses, he observed, operate on thin margins and cannot absorb sudden closures, relocation costs, inventory losses or the time needed to secure new premises. Perishable goods spoil immediately, while damages go uncompensated. Because advance notice was insufficient, traders could not cash stock or recover investments made to outfit rental spaces.

Employees lose wages, while property owners forfeit rent. Supply chains break, and communities lose access to goods. The sudden jolt, Mustofa fears, could push entrepreneurs into the informal market, slashing future tax revenue. He advocated payment schedules extended beyond eight months, subsidised or tiered fees for smaller properties, and grace periods of six to 12 months. Temporary licenses, he argued, could let compliant businesses operate while property owners convert leases.

“An appeals process would buffer hardship cases and balance regulation with economic stability,” he said.

Veteran lawyer Daniel Fikadu frames the campaign as a breach of constitutional and international property rights.

“Right to use land is protected under agreements Ethiopia has signed,” he said.

He contended that penalties should be proportional to financial capacity and that enforcement without advance public notice is unjust. Lacking clear guidance, residents cannot comply. High, unexpected fees, in his view, will be challenged and likely overturned in court.

Officials counter that exemptions and payment plans already temper the burden. Essential services remain open.

“We understand people’s concerns,” said Zerihun. “We’ve made sure that essential services are not disrupted. Our goal is to reduce tension, not create it.”

Paying one percent to continue as a residence, they argue, is less than the cost of long-term mixed use. Yet on the streets, the tension is real, with doors closed, tenants anxious, and Business owners perplexed. Traders gathered outside sealed shops to compare notes. Some passers-by paused to read the city’s notices, shaking their heads before moving on. Others approached balcony vendors like Solomon and bought peppers in small gestures of solidarity.

Inside locked storefronts, grain bloated and weevils spread. Banks that once served neighbourhood customers reroute clients to distant branches. Dairy goods curdle in the summer heat. Shop assistants wait without pay, unsure if employment will resume or vanish. Rats gnaw through sacks, and mould spots spice that once perfumed the air. The hum of commerce that once floated over Alem Bank, Bethel and Ayat has faded into a low buzz of uncertainty.

The city’s campaign shows no sign of slowing. Zerihun disclosed that inspectors will keep sweeping neighbourhoods to identify misuse and levy fines.

“We’ll keep intensifying our work at the city level,” he said, reiterating the revenue target framed as part of enforcing proper land use.

According to him, the Bureau has observed neglect, with some properties sealed without anyone appealing, signs that absentee property owners or dormant businesses are present.

“That shows either negligence or that the properties were not actively used,” he said. “Enforcement must apply equally to everyone.”

Equal application, however, collided with unequal means. The penalties may sting large developers, but could devastate a single-store proprietor. A down payment for lease-holding conversion may be routine for a chain retailer, yet impossible for an ageing couple living on rent. Without an appeals board and tiered fees, experts such as Mustafa argue, equity remains theoretical. And without a longer runway, more shops may fail, shifting businesses underground.

The closures rumble beyond traders and property owners. Suppliers who extend credit to small grocers await payment. Transport operators lose loads. Electricity consumption dips in commercial blocks while residential circuits overload from repurposed appliances. Each shock ripples through the urban grid.

The Rules Multiply. So Does the Confusion, and Uncertainty

Posted on October 26, 2025October 25, 2025 by Digital Editor

The regulatory machinery is on overdrive. In only two years, no fewer than 35 new proclamations and directives have been issued from the Parliament, federal ministries, and regulatory agencies. Whether it is community insurance or capital market thresholds, lease agreements or informal burial clubs, few areas of public or private life have gone untouched.

It would be tempting to interpret this hyperactivity as a long-overdue modernisation drive. After all, Ethiopia has committed itself to a raft of reforms under an IMF staff-monitored programme, with ambitious targets to broaden the tax base, deepen capital markets, and prepare the economy for foreign investment. But behind the bureaucratic velocity lies a more sobering truth of institutional incapacity, legal incoherence, and a public trust struggling to keep pace.

Take the Ministry of Labour & Skills’ draft directive that sorts foreign-employment agencies into three tiers. Offices should meet size standards, file quarterly digital reports, and obey caps on the number of workers they may place abroad. Its officials, commanded by Muferihat Kamil, insist they are safeguarding migrants, but operators mutter about compliance costs. The Addis Abeba Revenue Bureau, meanwhile, ordered property owners to register leases and collect rents only through banks or electronic channels. After a flat 35pc deduction, tax rates climb from 10pc to 35pc, and inspectors may audit ledgers or impose surcharges on empty flats left off the books.

Regulators of Ethiopia’s fledgling capital market joined the fray. The Ethiopian Capital Market Authority (ECMA), under Hanna Tehelku, raised the minimum paid-up capital for transaction advisers to eight million Birr for those whose clients hold more than 250 million Br, and five million Birr for the rest. Public companies should file detailed share registers. They face penalties for late filing. Critics grouse that the Authority relied on a 2021 law that has yet to be amended, breeding doubt and uncertainty.

Laws governing the use of land, the country’s most emotive asset, are also being rewritten. A bill before Parliament would phase out urban freehold in five years, shifting all plots to leasehold and linking cadastral records to a digital registry. The plan is clear titles; the fear is displacement. Low-income residents and peri-urban farmers ask who would set compensation and how often lease rates would be reviewed.

The Ministry of Finance has broadened the tax net, demanding that every professional, lawyer, consultant or otherwise, register for value-added tax (VAT), regardless of turnover. The Federal Bar Association retorts that legal services are not mere commerce and vows to sue. A separate directive scrapped the turnover tax for firms earning more than two million Birr, giving them only 30 days to embrace VAT. Small businesses complain of crushed cash flow and hurried paperwork.

In Addis Abeba, community-based health insurance shifted from a flat 1,500 Br annual fee to income-linked premiums. Most households now pay 2,000 Br, while middle-income families pay 6,900 Br, and the well-off pay up to 10,500 Br. Subsidies cushion the poorest, but many families baulk at the jump.

The financial system is reforming at speed, with the National Bank of Ethiopia (NBE) ditching its fixed weekly forex rate, letting banks quote freely, and requiring exporters to repatriate half their earnings within 30 days. After 90 days, any spare hard currency should be sold back to the market, a rule coffee and flower exporters say ignores their long production cycles.

Ownership, too, is under new scrutiny. A draft directive forces NBE approval for any share transfer above two percent of a bank’s equity. Foreign buyers need “no-objection” letters from their home regulators. Aspiring foreign banks would pony up five billion Birr in paid-up capital and produce a recent credit rating. Existing lenders have eight months to file self-rescue blueprints for future crises, classify every loan into five buckets and provision accordingly. Bankers warn that the timetable alone could inflate non-performing-loan ratios.

