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Month: December 2025

Birr Creeps Higher as Central Bank Engineers Market Calm

Posted on by Digital Editor

The foreign-exchange market last week demonstrated the contours of a tightly managed currency regime under mounting pressure. Despite assertions by Central Bank Governor Eyob Tekalegn (PhD) that the economy faces no shortage of foreign currency, market behaviour revealed otherwise.

While headline rates for the Brewed appeared stable, the underlying dynamics told a more complex story, of divergence among banks, implicit signalling from regulators, and a market whose stability is more engineered than earned.

At first glance, the Birr’s movement seemed marginal, with little headline volatility. However, behind this apparent calm, a closer look at the banks’ postings and pricing strategies revealed a market increasingly divided by size, competitive posturing, and the unique relationship each bank has with the Central Bank.

For six trading days between December 22 and December 27, 2025, the overall numbers hardly signalled turmoil. The average buying rate for the Birr was about 152.36 to the dollar, while the average selling rate was nearly 155.23. The daily swings were small.

Instead of reacting to market signals alone, the foreign exchange market’s steadiness echoed strict adherence to policy and expectations that the Central Bank was about to inject liquidity. Market stability was engineered. The Brewed Buck showed what might be called a “gentle firming” across the week, less as a result of organic trading than as a function of disciplined pricing by banks and the signal sent by the Central Bank.

The banking industry as a whole maintained rates within a narrow and policy-mandated corridor. Banks signalled pent-up demand through slightly higher nominal prices, but the overall market remained locked, showing the effects of both administrative guidance and contained pressures.

By the week’s end, most banks posted buying rates in the tight range of 151.6 to 152.8 Br to a dollar and selling rates between 154.6 and 155.9 Br. The rates most commonly quoted were close to 152 for buying and 155 Br for selling. The entire market crept up by three to five cents, revealing not a sudden depreciation but a slow, steady drift that revealed ongoing depreciation bias. There were no sharp reversals by any bank, and the traditional spread of about two percent was not breached, save for a statistically negligible reading of 2.01pc at Lion Bank on a single day.

Even as nominal price levels increased, spreads remained steady. It was a picture of a currency in a managed crawl, neither fully pegged nor left to float.

But beneath these smooth averages, the details revealed another story. Some banks were clear leaders, others laggards. Oromia Bank repeatedly posted the highest selling rates, reaching 158.07 Br to the dollar on December 27, a notable outlier. Berhan Bank briefly joined those at the top, exceeding 156 on multiple days. These banks were effectively pricing their rates closer to where they sensed underlying demand, even as regulations kept the spread in check.

On the other end, banks like Tsehay, Amhara, Awash, and Zemen anchored the lower boundary, keeping their buying rates at 151.6 and 151.7 Br and selling rates at around 154.7 Br. Their persistence in the gap between the top and bottom rates unveiled differences in banks’ risk appetites and liquidity needs rather than simple chance.

The Central Bank operated on a plane of its own. Its rates declined slightly from 155.28 Br a dollar on December 22 to 154.99 Br on December 27. Rather than making markets, these rates signalled intent and anchored policy, acting as a reference for the market. The fact that the Central Bank’s posted rates trended down while private banks’ rates drifted up uncovered the tension between official policy guidance and real-world market pressures.

Despite daily movements being small, they trended in a consistent direction. No institution sharply reversed course, and none tried to compress spreads further, even as absolute levels rose. This uniform behaviour, along with the absence of outliers breaking from the group, defined the market as not an open competition.

One of the most notable themes over the period was the restrained behaviour of the largest private banks. Usually the first to move in response to depreciation pressure, Awash, Abyssinia, Dashen, and Zemen kept their buying rates below the 152 Br mark for most of the week. Even on December 27, when the overall average was pushed higher, Wegagen Bank, the sole exception last week among the five big private banks, posted a buying rate a little above that line, at 152.02 Br, and remained well below the more aggressive smaller banks.

The deliberate restraint seemed intended to protect bank balance sheets and manage customer expectations, rather than to chase marginal trading volumes.

The cautious approach of these large financial institutions was in sharp contrast to the actions of several third-generation banks. These newer and smaller banks consistently quoted buying rates well above the cluster formed by the established players. Oromia Bank, in particular, led the pack on the selling side, topping out at 158.07 Br on the last day of the week, though its earlier dominance on the buying side faded somewhat as the week went on.

