Ethiopia Secures $4.8b Debt Pledge for Africa's Largest Airport

Ethiopia Secures $4.8b Debt Pledge for Africa’s Largest Airport

Posted on November 30, 2025December 3, 2025 by Digital Editor

When Finance Minister Ahmed Shedie strode into one of the six boardrooms at the plush Sofitel Jardin des Roses in Rabat, Morocco, last week, he did so carrying the burden of an ambition, and the hopes of a country seeking to leap to continental connectivity.

But it was the greeting that awaited him inside that set the tone for what would soon be described by one dealmaker as “a hunting ground for capital in Africa.”

There, amid the swirl of 2,000 delegates at the eighth edition of the African Investment Forum (AIF), four potential debt financiers signalled their readiness to underwrite a whopping 4.8 billion dollars in loans, nearly 40pc of the total 12.5 billion dollars project cost tag, for Ethiopia’s flagship infrastructure bet. It will be a brand-new international airport near Bishoftu (Debreziet) town, 45 southeast of Addis Abeba, in Oromia Regional State.

It is a project that, upon completion, promises not only to become the largest airport on the African continent, but also to alter the region’s economic trajectory, linking Ethiopia’s ambitions to the pulse of global aviation.

The breakthrough marks a major turning point, not only for Ethiopia but also for the African Development Bank (AfDB), whose own half-billion-dollar commitment to the project will make the Bishoftu Airport its second-largest infrastructure engagement, surpassed only by the 17 billion dollars West African rail corridor. The remaining 8.5 billion dollars is expected to come from a blend of loans, while the balance, close to 3.2 billion dollars, will be injected as equity by Ethiopian Airlines Group, a company with an outsize role in the continent’s aviation renaissance.

Held against the backdrop of Morocco’s assertive infrastructure push and Rabat’s own ambition to position itself as a North African financial gateway, this year’s AIF convened a record 39 boardroom sessions. Over 15 billion dollars in deals were announced, with the Bishoftu Airport project emerging as one of the Forum’s standout projects. Its scale eclipses that of the continent, except for Nigeria’s railway mega-scheme.

Finance Minister Ahmed, accompanied by Mesfin Tassew, CEO of Ethiopian Airlines Group, arrived in Rabat armed with a reform narrative and a bold proposition. Addressing the assembled financiers, development bankers, and sovereign wealth fund managers, he emphasised that Ethiopia’s homegrown economic reform agenda is not only about liberalisation and market access.

“It’s about leveraging scale, connectivity, and innovation to transform Ethiopia into a regional production and logistics hub,” he said. “Structural reforms and financial innovation are at the centre of our strategy.”

Ahmed called for blended financing and risk-transfer mechanisms to catalyse private capital.

“We’re committed to a future where public capital is used not to crowd out private sector participation, but to de-risk and multiply it,” he told Forum participants at an opening panel on Wednesday, November 26, 2025.

The Finance Minister’s plea that the Bishoftu Airport is larger than an airport but a continental hub, a job generator, a gateway for global trade and innovation appears to have landed on fertile ground.

According to a senior official of the AfDB, for Ethiopia, a country of more than 100 million people, the decision to build the new Bishoftu airport is driven as much by necessity as by vision. The current Bole International Airport in Addis Abeba, while modernised in phases, is nearing capacity after a decade of double-digit passenger growth, led by the breakneck expansion of Ethiopian Airlines.

The new site in Bishoftu offers not only more acreage and expansion potential but also proximity to critical road and rail corridors, integrating seamlessly with ongoing regional infrastructure initiatives, including the Djibouti-Addis rail and cross-border expressways.

The project blueprint envisions a sprawling and multi-terminal complex with a capacity to handle up to 100 million passengers annually, positioning it alongside the world’s major aviation hubs.

However, financing such an infrastructure scheme, equivalent to roughly eight percent of Ethiopia’s GDP, demands not only deep pockets but also sophisticated financial engineering.

“Traditional public financing alone can’t meet the speed, scale, or sophistication required for today’s investment environment,” Ahmed acknowledged at a panel held in Rabat. “That is why we’re accelerating the use of instruments such as securitisation, blended finance, and credit enhancement.”

The AfDB’s involvement is considered a seal of approval and a lever to attract global financiers. According to AfDB officials, the Bank’s loan commitments will be structured alongside guarantees and blended-finance instruments, with additional risk-sharing by export credit agencies and private banks.

The African Investment Forum, cosponsored by seven financial institutions operating on the continent, and spearheaded by the AfDB, illustrated a shift in how African mega-projects are conceived and financed. Once the preserve of bilateral government deals, infrastructure financing is increasingly moving into the hands of multi-stakeholder consortia, combining development bank guarantees, institutional investor capital, and, crucially, African savings.

It was once believed that Africa’s infrastructure gap was not a problem of ideas, but an issue of bankable projects and matching the right capital to the right opportunity. In Rabat last week, 41 projects reached the six boardrooms, of which 39 were deemed bankable. The Bishoftu project was seen as a test case for how African ingenuity and international finance can converge to deliver outcomes.

Panellists echoed this theme throughout the three-day event. Officials described boardroom sessions where investors pored over financial models, debated risk-mitigation strategies, and scrutinised project governance frameworks.

“The forum has become a place where you don’t just pitch an idea,” said Max Magor Ndiaye, AfDB’s senior director for Syndication & Client Solution. “You leave with transactions, term sheets, and timelines.”

Beyond the headline numbers, the Investment Forum produced progress. Finance Minister Ahmed reported on several meetings, covering topics ranging from energy to digital infrastructure.

Central to his pitch was a commitment to financial innovation. The Bishoftu airport, Ahmed revealed, will deploy securitisation, enabling future revenue streams, from passenger fees to cargo handling, to be packaged as investable securities. He foresees that blended finance structures will allow concessional capital to “de-risk” private investors, while guarantees from the AfDB and other multilaterals will lower borrowing costs.

“The key is credibility and coherence,” said Ndiaye, stating the importance of robust governance and independent oversight in winning investor trust. “When sponsors demonstrate the capacity to execute, and the policy framework is clear, capital will follow.”

A further innovation on display at the Forum was the mobilisation of African sovereign wealth and pension funds, a move hailed as a milestone by development financiers seeking to “unlock the potential of African savings” and reduce reliance on external creditors.

While the numbers are eye-catching, the new airport is more than a monument to ambition. According to the Finance Minister, it is central to Ethiopia’s regional integration strategy.

“For us, regional integration isn’t merely an economic aspiration but a political imperative,” he told a panel, “a means to secure influence in the Horn of Africa and beyond.”

Ahmed listed a menu of liberal policy reforms, including tariff reductions, customs harmonisation, and digital infrastructure upgrades, as being aligned with the African Continental Free Trade Area (AfCFTA) and IGAD protocols.

“The hope is that by making Ethiopia more interoperable with its neighbours, the new airport will become not just a national asset, but a pan-African gateway,” he said.

The government’s answer is to embed the project within a broader “homegrown reform agenda,” prioritising transparency, market liberalisation, and private sector participation.

“Liberalisation, transparency, and decisional strengthening are central to our program,” Ahmed declared.

According to AfDB officials, their investment is predicated on comprehensive environmental and social impact assessments, as well as robust safeguard mechanisms to ensure that project benefits are broadly shared.

“They’ve done an impressive job in completing these impact assessments and the financial analysis,” Ndiaye said at a closing press briefing on Friday.

In the words of a senior AfDB official involved in the project, “this is how you turn ambition into bankable reality, by matching projects with capital, and vision with execution.”

Birr Slips Beyond 150 Threshold as Banks Form a New Floor

Posted on November 30, 2025December 3, 2025 by Digital Editor

The Birr (Brewed Buck) slid another notch against the Green Buck last week, but the more telling development was where the slippage occurred. Every commercial bank quoted above 150 Br to the Greenback on the buying side.

The big private banks, but Awash bank (Abyssinia, Dashen, Wegagen and Zemen), clustered around 151 Br, while a few outliers probed the limits at both ends. In the tightly administered forex regime, such small moves are often the clearest sign of pressure building beneath the surface. Mid-month rate sheets from November 10 to 15, 2025, had already hinted at weakness, with banks nearing, but not consistently over, the 150-Br line.

The period’s average daily high bid was 150.94 Br, while its low was 150.02 Br. That narrow channel left traders debating whether the psychological barrier would hold until year-end. Last week gave the answer. The barrier was gone. Buying quotes that begin with “150” or “151” was standard, and each day nudged the bar higher. The market has quietly set a new floor.