Insurers have their own headaches, too. A risk-based capital regime, issued in April last year, sets fresh thresholds and demands that firms adopt IFRS-17 by 2027. Executives grumble about shortages of actuaries to crunch the numbers.

Tariff policy is no calmer, either. Import duty on peanuts fell from 35pc to 15pc, but cartons and plastics jumped from 15pc to 25pc. Fridge assemblers saw duties on semi-knocked-down kits rise, while completely knocked-down refrigerators and EV batteries became duty-free. Officials say they are nudging local manufacturing, but domestic manufacturers say costs are rising unpredictably.

Utilities have not escaped. Since September 2024, the Ethiopian Electric Utility (EEU) has levied 15pc VAT on monthly electricity usage above 200kWh, as well as on water usage above 15 cubic metres. In July, the tax was back-dated for prepaid customers, sparking fury. A 0.5pc regulatory levy and strict monthly transfers to the Ministry of Revenues heap yet more paperwork on power and water suppliers.

The Ethiopian Investment Board has opened most wholesale trades, except fertiliser, to outsiders, provided they modernise logistics. Yet, approval procedures remain hazy, leaving applicants in limbo. Fresh directives on tax penalties offer waivers of up to 90pc if offenders pay quickly, but firms still complain of heavy-handed audits and capricious fines. A procurement order clumps more than 40 state-owned enterprises into a central purchasing pool using electronic platforms. Managers worry about a clunky system and new layers of sign-off.

Even Ethiopia’s informal safety nets are being penned into law. Edirs now enjoy legal personality and may pool funds for investment on the forthcoming Ethiopian Securities Exchange (ESX).

Much of the rush in the barrage of laws and directives comes down to money. Federal government officials pledged to the International Monetary Fund (IMF) that they will widen the tax base and shore up the banking system. But their zeal appears to bring tight deadlines, retroactive levies and hardly any public engagement before enforcing these laws. Banks, SMEs and households all grumble about ambiguous wording and abrupt roll-outs.

They have reason. Studies across rich and poor countries alike show that excessive red tape can swallow up to one-fifth of labour input in some industries. Cutting it could lift productivity by eight percent. A World Bank survey finds that every 10pc rise in regulatory burdens trims GDP-per-capita growth by 0.5 points annually, while cumulative rules can knock two points off national GDP growth each year. In countries where small and medium firms generate 35pc of output, such burdens shave half a point off annual GDP.

Digital compliance tools, by contrast, can cut costs 20pc to 25pc without dulling oversight.

Beyond the spreadsheets lurks a subtler danger of unpredictability. Addis Abebans tell tales of traffic violators (drivers with government, military, police, or diplomatic plates) or dark-tinted SUVs cruising past red lights unhindered and committing blatant acts on the roads. They seem protected by invisible shields of influence, causing cynicism to spread the belief that rules apply only to the rule-bound.

The Ministry of Education set standards for class size and teacher training, yet many schools flout them and still pass inspection. Directives barring bars and gambling dens near schools vanished after a burst of headlines. Road projects uproot some homes while sparing others touched by unseen patrons. The sense that enforcement is negotiable corrodes trust faster than any new proclamation can restore it.

None of this is meant to discount the ambition behind the reforms. Undoubtedly, liberalising forex, opening wholesale trade and imposing risk-based capital on insurers could all boost investment and stability. The challenge remains to moderate velocity with capacity. Rules should be clear, timelines realistic, and data systems functional. Officials need training, while courts should review litigations arising from discontent and offer those disgruntled a recourse to challenge errors.

Where compliance costs threaten to kill the patient, proportional regulation and digital portals can ease the pain.

For now, the rule book grows thicker by the month. Each directive carries hope of a tidier economy and dread of a larger bill. Writing new laws is easy, but applying them evenly is hard. Success will depend on whether regulators can match their appetite for reform with the transparency and predictability that businesses, and citizens, need to thrive.

Investment Shifts from Blanket Tax Breaks to Performance-Based Incentives

Posted on October 26, 2025October 27, 2025 by Digital Editor

The federal government is making a landmark shift in its investment incentive regime, moving away from broad-based tax holidays toward a performance-based and sector-specific framework. The changes are driven by an attempt to rationalise the incentive structure while combating regulatory abuse, but they are not without controversy.

For years, policymakers had dangled generous tax exemptions and customs waivers as bait to attract foreign and domestic capital. However, officials now argue that the system was rife with abuse and lacked sufficient oversight. Federal officials characterised the investment overhaul as both a corrective measure and an attempt to align Ethiopia with best practices from peer economies in the region.

Mulay Woldu, director of Taxation at the Ministry of Finance, on King George VI St., was candid in his critique, citing six years of internal review that identified 35 institutions that have provided incentives.

“Are the incentives being used properly?” he wondered. “No one supervised them. The system was vulnerable to abuse.”

Federal officials concluded that previous incentives had focused on short-term ventures, rather than encouraging investment in durable, machine-operated industries.

“Tax holidays are no longer available,” Mulay declared, confirming that the benefit will be revoked along with the broader regulatory overhaul.

He attributed governance issues and persistent bureaucracy to core challenges undermining the sectors targeted by the incentives. According to Mulay, these structural weaknesses needed to be addressed if Ethiopia was to build a sustainable investment environment.

The federal government has revised the investment law six times since 1992, with each revision liberalising sectors, expanding incentives and revising investor rights and obligations. The latest investment proclamation, issued five years ago, overhauled the investment regime, opening the service sector to foreign capital, clarified the negative-list approach, and reduced the number of sectors exclusive to the state, such as the telecom sector.

At a meeting held inside the Finance Ministry on October 21, 2025, participants pressed officials for clarity on the new revisions.

While eliminating tax holidays is bound to reduce their appeal to some investors, federal officials pledge to replace them with more targeted, measurable, and enforceable incentives. Investors hoping to tap into government incentives for expanding their enterprises should now obtain new investment permits and register each expansion project under the business license, regardless of whether the same investor already operates in the sector.

Each type of investment will be licensed independently, a change that industry insiders say could reshape how companies grow and how incentives are distributed across the economy.

Some industry leaders, such as Mekonnen Sata, Lucy Farming’s chief commercial officer, voiced cautious optimism. He acknowledged the authorities’ objective of boosting productivity, noting that the revised incentive package offers greater benefits than the previous one. But he also warned the system could become bogged down in bureaucracy, stifling the ease of doing business.

“Redundancy will linger under this system,” Mekonnen told Fortune. “The ease of doing business will be restrained.”

Lucy Farming currently operates a 3,500hct plantation in Omo and another 1,500hct in Arbaminch, where the company now seeks to venture into agro-processing, a step that will demand a new license under the revised regulations.