Nonetheless, the most notable presence was the Central Bank itself. In recent weeks, the National Bank of Ethiopia (NBE) displaced even the most assertive commercial banks as the high reference point, with buying rates as high as 155.44 Br a dollar, over four Birr above the day’s lowest quote, on December 25.

At the bottom end of the market, the smallest and most liquidity-constrained banks set the lowest buying rates, with Tsehay Bank registering a trough at about 150.72 Br. The difference between the highest and lowest buying offers widened to 4.26 Br by December 27, a sizeable spread in a market meant to operate with uniformity.

Last week’s trading patterns can be grouped into three broad categories.

First are the systemically important banks (both state-owned and the biggest private players), who stick close to industry averages and view deviations as a statement about policy, not a commercial opportunity. Second are the assertive mid-tier and third-generation banks, which post higher rates to attract foreign exchange flows, standing out from the consensus. The third category consists of administrative outliers, including the Central Bank, who collapse the spread to zero, prioritising signalling over market activity.

These dynamics played out against the backdrop of the Central Bank’s increasing intervention.

On December 27, the Central Bank announced a foreign-exchange auction for 150 million dollars, the largest single injection to date. Even more striking, the Central Bank pledged to offer up to 210 million dollars in additional auctions between early January and mid-March next year. These were not simply liquidity operations but clear messages to the market that Governor Eyob would set the floor and the ceiling for foreign-exchange prices.

Needless Tax on Garment Risks Unraveling Industry Gains

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The national ambition for economic transformation has long been woven into the future of the textile and garment sector. For millions, these sectors represent more than the hum of machinery. They offer jobs, skills, and the promise of a life beyond poverty. Young women, in particular, have found in these textile and garment factories a crucial first step into the workforce.

However, a new administrative circular from the Ministry of Revenue now casts a shadow over this promising but fragile progress. The textile and garment manufacturers may soon face excise taxes, which could undermine their role as a beacon of opportunity.

Excise tax, by its nature, is intended to be selective. Its spirit is deliberate, not all-encompassing. Essential goods that support daily life have always been spared this burden. The law, revised in 2022, spells out its purpose. This form of tax is imposed on goods that harm public health, such as alcohol and tobacco, damage the environment, or are considered luxury goods. Clothing hardly fits the bill for a luxury.

For many families, garments are an everyday necessity, not an indulgence. Imposing excise tax on clothing through a broad reading of HS codes risks distorting the law’s purpose. It blurs the boundary between selective excise and broad consumption taxes like VAT, which could hit the most vulnerable the hardest.

Does this policy serve the greater good? Does it threaten to unravel hard-won gains for those at the bottom of the economic ladder?

The Ministry’s circular targets factories that might try to escape excise liability by classifying their activities as services rather than manufacturing. By focusing on specific HS codes, the directive authors may want to close perceived loopholes. However, guidance issued through a circular does not have the authority to amend existing law. Tax rules, especially those with far-reaching economic and social consequences, should derive from unambiguous legislative intent, not from administrative overreach that adds confusion.

Ambiguity in tax policy can erode the confidence of investors and workers alike. In a country striving to build an industrial base, predictability should be everything. Uncertainty in the rules undermines planning, investment, and job security. When the rules of the game are open to sudden changes, the most vulnerable are often the first to feel the impact.

Domestic garment makers already contend with fierce competition from imports, especially cheap secondhand clothing sold at low prices or arriving duty-free. These thrift garments capture the loyalty of budget-conscious families and undercut domestic producers. Manufacturers should also contend with a mounting stack of costs, including input materials, utilities, VAT, income taxes, and payroll expenses. Challenges with infrastructure and logistics only add to the burden.

Layering an excise tax on domestic products would make them even more expensive, pushing them further out of reach for ordinary families and weakening the sector’s competitiveness.

When the cost of garments rises, families may struggle to afford the basics. When factories face higher taxes, jobs are put at risk. The faces behind the numbers are overwhelmingly young women, many of whom are supporting families or saving for their futures. The loss of a single job in this context is not simply a statistic. It is a setback for gender empowerment and economic equity in a society where such opportunities remain limited.

Policymakers should weigh fiscal needs against social consequences.

There is precedent elsewhere for a different approach. Bangladesh, Kenya, and Vietnam have built thriving garment sectors without excise taxes on clothing. Instead, they rely on VAT frameworks, often zero-rated for exports, and incentives that attract investment and boost competitiveness. These countries have recognised that taxing essential goods stifles growth and discourages innovation.