The spread between buying and selling remained in a wafer-thin 0.10-0.25 Br range, evidence that competition remains hemmed in by regulatory caps and that risk premia are being suppressed by the whims of monetary policymakers rather than dissipated. Abyssinia, Awash, Dashen and Wegagen banks tweaked their quotes by pennies, parking near 151.5 Br buying and 154.5 Br selling rates, the new mainstream.

The National Bank of Ethiopia’s (NBE) quote anchored the strip. Early in the week, it stood at 153.82 and 153.95 Br; by November 28, it slipped to 153.02 Br. The zero spread emphasised that the Central Bank is a reference, not a trader, yet that single downward tick was the lone sharp inflexion.

Commercial banks, by contrast, crept upward. Abyssinia edged from 151.45 Br on November 24 to 151.83 Br by Friday. The state-owned Commercial Bank of Ethiopia (CBE) moved from 150.52 Br on November 24 and 26 to 151.30 Br on November 29. These fractions translate into a steady dollar premium and, for importers, a higher Birr cost for every invoice cleared at the window.

Outliers sketch the edges of a choreographed market. Oromia Bank (ORO) was again the high-quote buyer, selling at 156.91 and 156.93 Br. Bunna Bank briefly tested a 1.33pc spread on November 26 before snapping back to the mandated two percent. Such tactical probes did little to shift the average but show how little autonomy banks possess.

Strip out the central bank and the late-week average lands around 151.35 Br buying and 154.3 Br selling. However, the glide was orderly, with 151.2 Br mid-week to 151.4 Br by Saturday, mirrored on the offer side. A controlled slide, not a rout. Within that glide, the four large private lenders stood out. On November 29, Abyssinia paid roughly 151.34 Br, Dashen 151.22, Wegagen 151.55 and Zemen 151.27, all in the upper half of the pack. Their forex managers were willing to bid for scarce dollars to defend corporate relationships despite the tight corridor.

Awash Bank was the odd man out. Its 150.91-Br bid sat below CBE’s 151.30 Br. For the country’s largest private bank to trail the state giant was rare, revealing that Awash Bank was comfortable with its dollar pool, less exposed to import-heavy clients, or simply reading the rules conservatively.

Oromia Bank crowned the field. On November 29, it outbid the Central Bank, posting 153.86 Br buying and 156.94 Br selling. Against Cooperative Bank of Oromia’s (Coop Bank) 150.59 Br low, that was a spread of more than three Birr, material in a regime where the formal gap was capped.

Three tribes marked the market last week.

Price leaders such as Oromia Bank and, by design, the Central Bank. Oromia Bank used the top of the band to scoop up hard currency, while the Central Bank signalled official tolerance for further slippage. The mainstream herd, including Abyssinia, Dashen, Wegagen, Zemen and CBE, followed, shadowing the Central Bank and edging up only when needed to keep business. Awash Bank drifted toward the third tribe of the discounters. Coop Bank, NIB and a clutch of smaller banks hugged the bottom day after day, posting buying quotes around 150.5 and 150.8 Br and selling above 153.5 Br.

A few banks kept rates static for several days last week, then leapfrogged higher in a single adjustment, likely mirroring approvals that lag market changes. These quirks reveal each financial institution’s risk appetite more than they shape the currency’s path.

Against the November 10 to 15 baseline, the fortnight resembled an administered crawl downward. Once 150 Br was breached, expectations reset. Now the market eyes the following round number. Slow and steady moves can disguise growing stress. Nudging the official rate may ease today’s strain, but it also planted the idea that tomorrow will be worse. In an economy where dollar demand chronically outstrips supply, that belief can grow into a self-fulfilling prophecy.

Whether the calibrated loosening buys breathing room depends on hard-currency inflows. If export receipts, remittances and donor funds stay thin, the creep will resume. Banks are likely to march in lockstep, each tick minor but cumulatively corrosive. Without a decisive improvement in supply, the managed crawl seems set to continue, one micro-adjustment at a time, leaving traders and importers braced for the day when the screens flip from “151” to a number beginning with “152,” a shift that would lock in a fresh psychological anchor for the corporates and ordinary households alike.

Factories of Broken Promises as Young Labour for a Future That Never Comes

Posted on November 30, 2025December 3, 2025 by Digital Editor

In the mid-2010s, factories began to hum in new industrial parks and truck convoys glided past freshly painted security gates, heralding the birth of an “African tiger.” Officials often spoke of “transformation”, of jobs lifted from poverty, and of exports swelling the national purse.

A decade later, a visitor might believe it all, watching a mainly female workforce file in, eyes bright with ambition. Yet, the promise of decent work often dissolves on the shop floor where children toil, wages are a pittance, and safety is a hope, not a rule.

On paper, Ethiopia was meant to be a model employer. A 2019 labour proclamation fixes the minimum working age at 15, forbids hazardous duties for under-18s, caps the adult workweek at 48 hours and keeps overtime voluntary and paid. Workers enjoy union rights, maternity leave and basic health protections. Federal legislators have ratified the core conventions of the International Labour Organisation (ILO), including Convention 182 on the worst forms of child labour.

The gap between statute and reality, however, yawns ever wider. Enforcement is frail and exploitation systemic, leaving the youngest and poorest to pay the price.

The legal machinery whirs but rarely bites. In 2023, labour inspectors examined more than 140 recruitment agencies, issued 178 sanctions and revoked 72 licences. The sound of discipline pleased donors. Nonetheless, its effect on the ground was muted. Government files admit that over 100 child-labour violations are logged each year, yet penalties are usually administrative, warnings or small fines, delivered far from the glare of high courts. Justice trickles, never floods.

Nobody truly knows the scale of the abuse. The last comprehensive survey of the national labour force was conducted in 2005. It found that 5.5 million children aged five to 17 were engaged in economic activity, with more than 900,000 in hazardous work. Two decades on, international agencies reckon the number has barely fallen and in some regions has risen as COVID-19, conflict, and inflation pushed families over the edge.

Children hawking on city streets, shining shoes, herding cattle, or hoeing fields for 10-hour stretches is a common sight. In booming construction zones, they haul bricks and mix cement, out of sight of the state’s 400 inspectors, one for every quarter-million citizens.

Legal scholars find scarcely any child labour litigation before the Cassation Benches of the Federal Supreme Court. Wage disputes and unfair dismissals crowd the docket. Abused minors do not. Cases vanish into administrative corridors or are prosecuted under trafficking statutes, making them hard to trace as labour offences. Victims lack money, information and faith in the law. Resigned pragmatism rules.

Hazards abound for children and adults alike. The 2021 and 2023 “Findings on the Worst Forms of Child Labour” by America’s Department of Labour lists forced child labour in agriculture, construction, domestic service, weaving and commercial sex.

Boys wield pesticides in flower farms, girls stitch garments beside clicking needles, and adolescents lug heavy loads on building sites. According to a paper by the International Cocoa Initiative, released two years ago, despite the 15-year legal threshold, inspectors rarely venture into the informal economy, leaving 12-year-old maids and roadside helpers beyond the reach of a mechanic. Sickness and injury follow.

Industrial parks are the crown jewels of the state-led push to lure foreign investors. Hawassa, Bole Lemi and the Eastern Industry Zone boast gleaming sheds and duty-free incentives. They also offer labour at rock-bottom prices. In the garment trade, one of the chief exporters, monthly wages start at a few thousand Birr, barely a third of the poverty line for a family of four, according to a 2021 World Bank assessment. Peak-season shifts stretch to 60 hours, and overtime often goes unpaid. Workers complain of denied breaks, harassment for missing quotas and, when they protest, intimidation.

The industrial park in Hawassa alone employs more than 25,000 staff, 70pc of them women under 25 who migrated from rural areas. Turnover is among the worst in the world, with some plants losing over half their workforce within six months. The young quit because rent, food and transport devour their meagre pay. Nationally, fewer than 10pc of export-sector employees belong to independent unions. “Employer-dominated” unions tick legal boxes but mute dissent. Attempts to organise independently are met with managerial threats or police visits.

Inspectors are hopelessly outnumbered, not even 1,000 deployed for a population of over 100 million. Most infractions end in warnings or token fines. Prosecutions under the Labour Proclamation or Criminal Code seldom reach court. The Ministry of Labour & Social Affairs, starved of cash and clout, competes with the Industrial Parks Development Corporation (IPDC) and the Ethiopian Investment Commission (EIC), federal agencies empowered to smooth investors’ paths.

Production targets trump safety audits, while flexible hiring beats fixed protections. Between 2017 and 2023, at least 18 foreign firms exited the parks, shedding 11,500 jobs once held mostly by young women. The loss of duty-free access to American markets under the African Growth & Opportunity Act (AGOA) in 2021 hastened closures and mass layoffs. Severance, when paid at all, is meagre.