Federal officials argue that the changes are necessary to fix problems in the old system. Wasihun Abate, a tax policy advisor at the Finance Ministry, believes existing investments and new expansions are now treated as distinct entities, each requiring its own license to receive incentives.

“A new investment permit is mandatory for expansion to receive incentives,” he said. “There is no need to merge the past system with the new one.”

Mekonnen remained concerned that the new requirement to obtain a separate investment license for each expansion could drive up costs and administrative burdens. According to Mekonnen, the process would run more smoothly if less paperwork were required and authorities focused on facilitating rather than complicating business expansion.

“When we apply for a license, there’s a disconnect between what the system says and what you actually do,” he said. “We’ll fall victim to subjective causes.”

Wasihun argued that the former incentive regime was ineffective, enabling investor abuse and failing to serve public interests. The new framework, he said, is designed to address these issues and broaden access to incentives for previously excluded sectors. But some industries remain outside the scope of incentives, including the alcohol beverages sector.

“When we say incentives, everyone thinks of tax breaks, but it does not only mean that,” Wasihun said. “It’s about supporting and initiating investors to invest more, be productive, and be effective. It isn’t for retailers to benefit from.”

Wasihun disclosed new forms of incentives, including changes to duty-free and customs privileges, which, he argued, are intended to encourage investment.

“The government shouldn’t lose to provide incentives,” Wasihun said.

Investment incentives are economic benefits governments provide to encourage investment. These can take the form of tax exemptions, deductions, or concessional loans, typically based on the size, location, or performance of the investment. The scheme often entails the government forgoing potential revenue in the hope of stimulating economic activity.

Bereket Alemayehu, an expert in economic law and policy, observed that governments grant incentives to encourage both new investment and expansion, which are believed to benefit the broader economy. The revised incentives package, he noted, offers substantial tax and duty-free benefits designed to attract large-scale capital, particularly to Special Economic Zones (SEZs) and the technology sector.

The most notable aspect of the new policy is a reduced business profit tax rate of five percent for up to 15 years, targeting mainly special economic zone developers and startups. Other sectors, such as enterprises and exporters operating in these zones, will benefit from preferential rates between 10pc and 15pc. SEZ entities are allowed to import capital goods, construction materials, and spare parts entirely free of customs duties and taxes. There is also a five-year dividend tax exemption intended to improve investor returns for startups.

Perhaps the most valuable incentive, a one-time investment capital deduction, is reserved for mega-projects with an investment threshold of one million dollars or more. SEZ developers and sub-developers should invest at least 75 million dollars to qualify for these top-tier incentives.

Tewedaj Mohammed, head of the Legal Affairs Department at the Ministry, disclosed that the new regulation specifies which sectors qualify for tax incentives, including special provisions for mining, petroleum, natural gas, and geothermal investments. According to him, these reforms were introduced alongside the new income tax proclamation, signalling a shift to a performance-based incentive system.

“No incentive will be given to those who merely open a business,” Tewedaj said. “It focuses on manufacturing, export, and importing for investment. The incentives are granted to new investments that create additional capacity or value.”

Expansion projects can also access customs duties and tax incentives on capital and construction equipment if they are implemented in phases under a performance agreement, which officials will monitor. According to Tewedaj, SEZ developers and companies enjoy special long-term reduced income tax rates and customs privileges, while startups and startup ecosystem developers receive lower income tax rates and exemptions from dividend and capital gains taxes.

“The ordinance provides a comprehensive package of incentives to attract and promote investment, including both tax and customs incentives,” Tewedaj said. “Investors can benefit from an investment capital allowance, which reduces taxable income based on qualifying expenditure. A reduced income tax rate is also available to promote targeted sectors and activities.”

Other features include exemption from the alternative minimum tax, which lightens the tax burden for eligible entities, and exemptions from dividend and capital gains taxes, which encourage reinvestment and capital formation. A tax credit against payable income tax is also available, designed to help investors offset their tax liabilities and improve project viability.

For all the talk of new benefits, the business community remains cautious.

Yohannes Abebe, an advisor at the Ethiopian Horticulture Producers & Exporters Association (EHPEA), saw the revised incentives are an improvement but that more could be done to support investment expansion.

“When an investor reinvests, it should be supported, not constrained by additional requirements,” Yohannes said. “It might not be a major obstacle if acquiring a new license were a simple task, but in my experience, it is encumbered by bureaucracy.”

Yohannes argued that requiring investors to secure a new permit for every expansion was excessive, especially given the limitations they have already cleared. He disclosed that several horticulture firms plan to expand, some by as much as 200hct, but now face the prospect of having to meet new licensing requirements to access incentives.

“Reinvestment comes from capital expansion; the government must support that, not add bureaucracy,” Yohannes said.

He did, however, applaud the clarity on land development. In the past, land could be expropriated if investors failed to meet their business plans. Now, phased development agreements can be arranged, with official inspections to ensure compliance.

Bereket, the expert, believes that the success of any incentive program depends on robust legal and institutional frameworks. Without these, he warned, incentives are liable to abuse, potentially benefiting those who do not deserve them and harming national interests and fair competition. Oversight, he said, is an essential part of the government’s role in regulating investments.

Bereket observed that the licensing system has been digitised to ensure that “expansion” is verified. The investment law defines expansion as a 50pc or greater increase in production or service capacity, or a 100pc or more increase in product or service lines, or both.

Sani Tuke Jonja, an international Investment advisor and founder of Optimum Logistics, sees potential in the revised law but is concerned about the potential increase in bureaucracy.

“Incentives are decreasing now,” Sani said.

He warned that reducing incentives could slow manufacturing activity and ultimately raise costs for consumers, especially amid the country’s foreign exchange constraints.

“If investors don’t receive support, investment will be severely affected,” he told Fortune. “Investment incentives are supported in all countries.”

Sani also raised concerns about agricultural incentives, stating that the sector is the livelihood of 80pc of Ethiopians and calling for greater focus on agro-processing.

“Agriculture, manufacturers, and exporters must be given priority,” Sani argued.

However, he conceded that if investors fail to fulfil their commitments, any benefits received should be revoked and the government should strengthen inspection and enforcement. Investing in Ethiopia, Sani observed, involves overcoming bureaucracy across utilities, customs, banks, and government agencies. He urged the Finance Ministry to centralise processes to cut red tape.

“If the Minister prepares regulations but the districts fail to implement them, that’s another headache for investors,” Sani said.

Central Bank to Put a Leash on Power Plays in Banking

Posted on October 26, 2025October 29, 2025 by Digital Editor

The National Bank of Ethiopia (NBE) is preparing to issue a directive that will fundamentally alter how bank shares are transferred and owned.

For the first time, there will be a limit, two percent, on how much of a bank’s share capital can be transferred without NBE’s explicit approval. If implemented, it will be a major departure from the laissez-faire framework that has defined the financial sector for decades.

Regulators say the directive seeks to address long-standing concerns about opaque ownership structures, regulatory arbitrage, and the risk of money laundering. Until now, there has been little regulation of how shares in banks are bought and sold, an absence that has left a critical oversight gap and raised questions about the integrity of ownership structures. The draft directive sets out a clear approval process for significant share transfers, particularly when influential shareholders are involved, and gives regulators considerable new supervisory powers.

Under the new rules, banks will be obliged to collect detailed information on any shareholder looking to transfer shares. Shareholders with substantial holdings will be required to disclose the source of funds used to buy shares, while buyers will be required to provide audited financial statements for the previous three years.

The NBE’s new oversight powers extend even further. After a transfer is approved and all the paperwork appears to be in order, the Central Bank steps in if it finds that the transaction was based on false information. The Bank may reject, modify, or reverse the transfer and may demand additional information depending on the specifics of each case.

Banks will also be required to promptly report any developments that could affect the suitability of a significant shareholder. If a share purchase results in an investor obtaining significant ownership, the bank would submit all supporting documents to the Central Bank, including evidence of the source of funds, and details of any links between the shareholder and the bank.

Foreign institutions face even stricter requirements. They will need to provide incorporation documents, approval from their governing body, detailed ownership information, and a no-objection letter from the regulatory authorities in their home country. The share transfer process would be accompanied by a purchase agreement contingent on the NBE’s approval, which would spell out the purpose, amount, form, and duration of the transaction, its effects on the bank’s capital and voting rights, and any agreements between the parties. The intended role of the new shareholder in the bank’s governance would also be disclosed.

The NBE will have 45 days to decide whether to approve or reject a transfer after all required documents are submitted. Approvals can be conditional or unconditional.

Industry leaders have largely welcomed the move as a necessary step to modernise the banking industry.

Tadesse Hatiya, the president of Sidama Bank, sees the Central Bank’s involvement as creating a healthier process for share transfers. He noted that some shareholders do not necessarily buy shares for profit alone but may form alliances to exert undue influence on a bank’s decision-making.

“There has to be oversight from the National Bank to prevent improper practices and protect corporate governance,” he said.

According to Tadesse, verifying the source of funds used for share purchases requires banks to obtain comprehensive financial information from buyers as a crucial measure to ensure that shares are bought with legitimate funds, thereby reducing the risk of money laundering.

“The obligation for banks to request comprehensive financial information will help ensure that purchases are made with legitimate funds,” he said.

This sentiment was echoed by Demissew Kassa, secretary general of the Ethiopian Bankers Association. He hopes the directive will help reduce or eliminate the risk of money laundering and promote a transparent and healthy environment for share transfers.

However, Tadesse acknowledged a potential downside, noting that Central Bank intervention could introduce bureaucratic delays. He warned that shareholders who need to sell quickly because of an urgent financial situation might find their options limited by the requirement for prior approval, potentially restricting liquidity and complicating timely transactions.

“Whether the decisions can always be made promptly is the question,” he said. “If the process is efficient, regulatory oversight could ultimately strengthen the sector.”

Hijra Bank President, Dawit Keno, supports the directive, describing the new rules as a way for banks to benefit from stronger regulatory protection. He noted that the Central Bank’s decision to set the threshold as stringent but argued that, once the system is well established, the cap could be raised to five percent in the long run.

Not all stakeholders are convinced. Worku Lemma, a financial expert, criticised the directive as overly rigid and difficult to enforce. He argued that banks should be able to manage share transfers internally and inform NBE after transactions.

“The pre-approval process creates unnecessary red tape that could slow transactions and discourage foreign investors, reducing the flow of capital into the country,” he told Fortune. “Banks already have strong incentives to monitor their shareholders to maintain the health of their institutions. Heavy intervention from the National Bank is unnecessary.”

Ameha Tefera (PhD), another finance expert, sees both the proposal’s strengths and weaknesses. While he agreed that the directive could help prevent monopolistic tendencies in the banking industry, he urged that setting the bar for a “strategic shareholder” at two percent is far too low, particularly for smaller banks.

Foreign ownership is another area in which the NBE has set clear boundaries. According to the draft rules, a foreign individual will be allowed to own up to seven percent of a bank’s shares directly, while a foreign company can own up to 10pc. Strategic investors will be permitted to hold up to 40pc. However, total shareholding by all foreign nationals and foreign-owned Ethiopian entities cannot exceed 49pc, and overall direct and indirect foreign ownership is capped at 20pc. These measures, the Bank says, are meant to strike a balance, encouraging foreign participation in the banking industry while ensuring that domestic shareholders continue to exercise majority control and governance.

Eviction Edict Leaves Book Vendors Adrift in Cultural Landmark District

Posted on October 26, 2025October 27, 2025 by Digital Editor

A community of booksellers shadowing the Ethiopian National Theatre has been jolted by a sudden eviction order, stirring uncertainty over their livelihoods and the literary life of the capital. The decision, issued following a meeting held by the Qirqos District’s Woreda 07 Administrative Office on October 18, 2025, has left bookstore owners along Gambia Street scrambling for answers.

For over two decades, this stretch near the historic theatre has been a sanctuary for book lovers, a warren of corrugated metal shops hawking everything from dog-eared children’s fables to dense political history. Now, these container shops face removal despite vague instructions and no written timeline, compounding the distress of proprietors already facing a volatile market.

Booksellers complained that the order came abruptly, leaving them uncertain about their next move and the future of their livelihoods.

Bitweded Frew, a fixture in the area’s book trade, is among those most affected. A father of three, a son in fifth grade, two daughters in third grade and kindergarten, Bitweded has run his bookstore for over 20 years. His shop, modest but well-known, has sustained his family and paid for his children’s education, despite the constant pressures of a market that seldom delivers windfalls.

“The bookstore business isn’t great,” he told Fortune. “But, it isn’t terrible either. We may not become wealthy, but we earn enough to support our families and educate our children.”

However, the business is unpredictable

“One day we can sell many books, and the next day we might sell none,” he said.

For Bitweded, the prospect of eviction is not only a business setback but a personal crisis. Living in a rented home for 6,000 Br a month, a sum that stretches his finances, he fears he will have nowhere to store his books if forced to move. The rent for the container shops has remained at 60 Br a month, but finding a new place could mean rents soaring as high as 40,000 Br, an expense far beyond his reach.

“I don’t know what I am going to do,” he told Fortune.

The booksellers are pleading for clear timelines and more guidance from local officials, arguing that moving thousands of books requires preparation and, ideally, alternative spaces. Without this, they say, their families’ incomes are at risk.