Labour unrest simmers. From 2016 to 2021, a dozen strikes flared in the marquee parks, some halting output for weeks. Observers suspect many more went unreported. Security forces disperse demonstrators, and organisers risk dismissal or jail. “Industrial peace”, ministers insist, must prevail.

The country’s macro figures mask human misery. GDP per capita rose from 377 dollars in 2005 to over 1,000 in 2024 dollars, yet UNICEF finds 36pc of children still live below the national poverty line, with worse numbers in the countryside. In the garment sector, real wages fell nearly 10pc between 2018 and 2023 once inflation is stripped out. The situation has deteriorated following the dramatic decline in the Birr’s value against a basket of foreign currencies. Economic growth built on ultracheap labour can entrench, not relieve, poverty.

Behind today’s crisis lie institutional choices. Policymakers prized job quantity over quality, trusting that future prosperity would raise standards. Education and vocational training, vital for increasing skills and bargaining power, were underfunded. Social safety nets, such as health insurance, unemployment pay, and child benefits, barely exist. Workers remain trapped in a cycle of exploitation. Policymakers point to export receipts and paved roads as evidence of progress.

But what is the value of a job if its wage cannot cover food and rent? What is growth worth if it is won on the backs of children robbed of school and health?

No silver bullet beckons. Start with enforcement. The labour inspectorate should grow in size, skill, and autonomy, with the power to prosecute and name and shame violators. Judges need resources to hear cases swiftly, including those involving minors. Data should be published, not buried. Health cover, injury compensation and unemployment support should not be luxuries. They are foundations of decent work and tools against child labour. Funding them is cheaper than the long-term cost of stunting a generation.

Foreign investors will stay if the authorities offer fairness, not simply a race to the bottom. Wages should rise in tandem with productivity, and genuine collective bargaining should replace fig-leaf unions. A social contract that values workers is not anti-business but the durable basis for growth.

In Cattle Markets, Old Rituals Buckle Under New Tax Demands

Posted on November 30, 2025December 3, 2025 by Digital Editor

The Qera livestock market, on Alexander Pushkin St., wakes before sunrise. Beneath a pale sky, cattle traders in felt hats tease reluctant bulls with twists of rope, boys chase bleating goats through muddy alleys, and butchers wander the corrals sizing up the weight of an ox by sight alone.

Deals begin with banter, a shout of greeting, a clapped palm, and end with the gesture that has signalled trust for generations. A firm handshake and an elder’s vow ascertain that the animal is sound. Where cattle measure wealth and weddings are judged by the size of the slaughter, the art of bargaining is as cherished as the feast that follows.

That handshake, however, is no longer enough for the city’s tax officials.

A new rule requires any butcher who buys animals without receiving a printed receipt to instead collect data from the seller. The butcher is required to record full names and address, write the agreed price, attach a photocopy or screenshot on mobile phones of the seller’s identification card, secure a signature, and staple a bank transfer slip if money changes hands electronically.

The entire bundle should be delivered to local revenue offices as proof of the transactions.

This is part of the fiscal policymakers and tax officials to meet a hefty federal budget bill, hitting the threshold of almost two trillion Birr. For a government bound by a deal with the IMF, committed not to borrow from the Central Bank to pay its budget deficit, its tax agents are aggressive, if not desperate, to scrap every revenue stream. After all, they recognise that the amount of tax collected as a ratio to the GDP is the lowest in Africa.

Tax authorities argue that the change in the livestock market is essential. They see it as one of the most lucrative trades, but also a leaking bucket for taxes.

“Receipts are the only way to stop tax evasion,” said Sewnet Ayele, head of communication at the Addis Abeba Revenue Bureau. “Whether from the seller or through the new buyer-submitted contract system, documentation protects the public purse.”

If a butcher inflates the purchase price on the voucher, auditors can compare slaughter numbers and regional price data and accept only 65pc of the claimed amount. The balance is subject to tax.

Inside the Qera market, the new rule felt like a reversal. Paperwork, photocopiers, and bank slips have turned a fast-moving, mostly cash economy into a bureaucratic obstacle course.

According to Ayele Sahle, general manager of the Addis Abeba Butchery Association, which has spoken for the trade since 1956, the new way of buying cattle puts far more pressure on his 1,300 members.

“In these open markets you can’t find a photocopy machine, let alone draft contracts under the sun while a bull tugs at its rope,” he told Fortune.

Addis Abeba counts more than 2,000 butcheries, where more than half pay monthly fees to the Association to finance a welfare scheme generous by Ethiopian standards. A member gets paid compensation of 200,000 Br if a carcass fails the vet’s test; fire-accident aid, up to 100,000 Br toward funerals, and overseas medical cover of 400,000 Br. All of it depends on shops staying open.

Not everything about the trade fits nostalgic images of masculinity and ease. The Association’s welfare fund paid out 33 funeral grants last year, mostly to men trampled while loading cattle onto lorries or cut by the industrial saws now common in modern shops.

Fire gutted two stalls in Qality, the southeast part of the city, and another six members lost entire carcasses when inspectors at the Abattoir condemned them for disease. According to Ayele, stable taxation would help free up funds to train staff and improve hygiene.

“We want fairness, not favours,” he said. “Tax us in a way we can manage.”

At Mite Special Butcher, near Wello Sefer, its owner, Mitiku Moshago, pulled on a blood-red apron and recalled the trouble that began with a single stack of sheep. In 2022, he bought 26 animals at Qera.

The trader handed over a receipt printed in Gamo Zone, hundreds of kilometres away. The city office rejected it.

“It put me in serious trouble,” he said, “adding more cost to my annual tax.”

Last year, Mitiku paid more than 300,000 Br in sales. A former soldier wounded in battle, and a father of five, he supplements his income with a monthly disability payment of 4,700 Br, but fears he may soon need a different trade altogether.

Across town, Wendmamachoch Butchery employs 16 staff and usually stores two cattle a day, swelling to 10 in the busy seasons or double that number during holidays. Last year, when buying cattle from Bale, Adama, Wollega, and Gonder, Wendmamachoch paid more than 1.2 million Br in tax.

How high a butcher shop sits on the tax ladder depends on daily throughput, location and size. The Bureau sorts businesses into four bands.

The highest assumes an average of 148Kg of ox meat and 115Kg of cow meat sold each day. The smallest,60Kg and 45Kg, respectively. Officials multiply these numbers by seasonal price charts to estimate annual income, then levy tax. Butchers argue the method punishes honest traders when paperwork gaps open and auditors discount part of their expenses.

“If I keep demanding a receipt, I can’t get enough number of cattle,” said Girma Assefa, manager of Wendmamachoch Butchery, fearing that strict insistence on receipts would strangle supply. “Holding documents together while negotiating is almost impossible.”

The Association’s leaders thought they had a solution. More than a year ago, they proposed folding the tax into the slaughterhouse service fee already collected by the Addis Abeba Abattoirs Enterprise. A butcher pays 200,000 Br each time the Enterprise inspects, slaughters, quarters and stamps an animal.

Adding a tax element per carcass, they argued, would close loopholes without choking the market. The Enterprise agreed. In a letter to the Mayor’s Office, its managers argued that the Enterprise’s digital database could report every animal processed and the fee attached to it.

However, obtaining a receipt is rarely simple. Traders often work on handshake credit, primarily when they have known a buyer for years.

Girma Kebede has sold cattle in Qera for two decades. He supports six children and usually travels to Harar, Jimma or Bale to assemble 15 to 20 heads before driving them north.

“This market is built on trust,” he told Fortune.

But since the new rule, he must insist on immediate bank payments and provide formal documents.

“It slows everything,” he said. “The market is already chaotic.”

Some, like Andualem Belete, a five-year trader at Qera, resist outright. He shrugged at the idea of handing over his ID.

“If somebody asks me to copy my ID, I won’t let them,” he said. “I can’t leave five cattle unattended to find a photocopy machine, especially during holidays when I’m negotiating with two customers at once.”

Holiday demand can triple prices, from 65,000 Br for a scrawny steer in the slow season to 300,000 Br for a fattened bull in the days before Easter. Speed is survival.

Inside the Abattoir on Tanzania St., stainless-steel rails rattle as sides of beef swing from hooks.

According to the Enterprise’s Communications Director, Ataklt Gebremichael, the company is ready if the city chooses to tax at source. Capacity is 3,500 cattle a day, though illegal backyard slaughterhouses mean normal throughput is closer to 2,000. Holidays push the number to 5,000. Staff conduct dual health checks, before and after slaughter, and log each carcass in a computer system.

“We only charge the service fee,” he said, “but we can share data if the city wants it.”

Tax experts believe the purchase voucher could still work.

According to Dawit Kejela, a former Ministry of Revenue auditor now advising businesses on compliance, traders are already required to issue receipts, but in reality, few farmers across the regions print them.