Chemere Abate, who has run a bookstore in the same area for 16 years, echoed these fears.

“The eviction order was issued abruptly,” he said. “The authorities didn’t provide any official letter or formal documentation explaining the decision.”

Chemere’s shop is the sole source of income for his family of five children, one in kindergarten. He has financed their education and household expenses from the shop’s earnings. He worries about what will happen to his business and his family if forced to leave, with no clear plan for relocation.

“We’re taxpayers,” he said, recalling the 16,000 Br he paid for the last fiscal year. “This isn’t just our store. It’s our home where we earn money to support our family.”

Like many of his peers, Chemere was unaware of any previous discussions about the future of the bookstores.

A similar story is told by Yosef Getachew, who has operated his bookstore for 13 years. The business is not lucrative, but it is enough to cover the essentials for his family, including two children in sixth grade and kindergarten, as well as a widowed sister and her seventh-grade son. Yosef pays 10,000 Br monthly rent for his home, covered by the bookstore’s proceeds. Local officials told him that the stores in the area do not meet city standards. Yosef and other shop owners argue that if the issue is the containers’ appearance or condition, they would be willing to invest in renovations rather than be forced to move.

“It isn’t fair to push us away,” he said. “We can’t afford to rent another bookstore. We need an alternative solution.”

These shops stock a wide array of books, including educational, novel, and children’s titles, as well as works on Ethiopian and world history. The shop owners believe their services are crucial to the community, providing access to reading materials that support learning and intellectual growth.

Local officials, however, argue that the decision to clear the area was not arbitrary. According to Neima Loba, general manager of the Wereda 07 Administrative Office, the bookstores were built as container structures along the fence of a property owned by the Federal Housing Corporation. It was formerly leased to the Ethiopian National Lottery Administration (ENLA) but is now being redeveloped by a new proprietor. Neima sees that the site’s changing status has led the containers to no longer meet the planned upgrades. A letter from the Corporation advised the local administrative office that the structures needed to be removed.

“We aren’t making them move right now,” she told Fortune. “We’re giving them some time to prepare.”

However, five bookstalls had already been moved from their previous locations in front of a building entrance that was being blocked. The remaining 14 are set to relocate after a request from the Housing Corporation to clear all container shops from the perimeter. The containers were initially authorised for five years but have remained for over 20 years.

“The structures don’t reflect the evolving look of the city,” Niema told Fortune. “Adaptation to new urban standards is required.”

According to Neima, the recent meeting was called to allow booksellers to prepare for the changes. She encouraged booksellers with questions or complaints to approach her office directly, noting that no formal grievances had yet been received.

Kibru Kefyale, a book distributor for Jafar Bookstore near Tiqur Anbessa Hospital, sees a broader trend at work. He expressed concern about the rising frequency of bookstall removals in the city, noting that the industry is feeling the impact. In the past, books were sold in front of Parliament and other prominent sites, but now many bookstores are being pushed to the margins or forced out of the city altogether. The result is hardship not only for business owners but also for their families.

“If this continues, I worry about the future of books,” Kibru told Fortune. “This situation not only affects bookstore owners but also impacts us, book distributors and writers alike.”

Ayanaw Yeneneh(PhD), who has managed Universal Business Consulting for five years, believes the moment calls for a different approach. He considers the bookstores vital economic actors that support families and promote education.

“These stores serve as entrepreneurs for many people,” he said. “They support numerous families and, more importantly, they promote a culture of reading within society. It is essential to protect that contribution.”

Ayanaw argued that rather than evicting the bookstores, the city should provide legal and administrative support, such as offering affordable rental spaces in other areas to ensure the continuity of business. He argued that short eviction notices place a heavy burden on the owners. He urged city officials to offer financial and emotional support before displacing them.

“Alternative solutions can make a meaningful difference,” he said.

Despite their worries, most bookstore owners say they will follow official instructions if authorities offer a viable relocation plan or support. For now, the dominant feeling is uncertainty, with the fate of these decades-old bookstalls hanging in the balance.

Ethiopian Airlines Turns to Homegrown Biofuel in Bold Push to Green the Skies

Posted on October 26, 2025October 26, 2025 by Digital Editor

Ethiopian Airlines is embarking on a potentially transformative shift in its fuel supply chain, targeting a five percent replacement of imported fossil-based aviation fuel with domestically sourced Sustainable Aviation Fuel (SAF).

Experts say this bold initiative, if realised, could place Ethiopia in the vanguard of a small group of African countries building indigenous biofuel capacities. Yet, the move, while environmentally commendable, is fraught with commercial, logistical, and structural uncertainties that could determine its viability.

The core of the SAF push rests on a tripartite collaboration between Ethiopian Airlines, the Ethiopian Minerals Corporation (EMC), and Sunbird Bioenergy Africa, a London-based renewable energy developer with experience in large-scale bioethanol production in Sierra Leone and Zambia. Their partnership lays out plans for a biorefinery to produce 40 million litres of SAF and 60 million litres of bioethanol annually. The primary feedstock will be cassava, complemented by molasses from sugar factories such as Metehara, Fincha, and Kessem.

The project is touted as part of a broader energy transition strategy in which biofuels will serve multiple sectors, including clean cooking, transport fuel, and aviation. Its success would not only substitute 100 million dollars in annual fuel imports but also create 10,000 jobs across a 10,000hct farming zone. With further scaling, Sunbird envisions Ethiopia hosting up to 20 bio-refineries.

Globally, SAF is expected to contribute 65pc of the emission reductions needed for the aviation industry to reach net-zero emissions by 2050, according to the International Air Transport Authority (IATA). Yet, production remains nascent, with Africa accounting for a negligible share. Only five active projects and 0.6 million tonnes projected by 2030. Ethiopian Airlines has already dipped its toes into SAF, using a 30pc SAF blend for an Airbus A350 delivery flight in 2023, but scaling up remains constrained by several issues.

According to Tewodros Getachew, CEO of the Corporation, the new partnership intends to blend cassava with sugar molasses for fuel production.

“Since they’re working more extensively now, it is a good opportunity,” he told Fortune.

A critical obstacle remains cost. SAF is two to three times more expensive than conventional jet fuel. In Africa, jet fuel already costs 17pc more than in other regions due to logistical, financing, and tax inefficiencies. Analysts like Yonatan Menkir warn that without tax exemptions, subsidies, or carbon credits, the price differential will be passed on to passengers. That could make flying less accessible, undermining Ethiopian Airlines’ goal of expanding its routes to promote economic inclusion.