“Getting a receipt from farmers is very difficult,” Dawit admitted. “But, it helps shop owners have trustworthy information about the purchases they make.”

The voucher allows butchers to copy the farmer’s ID, write the details and get a signature. A photo from a mobile phone suffices if no copier is nearby. Dawit argued that by pushing undocumented traders out of the market, the new rule might even cool escalating meat prices in the long run.

Meat prices in the capital have risen steadily since 2021. An ox can sell for over 600 Br a kilo, far beyond many household budgets. The high-end butchers could price up to 3,600 Br a kilo.

On the ground, neither system has won converts. In the muddy alleys behind the Shegole market pens, buyers still tug loose hides on living cattle to guess fat cover. Traders still marked a deal by slapping palms, then led the animal away, trailing a receipt in the mind rather than on paper. But now a butcher who follows tradition has to decide whether to risk an auditor’s rejection later.

Mitiku has tried to comply. He keeps a sheaf of blank vouchers in a satchel, along with a pen and a cheap smartphone for photographs. When he buys an animal, he fills the form quickly, but he cannot force a herder from Gonder with no bank account to pose for a camera.

“They think we’re spies,” he said.

Some walk off to find another buyer. Others agree but demand a higher price for the inconvenience, squeezing already-thin margins.

The city revenue bureau remains unmoved. Its Director for Tax Collection, Taye Masresha, warned that the voucher is a concession, not a retreat.

“Operating without a receipt is still not acceptable,” he said. “If butchers present genuine documents, they have nothing to fear.”

Taye insisted that dubious high purchase prices would, however, be cut by 35pc during assessments, and the tax recalculated. His teams compare figures with records from the Abattoir Enterprise and regional trade offices to detect fraud.

Such back-and-forth leaves everyone in the cattle market anxious as the following holiday approaches. The calendar is rich with feasts, from New Year to all the religious festivities such as Easter, Eid, and weddings in between.

Each celebration swells the corrals. Girma expects to double his usual turnover at Easter; Mitiku hopes to clear debts; Girma at Wendmamachoch needs a steady supply to keep 16 families paid. All fear a scene where a bureaucrat’s form stalls a line of bulls outside a photocopy shop while the sun sets and customers wait.

In late afternoon last week, a young trader in dusty trousers stepped between rows of lowing cattle, clutching a worn notebook. He scribbled numbers, haggled in clipped Amharic, and finally sealed a deal with an older butcher in a white coat. They slap hands three times, laughter cutting through the flies.

Tradition dictates that the animal is now sold. Then the young trader hesitated. He reached inside a plastic pouch, produced a crumpled national ID and offered it apologetically. Progress, apparently, demands its own ritual.

Ayele watches such exchanges with concern.

“If the government wants more revenue,” he said, “work with us, not against us.”

He believes compromise is still possible. Simplify forms, place mobile kiosks in markets, exempt small purchases, or pilot taxation through the Abattoir Enterprise during holidays. Ayele warned that every week that passes without a decision puts another butcher toward closure, another trader toward the grey market.

New Financial Reporting Mandate Triggers Anxiety Among Banks, Businesses

Posted on November 30, 2025December 8, 2025 by Digital Editor

A decade-old law is finally being enforced, and with it, the corporate credit market is entering uncertain terrain. The Accounting & Auditing Board of Ethiopia’s (AABE) directive requiring corporate borrowers to submit Board-approved financial statements before securing bank loans represents a major compliance shift, one that is being met with guarded optimism and deep anxiety in the domestic corporate sector.

On November 24, 2025, Fikadu Agonafer, the acting director of the Board, informed all commercial banks of the new rule. Companies that want to use their financial statements for borrowing purposes should now secure the Board’s approval of their balance sheet statements. While the directive is seen as an attempt to enforce a law passed over a decade ago, it has prompted concern among banks, borrowers, and industry leaders who fear the Board may lack the resources to handle the surge in filings and that the new requirement could disrupt the flow of credit to the private sector.

The Board was granted this authority under a Financial Reporting law passed 10 years ago, which required all reporting entities, defined as businesses other than public bodies and micro enterprises, to submit their financial statements to the Board.

“The law clearly requires these companies to submit their reports,” Fikadu told Fortune, “but it was not enforced until now. Many companies didn’t submit their financial statements.”

According to Fekadu, the regulatory push comes amid a rise in malpractices, with companies allegedly presenting contradictory accounts to different authorities.

“There is a practice of reporting profitability to banks while reporting bankruptcy to the Ministry of Revenue,” he said. “This has been a common practice in the industry, and it’s unacceptable.”

The Board is pushing for a single, unified financial report used for both loan applications and tax purposes. Fekadu insisted that “the law has been in place” for a long time, with repeated notices and ample time for financial institutions to prepare.

According to Kindye Mekuriaw, a lecturer at Admas University College and a banker at Lion Bank, “conflicting financial statements have been common in the past,” which is why banks have relied on collateral, rather than financial statements, when lending. He called this practice “problematic” because it ties up funds and imposes costs on banks. Kindye said that banks often fail to achieve expected returns due to inaccurate statements, leading to bad loans and increased credit risk. He hopes that the Board’s new approach could resolve these issues, but he also doubts about the Board’s readiness, staff qualifications, and ability to provide quality service.

Kindye warned that “the system could become a breeding ground for corruption if loopholes are exploited,” and stated that “measures should be taken to enable people to use the service efficiently, without long queues.”

Fekadu argued that not much has changed over the years, and the reporting culture has not improved.

“The Board must begin enforcing the law now so that the system can finally change,” he told Fortune.

However, he warned banks to comply and assured that “debtors will not face difficulties in accessing services as long as banks apply the directive correctly.”

Under the new regime, banks are forbidden from accepting financial statements that have not been filed with the Board. Companies required to file complete International Financial Reporting Standards (IFRS) reports are those with annual revenue above 300 million Br and more than 200 employees, while those that should comply with IFRS for SMEs are firms with at least 50 employees and annual revenue between 50 million and 300 million Br. Entities that fall outside these thresholds, as well as public and micro enterprises, are not required to file IFRS-compliant statements to obtain loans.

Nonetheless, Fikadu insisted that these businesses should voluntarily adopt IFRS.

“The Board will be responsible for approving this report,” Fekadu told Fortune.

Companies required to comply with IFRS and seeking bank loans should file their statements with the Board and secure a stamp of approval, which banks are required to use as the sole reference when lending. The Board’s drive to enforce the law has drawn praise from some members of the accounting profession.

“It’s long overdue,” said Tilahun Girma, an auditor and country manager at PKF Global, a London-based accounting firm enlisting 21,000 professionals in 150 countries. He commended the Board for finally “going by the book” and companies had been given “sufficient time” to prepare, train their staff, and upgrade their technology. He argued that the “only way” to improve the reporting culture is through strict enforcement.

“The rule should have been implemented years earlier,” he told Fortune. “Unless institutions are forced to follow the law, the problem will not be solved, and the culture will not change.”

However, Tilahun also acknowledged a persistent weakness, claiming that most companies “don’t see finance as the brain of their business.”

“They don’t invest in strong financial systems or hire trained and experienced professionals,” he said. “Instead, they choose unqualified people for critical financial positions.”

Tilahun criticised the neglect he sees among many companies.

“These aren’t merely private companies but also public-interest companies that operate with public resources,” he said. “These companies must follow the law, pay taxes correctly, and get loans based on accurate performance.”

The Ethiopian Professional Association of Accountants & Auditors (EPAAA) was established in 1972 to promote the development of accounting and auditing professionals. One of the oldest civic groups in the country, it has garnered over 1,400 members, over 90pc of whom are certified accountants, with auditors and associate members comprising the rest of the roster, and is registered under and accredited by the Board.

Its leaders voiced their support for the Board’s latest move, characterising its strict enforcement as “a long-awaited decision welcomed by the professionals.”

However, its senior leaders, who spoke on condition of anonymity, observed that confusion had emerged as some banks began demanding that all debtors file their statements with the Board, regardless of whether the law required it.

“This misunderstanding is a concern the Board needs to address,” one leader told Fortune.“If eligible businesses are denied loans due to confusion, this could push some into bankruptcy.”

Many business owners, unfamiliar with IFRS reporting, could also face hefty costs if banks demand three years of statements for performance assessment. Preparing such reports requires hiring auditors and sometimes advisory firms, with expenses that are often steep. The shortage of IFRS experts led Association leaders to warn that the sudden enforcement could strain the few available professionals and result in lower-quality outputs. Without a proper rollout, they cautioned, the system could become vulnerable to corruption.

Fikadu, the acting director, conceded that some confusion has surfaced among the banks over which companies are required to file statements. He disclosed that the Board had sent letters to clarify the rules.

Bankers acknowledged the merits of the policy but voiced reservations about implementation. According to Demissew Kassa, secretary general of the Ethiopian Bankers Association (EBA), commercial banks “support the enforcement of the rule” but have “serious questions about the Board’s capacity.”

Demissew argued that if corporate borrowers were required to maintain accurate financial statements and these were reviewed by the Board, banks could finally rely on the numbers in their lending decisions, reducing risk and non-performing loans (NPLs), a positive development for the industry. But he warned that the new process “could disrupt banks’ credit operations.” He questioned how quickly the Board could review the filings, fearing that loan approvals could become “long, slow, and heavily bureaucratic.”

Fikadu rejected these anxieties, attempting to reassure doubters about the Board’s capabilities. He disclosed that a dedicated department has been established to handle the work and ensure there would be no delays. According to Fikadu, the Board is not required to review every statement, asserting that “banks should trust the auditors because the Board is a regulator of auditors, not a reviewer of each financial report.”

He sees the Board’s role as receiving and registering all financial statements, not as guaranteeing their quality. If a company is a public-interest entity, the Board may review its statement, a process that takes longer. It will take criminal action against auditors who violate the law, including revoking licenses. The Board recently reviewed the work of 120 audit firms, identified several shortcomings, and provided feedback and corrective measures. It revoked the license of one audit firm for allegedly failing to act ethically.

“The Board’s current task is only to file the financial statements and stamp them, which takes no more than five minutes,” he said.

Tadesse Hatiya, CEO of Sidama Bank, echoed these concerns. He has frequently criticised the practice of companies submitting different financial statements to banks and tax authorities.

“Many debtors claim to be very profitable and to have large stocks in storage, but during bank visits, the situation is often the opposite,” he said. “The Board’s supervision will help banks obtain accurate financial statements and issue loans based on authentic information.”

Tadesse argued that banks could build healthier loan portfolios if they depended on statements filed with the Board, but warned that implementation could be disruptive. Many companies may struggle to prepare IFRS-based reports and submit them for approval, particularly given the limited number of professionals with IFRS skills available in the country. He also questioned the Board’s capacity and accessibility.

“How will debtors in regional states submit their statements if the Board doesn’t have regional branches?” he asked. “Requiring debtors to travel to Addis Abeba would not be fair.”

Fekadu disclosed that the Board is working to expand accessibility by opening regional branches and investing in technology.

“For now, institutions operating in the regional states will have to come to Addis Abeba in person to file their statements,” he said.

However, Tadesse contended that the Board’s mandate should involve more than stamping documents.

“Simply telling banks, ‘Bring me the file, I will stamp it, then you can lend,’ is not enough,” he said. “If the Board stamps statements without review, it will not solve the underlying problem.”

He pointed out that stamp fraud is not uncommon, with some auditors even selling stamps. The Board, he insisted, “must ask the audit firms whether they actually conducted the audit before accepting the statements.

“Otherwise, the system won’t achieve its intended purpose,” he told Fortune.

Corporate debtors have also voiced unease about the new requirement. Tamiru Birhanu, general manager of Alo Coffee Plc, is worried that immediate enforcement “would particularly affect businesses.”

“If companies are denied loans under the new rule, they could face bankruptcy,” Tamiru warned, advocating for a grace period to allow time for compliance.

Federal Judges Pause VAT Mandate on Laywers

Posted on November 30, 2025December 3, 2025 by Digital Editor

A federal Court has suspended the enforcement of a contentious directive from Ethiopia’s Ministry of Finance mandating all legal professionals and service providers to register for value-added tax (VAT), regardless of income level.

The temporary suspension followed a lawsuit filed by seven lawyers who argue that the directive distorts the nature of legal work and imposes undue financial burdens on practitioners.

The challenge was lodged at the Administrative Bench of the Federal High Court’s Lideta Division, on Chad St., following months of protest from members of the legal community. The directive, published on the Ministry of Finance’s website and registered with the Ministry of Justice, sought to eliminate the income threshold that previously exempted many professionals from VAT registration. Legal practitioners, however, contend that the rule misclassifies their profession as commercial activity and undermines both their financial autonomy and professional identity.

“This directive is unfair and misrepresents the nature of our work,” said one of the lawyers involved in the litigation.

Three months ago, tensions came to a head when hundreds of federal lawyers convened for a general assembly to air grievances over the directive. During this meeting, the Federal Bar Association formed an 11-member committee to lobby the Ministry of Finance for a solution. The Association warned that if no agreement were reached, the matter would go to court.

However, Association leaders later decided not to bring the case themselves, asserting that their role as watchdogs prevented them from advocating on behalf of individual lawyers. Instead, seven lawyers – Mebtayehu Alehagn, Mewal Berhe, Thomas H. Michael, Mesfin Beyene, Roba Tsegaye, Hailu Hasena, and Yonas Woldeyes – filed suit against the Finance Ministry. On November 6, 2025, the plaintiffs appealed to the judges, seeking a temporary suspension of the directive, arguing it would cause them “irreparable harm.”

The Court hearing was presided over by a three-judge panel. The plaintiffs contended that the Ministry of Finance lacked legal authority to issue the directive, which they argued violated the Constitution, the law that governs VAT, and administrative procedures. They called for the suspension of the directive pending a final ruling.

However, the plaintiffs appealed for an immediate injunction, noting the directive had already been registered with the Ministry of Justice and published on the Ministry of Finance website. They said that if not stopped, the order would become enforceable and their lawsuit would become meaningless. The plaintiffs asked the Court to act before formal deliberations began, stating that continued enforcement would cause them harm and undermine their case.

The Ministry of Finance, represented by Abraham Rega, objected in writing to the suspension. He claimed the directive had already been enforced and that suspending it would not serve the plaintiffs’ interests. According to Abraham, VAT is collected from clients who receive legal services, not from the lawyers themselves.

“The plaintiffs don’t pay the tax out of their own pockets,” insisted Abraham, urging judges to keep the directive in place.

The Ministry’s lawyer warned that suspending the directive would result in a loss of public revenue and, in turn, harm the public interest. He argued that the directive applied not only to lawyers, but to many other professional service providers. He also noted in his defence that the seven plaintiffs represented only a small fraction of those affected. The Ministry maintained that the new rule was part of a transition from the old turnover tax system to VAT and that it was necessary for effective tax management.

The Court ruled that the directive should be suspended only for the seven lawyers who filed the lawsuit, pending a final verdict. According to the judges, suspending the directive in its entirety could result in a loss of government revenue.

However, the ruling was not unanimous. A judge, Yusuf Mohammed, dissented, arguing that the directive should remain in effect. According to the Judge, since the directive had already been approved and lawyers were required to register for VAT, suspending it would not prevent its consequences unless it was fully revoked. Nevertheless, the majority – Abdisa Dashura and Kedir Endris – ruled in favour of the temporary suspension.

The Court scheduled opening arguments for December 24, by which time more lawyers are expected to join the lawsuit, asserting a vested interest in the outcome. As the legal battle unfolds, the case has drawn attention to the tension between government efforts to broaden the tax base and the concerns of professionals who say the new requirements fail to account for the realities of their work.

Special Economic Zones Falter as Investment Plans Miss the Mark

Posted on November 30, 2025December 3, 2025 by Digital Editor

The federal government’s drive to accelerate industrialisation through Special Economic Zones (SEZs) stumbled early in the current fiscal year, revealing cracks in the Ethiopian Investment Commission’s (EIC) capacity to turn bold aspirations into tangible results.

Aspiring to generate 400 million dollars in the first quarter alone through a proxy-production scheme, designed to displace imports with domestic output, the Commission fell markedly short, delivering only 53pc of the target. The miss, despite expanded investor engagement, revealed the gap between planning zeal and execution reality.

The numbers were, on the surface, conflicting. While foreign direct investment (FDI) posted a modest 2.2pc year-on-year increase to reach four billion dollars, and over 544 new and expanded projects received permits, the flagship proxy-production scheme lagged. Planned around 21 substitute products and 32 participating firms, the programme unexpectedly ballooned to 102 products and 175 companies. But the volume of actual production dropped to 211 million dollars, 189 million shy of the target and a 43pc drop from last year.

The discrepancy speaks to an implementation issue. The Commission documented broad interest but failed to translate it into outcomes. Meanwhile, traditional manufacturers, operating outside the scheme, produced over a billion dollars in substitute goods, indicating that market momentum was not the problem, but perhaps the mechanism was. Even with some operational gains, the Commission faces a wide range of systemic constraints that threaten the pace of industrial transition.

“The first quarter shows that while there is progress, much work remains to be done,” said Zeleke Temesgen (PhD), the Commissioner. “We need to improve performance in the coming months to ensure the medium-term plan is on track.”