Sunbird Bioenergy, under its CEO, Richard Bennett, brings a tested model of integrated biorefineries, out-grower farming, and export-linked fuel production. Its success in Sierra Leone, where it operates a 23,000hct sugarcane estate, offers a reference point. The company’s projected revenue of 15.2 million dollars and employment of 120 staff show its scale.

“Our business is essentially an investment platform,” he said. “We attract capital to build bioenergy projects in host countries, and each project comprises three core components of agriculture, refining, and fuel distribution.”

Yet, Ethiopia presents a different set of challenges. Notably, it lacks industrial-scale cassava cultivation. Establishing large-scale cassava farming, securing supply chains, and training 10,000 farmers are herculean tasks in a country where past biofuel ambitions, like molasses-based ethanol, have faltered due to misaligned incentives, poor infrastructure, and underperformance. Land disputes, particularly in regions targeted for expansion, could derail the project if not managed transparently and with local buy-in.

On paper, Ethiopia’s policy infrastructure appears robust. The Ministry of Water & Energy’s new biofuel strategy prioritises industrial-scale SAF and biodiesel production using HEFA/HVO processing and alternative feedstocks, including municipal waste. Federal authorities want to integrate these fuels into their decarbonisation pathway and reduce reliance on imported energy.

According to Kaleb Tadese, an energy researcher at the Ministry, the government intends to use cassava, molasses waste, and even municipal waste for fuel generation. He pointed to the Qoshe waste-to-energy plant in Addis Abeba, which generates about 25Mw a year, half of its capacity.

“In the new strategy, we’re planning to work on the import substitution of biofuel, energy mix, decarbonisation and human capital resource use,” he said.

Kaleb disclosed that the Ministry is trying to expand the use of clean cookstoves, now below 10pc, across regional states and cities.

But implementation remains patchy. A&H Engineering Plc, a domestic producer of ethanol stoves, has nearly ceased operations due to ethanol scarcity and high input costs. Ethanol now sells at 320 Br a litre, roughly double the price of traditional fuel, despite temporary excise tax exemptions. According to Hilawe Lakew, the company’s managing director, without stable ethanol supply and price controls, the clean fuel transition is more aspiration than action.

“Who buys biofuel for double the price of fuel itself?” asked Hilawe.

Operating near the Qilinto Industrial Park with an initial capital of 10 million Br, Hilawe’s company has faced ethanol shortages and volatile prices, making biofuel unattractive to buyers.

“When the excise tax on alcohol was set, the price went up,” he said. “With the directive from the Ministry of Finance, we’re able to be exempted, but the industry has turned its face again, as the price for alcohol was better than fuel, as many sugar manufacturers dropped their production. We need a policy intervention.”

The World Bank’s 2024 SAF report places Ethiopia among the most promising African countries for SAF production via the Alcohol-to-Jet (ATJ) pathway. An ATJ plant, with a projected cost of 376 million dollars, could meet six percent of national jet fuel needs. Yet, the report also unveiled the need for policy harmonisation, financial incentives, and technology-neutral regulation to spur market entry.

These elements are largely missing in Ethiopia’s fiscal reality. The estimated 200 million dollars in refinery costs will require either concessional financing, private equity, or a robust public-private partnership model. Without these, Ethiopia may lack the financial scaffolding needed to realise its SAF vision.

According to experts, Ethiopia’s pursuit of SAF aligns well with global environmental goals and national economic aspirations. The synergy between local biofuel production, import substitution, employment generation, and reduced carbon emissions makes compelling strategic sense.

“Economy, ecology, aviation, and national interest are coming into play on one project,” said Temesgen Getaye, the Airline’s group treasurer. “This kind of partnership will streamline three major issues: the supply chain, environmental relations, and cost decrease for us.”

But the distance from plan to practice is considerable. Ethiopia will need to cultivate cassava at scale, revive its sugar sector, provide incentives for SAF blending, and ensure price competitiveness, all while navigating bureaucratic inertia and investor scepticism. The partnership with Sunbird Bioenergy could become a defining test case for Ethiopia’s green industrialisation path.

“Translating political vision into technical and commercial delivery requires a rare mix of realism, discipline, and institutional strength,” said Yonatan.

Banks Tighten in Unison as Forex Rates Edge Toward New Equilibrium

Posted on October 26, 2025October 27, 2025 by Digital Editor

The Birr (Brewed Buck) has been walking down a narrow slope for months, sliding a little each week as monetary policymakers test how far they can let it fall without stoking a new burst of inflation.

The National Bank of Ethiopia’s (NBE) reference rate crossed 150 Br to the dollar last week and kept rising, an unmistakable signal from the Central Bank that a gentler, policy-managed depreciation is underway, and that the formal market should inch toward levels already accepted on the street.

Four consecutive weeks of decline speak to the chronic shortage of hard currency and the steady pull of import demand and debt service. The spread between individual bank quotes tightened late last week, displaying that lenders were converging on a shared expectation of further depreciation. According to market watchers, banks could have sensed another phase of policy adjustment and trimmed outlier quotes to avoid being stranded by a sudden official shift.

Every bank felt the pressure, no less the Commercial Bank of Ethiopia (CBE), the state-owned financial workhorse. Its forex managers moved their rates fastest, a nod to the Bank’s size and its exposure to big-ticket public projects that gulp foreign exchange. Oromia Bank and the Central Bank preferred smaller, steadier adjustments, showing a bias for order over speed. Taken together, the changes in the forex market left a clear footprint that market forces are pushing the Brewed Buck lower, yet the market is being shepherded by policy, not left to chance.

A snapshot of the six days leading up to Saturday, October 25, 2025, showed that leadership at the top was anything but steady. The Central Bank posted a bold buying rate of 152.576 Br on October 23, almost 8.3 Br higher than ZamZam Bank’s 142.65 Br low. On paper, a uniform two percent spread governs the market. In practice, a wide corridor, from 142.65 to 152.58 on the buy side, and from 145.51 to 153.81 Br on the sell side, betrays different appetites for risk and liquidity.

For much of the week, the Central Bank dominated the leaderboard.

Oromia Bank, once the pace-setter, slipped to second place, its buying quote at times 0.17 Br below the Central Bank. Even so, Oromia Bank offered the most aggressive selling rate, peaking at 153.81 Br by Friday. Hijra Bank staked out high ground midweek with a 151.439 Br selling quote, while mid-tier lenders bunched their offers between 150.2 and 150.9 Br to the dollar. Younger banks such as Ahadu Bank and, early in the week, CBE and Cooperative Bank, held the low end until late-week catch-up bids pressed them higher.

The five large private banks (Awash, Abyssinia, Dashen, Wegagen and Zemen) appeared to have abandoned moving as a bloc. On Saturday, October 20, Abyssinia and Wegagen banks bid above 148 Br, while Awash, Dashen and Zemen stayed below. The gap persisted in smaller steps all week, perhaps revealing balance-sheet pressures, not groupthink, dictate quotes.

The CBE played a game of its own. Late-week buying rates between 147 Br and 147.59 Br were roughly 2.6 Br above the prior week’s levels but remained near the market average, not at the top. To sweeten the deal, the CBE offers off-board “top-up” cash bonuses of about 10 Br a dollar, trimming the effective spread for customers without raising its posted board rates. By combining moderate quotes with hidden bonuses, CBE and other banks attempt to attract volume while staying within formal limits.

Viewed across six days, the market fell into four camps.

The Central Bank sat alone, posting zero-spread quotes and setting the upper ceiling. Aggressive names, led by Oromia Bank on the sell side and at times Abyssinia or Wegagen banks on the buy side, pushed hard when they needed dollars. A middle cluster (Awash, Dashen, Zemen, Lion, Berhan, Bunna and Enat) trimmed quotes in small steps, hewing to the two percent rule. Floor-setters, such as ZamZam, Ahadu, and briefly CBE and Cooperative Bank, hugged the bottom until late-week climbs.

Despite the range, averages remained stable at about 147.8 Br for buying and 150.7 Br for selling. The day-to-day median buying rate crept from the mid-147s to shy of 148 Br. The week’s peak fell back when the Central Bank clipped its quote to 150.96 Br, but the underlying gap remained.

In effect, two markets coexist. The administrative track, led by the Central Bank, prints headline premiums. The commercial track balances demand, reserves and policy signals within the spread rule. Until the tracks merge, customers will face a market that looks uniform yet produces different outcomes depending on the counterparty and the day. On the buy side, the Central Bank’s 152.57 Br quote on October 23 ranks highest. ZamZam’s 142.65 Br sat at the bottom. On the sell side, Oromia’s 153.81 Br topped the chart; ZamZam anchored the low at 145.5 Br.

Against these poles, the averages look tame, but the contrast showed how liquidity needs and risk tolerance carve the corridor.

Zoom out to four weeks and the picture sharpens. Rates climbed everywhere. A higher Brewed Buck-to-Green Buck figure means the Birr buys less hard currency, steady depreciation. CBE’s rate jumped from about 140 to 147 Br, a 4.9pc leap. Oromia Bank gained 4.2pc; the Central Bank and the industry average added around four percent. The spread between the top and bottom narrowed from nearly five Birr to less than four Birr, evidence of a market growing more disciplined under policy pressure.

Week by week, the first half of the month was quiet, perhaps reflecting a brief lull in liquidity strain. Two weeks ago, banks moved in tandem, and last week saw quotes bunching near 150 Br. Oromia Bank’s slight dip three weeks ago was reversed the following week, likely stemming from a short-term cash cushion. The CBE’s late sprint looks like a catch-up move, typical of a large lender juggling government commitments and its own defences.

What lies behind the uniform climb?

Market watchers attributed it to two forces. There is tighter liquidity and foreign-exchange auctions that seek to ration scarce dollars. Managed depreciation keeps imports expensive, curbing demand, while allowing exporters to earn more in Birr. It also pushed the official rate toward the parallel market, shrinking arbitrage.

CBE’s bigger move may signal pent-up demand or a deliberate strategy to regain a competitive footing after starting from a conservative base. Oromia Bank and the Central Bank’s steady pace suggest that banks are closely aligning with the Central Bank’s cues. The industry’s 3.9pc advance speaks to collective, not isolated, action, a dance choreographed by policy guidance and market constraints.

Short-term projections cluster around the 150-Br line, the new psychological marker. Without a fresh infusion of dollars, the rate could drift to 153 Br and 155 Br in the coming months, roughly where Oromia Bank’s selling quote already sits. In the longer view, the forex market appears to be heading toward a tighter, lower-volatility regime where the official spread holds, while absolute levels rise.

Nib international Bank Faces Heavy Hit from Forex Revaluation, Pays 348 Million Br in Penalties

Posted on October 26, 2025October 27, 2025 by Digital Editor

Nib International Bank S.C. (NIB) has reported a significant loss of 2.9 billion Br, primarily due to extraordinary foreign exchange revaluation losses, this past Saturday, during its annual shareholders meeting at the Millennium Hall on Africa avenue, Airport Road. The bank faced substantial penalties amounting to 348.4 million Br. These penalties included a 251 million Br fine for liquidity shortages and a 97.4 million Br charge for violations related to Real-Time Gross Settlement (RTGS) payments. The bank has already settled these penalties.

The previous management of the bank issued Letters of Credit (LCs) totaling over 80 million dollars without having sufficient foreign currency reserves. This mismanagement plunged NIB into a financial crisis, severely hindering its ability to meet international obligations and undermining trust with foreign banks. As a result, many institutions began to reject NIB’s guarantee documents. Despite these challenges, NIB successfully settled its long-standing foreign currency debts in the most recent fiscal year. This included obligations to the Ethiopian Shipping & Logistics, the Ethiopian Petroleum Supply Enterprise’s fuel LCs, and outstanding guarantees owed to HAWK International Finance & Construction Co. Ltd.

Government-led economic reforms significantly caused the Birr to depreciate, at times reaching a value that was three times lower against the USD during debt settlements. This resulted in a foreign exchange revaluation loss of 4.4 billion Br. Consequently, potential profits were wiped out; Nib Bank could have closed the fiscal year with a 1.5 billion Br profit otherwise. The mismatch between the bank’s foreign currency assets and liabilities further intensified the financial strain.

Railway Network Upgrade Positioned as Engine of Economic Transformation

Posted on October 26, 2025October 26, 2025 by Digital Editor

The National Railway Business Summit took place at Skylight Hotel on October 21, 2025, signalling a historic step in modernising its railway network as a foundation for national development and regional connectivity. Government officials, industry leaders, investors, and experts from around the world convened to discuss infrastructure expansion, financing models, and technology adoption.

Asma Redi, chief portfolio director at Ethiopian Investment Holdings, noted that the Ethiopian Railways Corporation (ERC) carries significant overdue debt from its previous administration under the Ministry of Transport & Logistics. ERC ranks third among government debtors to the Commercial Bank of Ethiopia, with liabilities of 80.17 billion dollars, primarily used to construct and expand the national railway network.

Hilina Belachew, CEO of ERC, said the corporation has invested over USD 35 billion in major railway projects connecting key cities and facilitating access to international ports. Four ongoing initiatives include the Asab and Massawa port lines, the Sof Umar Eco-Tourism Connecting Line, the Awash Oil Depot Rail Link, and the Awash-Kombolcha-Hara Gebeya Railway, each valued at more than four billion dollars. In the long term, imported oil will be fully transported by rail, bolstering the national economy.