Fourteen industrial parks were upgraded to Special Economic Zones, contributing 123 million dollars in export earnings. The government’s promotional forum drew commitments of 1.6 billion dollars from 700 investors. Officials insisted that legal reforms and structured public–private dialogues were beginning to stabilise investor expectations and reinforce the broader push for private-sector-led growth.

Deputy Commissioner Dagato Kumbe conceded that the shortfall was due to internal and external constraints. The planning process began by identifying organisations capable of participating in proxy production, evaluating the sectors in which each could operate, and conducting consultations to create tailored production plans.

“The team agreed with the companies that certain tasks couldn’t be completed for various reasons,” he said. “We’ll work with these companies to compensate for the remaining months.”

Dagato attributed global instability, unexpected legal changes, and delays in securing raw materials to the results that led federal lawmakers to press for corrective action. The Trade & Tourism Affairs Standing Committee, chaired by Aysha Yahya, urged the Commission to prioritise investors committed to import substitution. She argued that partial or stalled project implementation undermines job creation and the broader investment agenda.

According to Aysha, the country needs projects to move quickly from planning to production if the Special Economic Zones are to fulfil their purpose. Her Committee has raised concerns over execution gaps across several sites. Her Deputy, Yohannes Mesfin, challenged the Commissioners, stating that some investors had not even activated the production equipment imported under tax-incentive schemes. He claimed that others had transferred production sheds to third parties, rented facilities without commencing operations, or failed to meet agreed staffing levels.

However, Yohannes acknowledged that the Commission had presented a thorough report but said that compliance issues remained acute. He cautioned that the success of the government’s medium-term plan depends on tighter oversight and enforcement.

According to the Commission’s own assessment, only six out of 13 surveyed organisations thoroughly used government incentives as intended. The remaining either passed the incentives to others or failed to use the machinery purchased with state support.

The investment program tied to export promotion performed better. Planned to generate 136.6 million dollars, it brought in 143.456 million dollars, led by agricultural goods, which recorded a 31.6pc increase from the previous year. Out of the 342.7 million Br allocated to the Commission for the fiscal year, 207.461 million Br was designated for the first quarter. Spending reached 183 million Br, 88pc of the quarterly plan.

The Commissioner disclosed efforts to activate projects had reached 50pc, with 10pc of current fiscal-year investment permits moving into implementation. He credited shifting promotional outreach from broad and generalised messaging to targeted promotion.

“As all special economic zones currently employ around 70,000 workers, we plan to add 20,000 job opportunities this fiscal year,” Zeleke said.

According to the Commissioner, in the absence of a fully operational proxy-product plan, the main emphasis remained on export performance rather than on reducing dependence on imports. He noted that most output from the eastern industrial area is destined for domestic markets, particularly the agricultural sector.

“It’s related to exports, not a standalone reduction,” he told Fortune.

The Commission’s difficulties drew scrutiny from analysts who say the gap between ambition and execution reflects deeper structural constraints. Henok Assefa, a tax, finance, and investment consultant at Prime Consulting Plc, sees Ethiopia’s import-substitution strategy resting on assumptions that require stronger institutional backing.

“Import substitution can’t succeed through goodwill alone,” Henok told Fortune. “It requires strategic planning, effective execution, and strong commitment.”

Henok pointed to high-forex consumption in sectors such as fertilisers, pharmaceuticals, capital goods, and fuel as the most pressing areas for substitution. He argued that capital-goods substitution takes time because it demands advanced machinery manufacturing, technology transfers, and specialised skills.

Henok insisted that foreign direct investment remains essential to complement domestic capacities. While acknowledging some progress, he warned that security challenges and the country’s poor performance in ease-of-doing-business rankings continue to deter inflows. Henok claims Ethiopia has the potential to attract up to 50 billion dollars in FDI, but secured only about five billion dollars last year. Policy uncertainty, regional insecurity, and bureaucratic hurdles have kept investor interest below potential.

“FDI needs peace and security to thrive,” he said. “There is also the ease of doing business index, and we’re far behind in that.”

Henok observed domestic investors inclined toward trading rather than manufacturing because it offers faster returns and fewer regulatory hurdles.

“Domestic investors prioritise imports over manufacturing,” he said. “Those currently in production are weak, and most of the financial system hasn’t been able to attract investors.”

Commission officials acknowledge the shortcomings but argue that much of the pressure derives from inconsistent investor behaviour and unresolved operational bottlenecks. Several companies have failed to activate equipment, transferred production sheds illegally, or failed to hire required personnel. The Commission warned that correcting these issues is essential to achieving medium-term targets and ensuring stable operations in industrial parks.

According to Commissioner Zeleke, the trend is especially visible in the Amhara and Oromia regional states, where support requests often go unanswered, limiting the agency’s ability to provide services and enforce compliance.

Europe Extends Forest Rule Deadline But Ethiopia’s Coffee Sector Still Feels the Heat

Posted on November 30, 2025December 3, 2025 by Digital Editor

The European Union (EU) has once again extended the deadline for its regulations on deforestation, offering another year for businesses to align with rules in keeping products linked to forest loss out of the bloc’s market.

The European Parliament, for the second time since the regulation was passed in 2023, approved the extension by a vote of 402 to 250, with eight abstentions. The decision allows large operators and traders until December 2026 to comply, and gives micro and small enterprises until June 2027. It is intended to provide more time for the block to smooth out the transition, strengthen IT systems for electronic due diligence, and shift the compliance burden to those initially placing products on the EU market, rather than subsequent traders.

For smaller operators, the process is simplified to a one-off declaration, reducing paperwork and administrative strain.

The regulation’s scope is wide, covering commodities such as coffee, cocoa, palm oil, soybeans, wood, rubber, charcoal, printed paper, and cattle products. Its declared objective is to stem climate change and biodiversity loss by breaking the link between European consumers and global deforestation. As the European Parliament readies negotiations with member states to finalise the law, the latest extension is widely expected to be the last.

The size of the stakes matches the scale of the challenge. Data from the Food & Agriculture Organisation (FAO) show that 420 million hectares of forest were lost worldwide between 1990 and 2020. EU consumption alone accounts for about 10pc of global deforestation, with palm oil and soybeans as primary drivers. Industry experts see the EUDR not only as a regulatory burden but as a strategic opportunity.

For Ethiopia, this added time offers a critical reprieve. It is a leading exporter of Arabica coffee to Europe, with nearly half of its annual shipments heading to EU markets. Last year, 40pc of the 469,000tns of coffee exported from Ethiopia was destined for European buyers, up from 37pc the previous year. The regulation’s initial deadline had given exporters barely a month to prepare, prompting widespread concern across the sector. Industry voices now see the extension as an opportunity to finish preparations, but warn against complacency.

“We’ve completed the preparation,” said Adugna Debela (PhD), director general of the Ethiopian Coffee & Tea Authority (ECTA).

Adugna acknowledged that the extra year gives authorities and stakeholders time to address the final details, but disclosed that buyers of Ethiopian coffee had already requested more time and that exporters should treat the window as an opportunity to improve training and compliance, not to delay further.

The coffee sector has shown growth in recent months. Coffee production has climbed 19pc over last year, meeting 84pc of the national quarterly target, according to Fitsum Assefa (PhD), minister of Planning. The global market has also moved in Ethiopia’s favour, with Arabica coffee prices jumping 87pc this year. As the acknowledged birthplace of Arabica, Ethiopia expects a bumper harvest of 1.4 million tonnes this year, a sign of improved yields and favourable international trends.

The authorities regulating the sector have launched an ambitious series of projects. The Authority has announced plans to construct 24 warehouses across four woredas within a tight 90-day timeframe, costing 100 million Br. A second phase is scheduled to add 34 warehouses for another 100 million Br. To modernise data collection and management, the Authority has distributed smartphones to key coffee-producing regions. According to Adugna, these efforts would support European compliance and help Ethiopian coffee fetch higher international prices.

A central pillar of the compliance push is the new Ethiopian Coffee Traceability Management System (ECTMS), built by a local firm, Vulcan ICT Plc. This digital platform draws on a national geo-spatial data hub, centralising information on coffee production from the farm level to export. The system integrates farm mapping, coordinates supply chains, assesses deforestation risks, and introduces transparency at every stage, aligning the sector with global sustainability standards.

“The digitalisation is not only for the EUDR,” Adugna told Fortune. “It also helps manage the timing of coffee plant renewal and replacement.”

His office has set an annual export goal of 600,000tns, targeting three billion dollars in foreign exchange for the 2025/26 fiscal year. In the most recent quarter, the official plan projected exports of 152,000tns worth 622.5 million dollars. Actual exports were 114,000tns, but generated 762.5 million dollars, a 47pc rise from the same period last year.

According to Adugna, independent evaluators, including Italian inspectors, had reviewed preparations and found the sector nearly ready for the new rules. A study carried out two years ago established that 99pc of Ethiopia’s coffee is cultivated in areas untouched by deforestation, providing an advantage for compliance. Adugna warned that any complacency or lack of attention among stakeholders could undermine this progress.

Despite the positive momentum, Adugna sees remaining challenges in the grace period to refine outstanding measures. He urged exporters to use the extension to provide more training, particularly for farmers and cooperative leaders.

However, not everyone in the industry faces the same challenges.

Gizat Worku, general manager of the Ethiopian Coffee Exporters Association, find the prior one-month window too narrow for proper preparation. While he welcomed the extension, he cautioned that exporters should remain vigilant.

“The country’s coffee comes from shaded, non-deforested areas, which simplifies compliance,” Gizat told Fortune. “High data collection costs and resistance from farmers, who often view new requirements as intrusive, continue to pose hurdles.”

The coffee supply chain is fragmented, with millions of smallholders contributing to exports. According to Gizat, a single container can hold beans from more than 100 farmers, complicating efforts to trace each shipment’s origins.

Some, like Ibrahim Hussen, a farmer in Jimma Zone’s Limu Kossa Woreda, in Oromia Regional State, have already adapted to the new standards. Hussen’s 205hct farm is certified for export and enjoys premium prices in global markets. He produces nine containers of coffee on his own farm, and with output from neighbouring producers, exports as many as 50 containers each year.

But for others, especially cooperative unions, compliance remains an uphill battle. The Yirgachefe Coffee Farmers Cooperative Union has gathered traceability data for only half of its 44,000 members. According to its Deputy General Manager, Andualem Bekele, most farmers do not understand the purpose or benefits of the new data requirements, and many have yet to submit information to the authorities. Lower production and higher data collection costs have forced the Union to cut its export target from 100 to 75 containers this year.

“This regulation extension gives us time to complete preparations,” Andualem said. “We need government support to ensure all farmers comply effectively.”

Samson Tizazu, a consultant and deputy general manager at Proma Partners Plc, recommended farmer-centric technologies such as GPS mapping and SMS-based data collection to ease compliance. Centralising data management at the cooperative or exporter level, integrating traceability into existing certification programs, and creating cost-sharing and price premium incentives for smallholders could make the transition smoother. He warned that without these measures, many farmers risk being shut out of lucrative European markets.

Samson also called for a strong national compliance framework, including incentives and penalties, a due diligence portal, random field audits with substantial penalties for non-compliance, and a public rating system to reward high performers.

“This is a collective responsibility,” Samson said. “Success will depend on coordination, clear roles, and a shared commitment to sustainable practices.”

Legislative Turf War Unfolds Over New Plant Protection Regime

Posted on November 30, 2025December 3, 2025 by Digital Editor

As federal lawmakers review the most ambitious overhaul of its plant protection and quarantine framework in over half a century, a growing institutional rift is threatening to derail the process.

A dispute raged over a contentious reallocation of regulatory powers between the Environmental Protection Authority (EPA) and the Ethiopian Agriculture Authority, two federal agencies whose mandates intersect on matters ranging from biosafety to invasive species and genetically modified organisms (GMOs). The draft legislation, now in the final stages of parliamentary review, is intended to modernise the plant quarantine system and align it with international phytosanitary protocols, including the International Plant Protection Convention (IPPC).

The bill sets out comprehensive provisions for pest risk analysis, import and export controls, phytosanitary certification, and the commercialisation of pest management tools.

However, EPA officials contend that the bill encroaches on areas explicitly within their legal jurisdiction under existing Council of Ministers’ regulations, particularly those governing biosafety, GMO oversight, and invasive alien species. They argue that the draft reassigns longstanding responsibilities such as approving imports of genetically modified materials and managing environmental risks from alien species to the Agricultural Authority, creating legal inconsistencies and operational redundancies.

Addisu Tibebu, head of the EPA’s Environmental Crime Protection & Inspection Desk, warned MPs during a November 26, 2025, hearing that several articles in the bill were “almost word-for-word” replications of EPA mandates. He was joined by EPA’s Ecosystem Director, Terresa Chemeda, who flagged the duplication as a recipe for blurred accountability. They fear the draft could undermine Ethiopia’s compliance with global biosafety commitments, including the Cartagena Protocol on Biosafety, for which the EPA serves as the designated authority.

“Checking for genetic modification is our mandate, ensuring biosafety is our responsibility,” said Addisu, demanding clarification.

Officials of the Agriculture Ministry dissented. According to Teklu Baissa, the Ministry’s plant protection and control legal adviser, who has assisted in preparing the draft, the document was designed to avoid any conflicting mandates. He argued that federal agencies should operate in harmony and that any overlap would be corrected.

However, EPA officials have raised concerns beyond genetic modification. They fear that provisions governing import permits and phytosanitary certifications also repeat existing biosafety rules. The bill requires imported plants to be verified as safe through research and risk analysis, accompanied by a phytosanitary certificate from the exporting country and a release permit from the agricultural authority. Items classified as restricted will need import permits, and re-exported materials should secure a new certificate if repackaged.

EPA officials argue these layers introduce duplication and confusion.

Addisu told federal lawmakers that the issue is not about bureaucracy. He insisted that several laws require harmonisation and that biosafety responsibilities set through international agreements should be reassessed before the bill is voted into law. He recalled that the Authority has long collaborated with agricultural officials on matters related to genetic modification, with the Agriculture Authority acting only after EPA approval.

“This is still our mandate, and it must be respected,” said Addisu. “However, some collaborative schemes can be added.”

Federal Environmental officials’ concerns were echoed by Terresa Chemeda, noted that overlapping responsibilities had historically weakened environmental governance. He argued that the draft proclamation restates provisions already incorporated in the Biosafety Proclamation and urged members of the Standing Committee to iron out inconsistencies.

“If a work succeeds, everyone wants to claim the credit,” said Terresa. “If it fails, each side denies responsibility. We must prevent this.”

Lawmakers acknowledged the tension. According to Solomon Lule, chairperson of the Standing Committee, any ambiguity in institutional mandates harms the public by undermining service delivery. The Committee is reviewing the establishment proclamations of both agencies to determine whether contradictions exist.

“It requires a detailed examination of the establishment proclamations of both institutions to determine whether an overlap exists,” he said. “At the moment, it is under review.”

The bill before Parliament includes detailed rules on pest surveys, inspections, and import controls. Any plant intended for importation should undergo a pest survey to confirm that the production site and location are free of infestations. Wooden samples should comply with international standards. Imported soil for scientific research is to be accompanied by risk-reduction measures. Biological pest control materials cannot be imported, developed or used without a risk analysis.

The bill also proposes accepting plant quarantine treatments from exporting countries if their efficacy is verified.

EPA’s objections extend to invasive alien species management. It currently monitors and verifies the spread of invasive species in partnership with other bodies. The bill, however, assigns monitoring, prevention, and control responsibilities to the Ministry of Agriculture’s Invasive Alien Species Unit. According to the Authority’s officials, the mandate should either remain under EPA’s umbrella or be jointly managed. Without clarity, officials argue, the country risks weakening a system that relies on clearly defined lines of authority.

Officials from the Ethiopian Agricultural Authority (EAA) have sought to ease tensions. According to Wondale Habtamu (PhD), deputy director of the EAA, coordination is already well established. He acknowledged that EPA represents the country in major international conventions such as the Rotterdam, Basel, Stockholm and Biosafety Conventions, while the Agriculture Authority manages plant-related matters.

“This delegation is given to those who handle daily responsibilities,” he said. “We represent only the plant-related conventions. We collaborate with whatever technical support we need from EPA.”

He believes joint work on genetically modified organisms is standard practice and ensures Ethiopia meets international reporting obligations.

The Ministry of Agriculture maintains that the bill is essential for modernising the sector. Its officials argued the framework will enhance productivity by strengthening pest surveys, building early warning systems, using improved pest control technologies, and ensuring compliance with the International Plant Protection Convention. They see the bill as an instrument to prevent the spread of regulated pests and address longstanding gaps in the domestic plant quarantine structure.

Meles Mekonnen (PhD), state minister for Agriculture, told MPs that the bill, if passed, will protect Ethiopians’ rights over plant resources and support agricultural transformation. He argued the draft had undergone multiple reviews by the Ministry of Justice and the legal department of the Prime Minister’s Office. He insisted that the system would not create overlapping mandates.

“But we will re-examine anything that needs revisiting and make necessary clarifications,” he said. “Stakeholder feedback helps capture issues that may have been overlooked.”