ERC highlighted Ethiopia’s railway legacy, from the Franco-Ethiopian Railway to the Addis Abeba–Djibouti Standard Gauge Railway, now a vital trade corridor linking the country to global markets. The summit addressed financing, technology, local capacity, and regional connectivity, with discussions on Public Private Partnership models, digital freight management, and climate-resilient infrastructure.

The corporation emphasised training Ethiopian engineers and technicians to operate and maintain the network, ensuring sustainable growth. Investors were invited to engage, with ERC positioning Ethiopia as a gateway to the African market.

Local businesses were urged to seize opportunities in construction, logistics, and manufacturing linked to railway expansion. ERC framed the project’s success as dependent on strong domestic engagement alongside global collaboration.

Gold Prices Ease After Recent Surge

Posted on October 26, 2025October 26, 2025 by Digital Editor

The price of gold, which surged sharply in recent weeks, has started to decline in the current selling market.

Over the past 15 days, 21-carat gold has traded between 24,000 and 25,000 Br per gram for imported products and around 21,000 Br for local gold. Imported 18-carat gold sold for 21,000 Br, while local 18-carat pieces were priced at 19,000 Br. Traders note that the recent increase was twice as high as typical fluctuations, attributing the spike to export patterns from Arab countries.

Data from the National Bank of Ethiopia(NBE) shows a recent drop in gold prices. 18-carat gold now costs around 99 dollars (14,970 Br), while 21-carat gold is priced at 115 dollars (17,465 Br).

Market observers caution that predicting inflation trends remains risky despite the temporary stabilisation, with both domestic and foreign media urging buyers and sellers to exercise care in trading.

Africa Wants In on the Climate Deal, Refuses to Play the Victim

Posted on October 26, 2025October 25, 2025 by Digital Editor

The upcoming United Nations Climate Change Conference (COP30) will be the first to take place in the Amazon, sending a powerful symbolic message about the central role developing economies should play in the global response to the climate crisis. But at a time of geopolitical fragmentation and low trust in multilateralism, symbolism is not enough.

Developing economies should plan and propel the green transition. Africa is no exception. So far, the continent’s climate narrative has been one of victimhood. It contributes less than four percent of global greenhouse-gas emissions, but it is highly vulnerable to the effects of climate change. This disparity fueled the calls for “climate justice” that helped to produce ambitious climate-financing pledges from the industrialised economies at past COPs.

But with those pledges going unfulfilled, and Africa’s climate-finance needs rising fast, moral appeals are clearly not enough. A shift to a more strategy-oriented discourse is already underway.

The Second Africa Climate Summit (ACS2), which took place in Addis Abeba last month, positioned the continent as a united actor capable of shaping global climate negotiations. It also produced several initiatives, such as the Africa Climate Innovation Compact and the African Climate Facility, that promise to strengthen Africa’s position in efforts to ensure a sustainable future.

Instead of continuing to wait for aid, Africa is now seeking to attract investment in its green transition, not because rich countries “owe” Africans, though they do, but because Africa can help the world tackle climate change. However, success will require progress on four fronts, all of which will be addressed at COP30.

The first is the cost of capital. Because systemic bias is embedded in credit-rating methodologies and global prudential rules, African countries face the world’s highest borrowing costs. This deters private capital, without which climate finance cannot flow at scale. While multilateral development banks (MDBs) can help to bridge the gap, they typically favour loans, which increase African countries’ already formidable debt burdens, rather than grants.

At COP29, developed economies agreed to raise “at least” 300 billion dollars per year for developing-country climate action by 2035, as part of a wider goal for all actors to mobilise at least 1.3 trillion dollars per year. If these targets are to be reached, however, systemic reform is essential. This includes changes to MDB governance to give African countries a greater voice and increased grant-based financing. Reform also needs to include recognition of African financial institutions with preferred creditor status, and the cultivation of a new Africa-led financial architecture that lowers the cost of capital.

The second area where progress is essential is carbon markets. Despite its huge potential for nature-based climate solutions, Africa captures only 16pc of the global carbon-credit market. The projects are largely underregulated and poorly priced, with limited community involvement. Africa is now at risk of falling into a familiar trap where it supplies cheap offsets for external actors’ emissions. It reaps few benefits for its people.

While some African countries are developing their own carbon market regulations, a fragmented system will have a limited impact. What Africa needs is an integrated carbon market, regulated by Africans, to ensure project quality, set fair prices, and channel revenues toward local development priorities, including conservation, renewable energy, and resilient agriculture. This system should be linked with Article 6 of the Paris Climate Agreement, which aspires to facilitate the voluntary trading of carbon credits among countries.

The third imperative for Africa at COP30 is to redefine adaptation. Rather than treating it primarily as a humanitarian project, governments should integrate adaptation into their industrial policies. After all, investment in climate-resilient agriculture, infrastructure, and water systems generates jobs, stimulates innovation, and spurs market integration.

By linking adaptation to industrialisation, Africa can continue what it started at ACS2, shifting the narrative from vulnerability to value creation. Africa should push for this approach to be reflected in the indicators for the Global Goal on Adaptation, which are set to be finalised at COP30. The continent’s leaders should also call for adaptation finance to be integrated into broader trade and technology frameworks.

The final priority area for Africa at COP30 is critical minerals. Africa possesses roughly 85pc of the world’s manganese, 80pc of its platinum and chromium, 47pc of its cobalt, 21pc of its graphite, and six percent of its copper. In 2022, the Democratic Republic of the Congo (DRC) alone accounted for over 70pc of global cobalt production.

But Africa knows all too well that natural-resource wealth does not necessarily translate into economic growth and development. Only by building value chains on the continent can Africa avoid the “resource curse” and ensure that its critical mineral wealth generates local jobs and industries. This imperative should be reflected in discussions within the Just Transition Work Programme at COP30.

These four priorities are linked by a deeper philosophical imperative. The extractive logic of the past, in which industrialisation depended on exploitation and destruction, should give way to a more holistic, just, and balanced approach, which recognises that humans belong to nature, not the other way around. Africa can help to lead this shift, beginning at COP30.

The barriers to progress are formidable. China likes to tout South-South solidarity, but it does not necessarily put its money where its mouth is. The European Union (EU) is struggling to reconcile competing priorities and cope with political volatility. The United States (US) will not attend COP30 at all, potentially emboldening others to resist ambitious action. If consensus proves elusive, parties might pursue “mini-lateral” deals, which sideline Africa.

When it comes to the green transition, Africa’s interests are everyone’s interests. If the continent is locked into poverty and fossil-fuel dependency, global temperatures will continue to rise rapidly. But if Africa is empowered to achieve green industrialisation, the rest of the world will gain a critical ally in the fight for a sustainable future.

Month: October 2025