The bill is expected to incorporate commercialising activities in the sector, to reduce dependence on foreign testing facilities by building domestic capacity. It proposes penalties for violations and authorises the adoption of new bylaws. Officials hope these additions will address longstanding economic, social, and environmental damage caused by pests.

The tension between federal regulators has attracted attention from experts who warn that any gaps in biosafety oversight could have steep consequences.

Gizachew Haile (PhD), a biotechnology researcher at Addis Abeba Science & Technology University, welcomed the bill’s alignment with international standards but urged caution over shifting responsibilities.

“If one genetically modified material passes through with weak inspection, it can affect both the environment and production,” he said.

The previous system regulating genetic modification, invasive alien species and quarantine matters was tightly linked to environmental protection. For him, the EPA and the Agriculture Authority are “inseparable and intertwined,” given the complexity of their responsibilities. He sees most international commitments on biosafety fall under the EPA’s supervision. Ethiopia submits an annual report to the Convention on Biosafety Activities. EPA leads the process, while technical information often comes from the Agriculture Authority.

The Agriculture Authority evaluates whether a genetically modified crop can boost production, resist diseases and suit local conditions. EPA assesses whether the material might harm the climate, wildlife, humans or the broader ecosystem. Gizachew recalled the late Tewelde Birhan (PhD), who led Ethiopia’s biosafety negotiations and secured EPA’s mandate through previous proclamations.

“Ethiopia resisted pressure to fast-track commercialisation of genetically modified crops, choosing instead to build regulatory capacity,” said Gizachew.

Gizachew also outlined the current process for commercialising genetically modified products. Materials are first submitted to the Agriculture Authority, then reviewed by the Seed Regulatory Department. Only after securing these approvals can products reach farmers. EPA conducts a parallel assessment to determine environmental safety. According to Gizachew, capacity constraints have constrained commercialisation for years.

Ethiopia lacks testing facilities and advanced laboratories, forcing companies to send samples abroad and incurring foreign-exchange costs. Investors remain hesitant due to the absence of domestic infrastructure.

New Directive Pushes Mandatory Safety Seats for Children

Posted on November 30, 2025December 2, 2025 by Digital Editor

The Road Safety & Insurance Fund Service has issued a draft directive proposing compulsory child-extension belts and age-specific restraint systems in vehicles to improve passenger safety for infants and young children.

The measure would oblige inter-city public transport operators to secure infants with extension belts, while private car owners would need to install child-restraint systems certified under Ethiopian quality standards.

The draft sets clear categories: infants under one year, below 10kg or 105cm, should travel in rear-mounted restraints lying on their backs; children aged one to four, weighing 9-18kg, would need rear-facing seats, and those aged four to seven, weighing 15-25kg, would require booster seats in the vehicle’s rear.

Drivers would also be accountable for ensuring all passengers in front and rear seats fasten their belts. Large mass-transit vehicles carrying more than 24 passengers would only enforce belts for drivers and front-row occupants. Newly imported vehicles must come fitted with belts aligned with national standards.

Exemptions are included for individuals with medical restrictions, subject to annually renewed certification. Two and three-wheelers remain excluded from the rules.

Council Greenlights Global Funding for National Energy, Skills Programs

Posted on November 30, 2025December 2, 2025 by Digital Editor

Council of Ministers approved over 314 million Special Drawing Rights (SDR) in new financing from the International Development Association (IDA) during its 50th regular session. The funds target clean energy expansion and regional skills transformation initiatives.

The largest tranche, 294.9 million SDR, will support the national program to accelerate sustainable energy access. It carries a 6-year grace period and a 38-year repayment schedule, aiming to strengthen electricity availability and reliability nationwide.

A separate 20 million SDR loan will fund the East Africa Skills Transformation and Regional Integration Project, also with a 6-year grace period and a 31-year repayment term. Both agreements are interest-free, subject only to a 0.75pc service charge, which the Council described as highly concessional and in line with Ethiopia’s debt management strategy.

The Council resolved to forward the agreements to parliament for ratification.

How the G20 Can Lead the Fight Against Global Inequality

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

This month’s G20 Summit in Johannesburg marked several historic firsts.

For starters, it was the Group’s first-ever summit in Africa, and the first to include the African Union (AU) as a full-fledged member. It also set less encouraging precedents. It was the first meeting boycotted by a key founding member, the United States (US), on spurious grounds, and the first in which that same country tried to prevent the host from issuing a final declaration. Equally unprecedented was South Africa’s decision to ignore the American threat and issue one anyway.

As G20 President, South Africa invited delegations from Africa and other parts of the world to participate as guests, demonstrating the continued importance of multilateral dialogue and cooperation. Building on the momentum generated by last year’s summit in Brazil, the Group also expanded its agenda to include issues of particular relevance to Africa and the broader developing world.

South Africa’s inclusive approach paved the way for another landmark moment. For the first time, G20 leaders formally addressed the issue of global inequality. The impetus was the recent report by the Extraordinary Committee of Independent Experts on Global Inequality. Chaired by Nobel laureate economist Joseph Stiglitz, the Committee (of which I was a member) synthesised a large body of research and drew on consultations with 80 prominent scholars to present a comprehensive picture of economic disparities worldwide.

The conclusions are hardly reassuring. Although global inequality has declined since the early 2000s, this is largely due to rising incomes in China. For the world as a whole, inequality remains stubbornly high and has begun to rise again. While inequality between countries has fallen, the gulf between the richest and poorest countries remains unacceptably wide. Nine out of 10 people now live in countries with high inequality, even by the World Bank’s relatively conservative standards.

The distribution of income within countries is equally distorted. Wage shares of national income have declined in most economies over the past few decades, while capital income has become increasingly concentrated. Large firms now account for the bulk of corporate profits, with multinational corporations taking the lion’s share.

These developments reflect a broader trend. The concentration of income and wealth at the very top. Of the two, wealth is far more unequally distributed, as its explosive growth in recent decades has been overwhelmingly skewed toward the already rich. More than 40pc of the wealth generated since the start of the century has gone to the wealthiest one percent, while the bottom half of the world’s population received a mere one percent.

Even within the top one percent, the gains have been largely captured by the ultra-wealthy, arguably the most extreme concentration of wealth in human history. The result is a class of global plutocrats whose unprecedented resources enable them to shape laws, institutions, and policies. They influence public opinion through their control of the media and tilt judicial systems in their favour.

The threat that this oligarchic class poses to democratic governance is compounded by the growing insecurity and frustration among workers whose livelihoods have become increasingly precarious, owing to job insecurity, stagnant wages, and weakened social protections. These pressures have already fueled political polarisation, the scapegoating of migrants and minority groups, and the deepening of gender-based inequalities.

Contrary to neoliberal economists’ claims, high inequality does not spur economic growth. It suppresses it. As mass consumption declines, so do the benefits of economies of scale. When inherited wealth is privileged over earned income, incentives to innovate shrink. And since the consumption and investment patterns of the ultra-wealthy are vastly more carbon-intensive and resource-depleting, extreme inequality also undermines environmental sustainability and climate action.

As we argue in our report, inequality has become an emergency that should be treated with the same urgency as climate change. Like the climate crisis, the inequality crisis can be partly attributed to the legacy of colonialism, as well as long-standing sociocultural structures. But above all, it reflects the legal, institutional, regulatory, and policy choices that have allowed a few to enrich themselves at the expense of everyone else.

There is no shortage of examples. Financial liberalisation and repeated government bailouts have protected wealth at the top. Stringent intellectual-property regimes have created monopolies over knowledge. The privatisation of essential public goods and services has further entrenched disparities. Outdated tax systems have enabled large multinational firms and wealthy individuals to avoid paying their fair share.

Taken together, these policies have dramatically shifted the balance between public and private wealth. As governments privatised assets and accumulated debt, often to subsidise or guarantee private capital, public balance sheets deteriorated while private fortunes soared.

The good news is that since these trends are the product of political choices, they can be reversed. But doing so requires a clearer understanding of the problem. Despite the explosion of research and the emergence of promising analytical methods, major blind spots remain, making it harder to design effective policies that curb inequality.

That is the central message of our report. While it includes many policy recommendations, its most urgent and practical proposal is the creation of an international panel of experts on inequality. This small, independent body would monitor inequality across multiple areas, consolidate and evaluate data, develop robust metrics, coordinate research, identify underlying causes, and assess the effectiveness of government policies.

Loosely modelled on the Intergovernmental Panel on Climate Change, the proposed panel would rely on voluntary contributions from researchers worldwide and serve as an authoritative and accessible source of information for governments and the public. Such knowledge would support policymakers genuinely seeking to reduce inequality. Perhaps more importantly, it would empower citizens to demand the policy changes and reforms needed to build just and equitable societies.

Month: November 2025