Ethiopia’s official strategies for investment and industrialisation position manufacturing as a foundation of progress. Imposing excise through administrative fiat risks undermining this vision, shaking investor confidence, and slowing momentum. If the goal is to increase revenue, policymakers should look for better responses that do not sacrifice the industries that anchor so many livelihoods.

Ultimately, behind every government policy are people whose futures are at stake. Ethiopia’s progress depends on choices that balance fiscal responsibility and social justice. Policies should reflect not only the drive for revenue but the imperative to protect and uplift those working hardest for a better life.

AI Learns the Lyrics But Misses the Meaning

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While trying to work at a café the other day, I experienced the real war on Christmas. Hoping for the familiar hum of conversation and music, I was surprised upon entering that no one was talking. Still, I sat down with my notebook and attempted to focus my thoughts, but something was playing havoc with my concentration.

The music seemed eerie. I lifted my head, listened, and became disturbed.

What seemed at first to be a playlist of winter classics and Christmas carols offered something else entirely. The melodies were more or less the same – recognisable as “Silent Night,” “The First Noël,” and “Winter Wonderland.” But the voice was generically earnest, a bland baritone straining, I felt, from nowhere to nowhere.

Worse, the lyrics were wrong. Not a mistake here or there, but a pattern of errors. References to the nativity were expunged, replaced with metaphysical blather. And the human parts had gone missing as well. In the love song “Winter Wonderland,” we should hear this nice couplet about a pair taking a walk:

“In the meadow, we can build a snowman / Then, pretend that he is Parson Brown”

But the song I heard in the café garbled the lyrics:

“In the meadow, we can find a snowman / Then, pretend that he is a nice old guy”

This was followed by some meaningless verbiage about dancing the night away, where “guy” is lamely rhymed with the sun being “high.” Again, the actual song:

“In the meadow, we can build a snowman / Then pretend that he is Parson Brown / He’ll say, “Are you married?” We’ll say, “No man, / But you can do the job when you’re in town.”

These four lines carry so much meaning. The young couple are telling a story to each other about a shared experience. In this tale, Parson Brown is a specific person, whose physical attributes can be gathered from the reference to the snowman. Their attitude toward him is as playful as it is respectful. These lovers, who are not yet married but want to be, are skirting around the rules for the moment, acting out their love in public before conforming to the era’s conventions.

The layers in these lines descend gently upon the listener, like snowfall in sunlight. My mind was awaiting all that; the vacuum of “nice old guy” strained the neurons, or the soul.

I first heard “Winter Wonderland” about 40 years after its lyricist, Richard Bernhard Smith, died in 1935; another 50 years have passed since then. Behind these lyrics is a young man, inspired by snowfall in a park, who undoubtedly knew something about romance. Smith died of tuberculosis not long after writing the song, which lives after him, preserving his playful sense of how we might be together, passed on from those who sing to those who listen.

Art lives until it is killed. In this case, the death of “Winter Wonderland,” and Christmas music more generally, was caused by a set of algorithms that we flatteringly call artificial intelligence (AI). I guess that someone, somewhere, prompted an AI model to generate winter and Christmas songs that avoided “controversial” subjects such as divine and human love, resulting in mush. In a reverse sublimation, the sacred becomes slop.

Many American conservatives have latched onto the idea that foreigners, particularly non-Christians, have somehow sullied Christmas.

But who are the true aliens in this Christmas story?

The non-human entities.

The tortured version of “Winter Wonderland”, which I was forced to listen to, is the tip of the iceberg. The assault of algorithms designed to monopolise attention has severely weakened many basic cultural forms, including music and holiday ritual, as well as classroom teaching, the sharing of food, and simple conversation. Of course, a few people make a lot of money from this. And, in some notable cases, those who profit from the culture-wrecking machine are the same ones who blame foreigners for taking Christmas away from us and destroying our civilisation.

Meanwhile, the people who actually sing the songs have trouble finding listeners.

“Winter Wonderland” is a bit of light music, with a subtle message about romance that requires some patience and experience, as well as a sense of humour. Any references to the holiday are indirect and playful. The imaginary Parson with the melting reproof, the wandering unmarried couple.

Christmas bears a message of love: “And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn.” No machine can comprehend this emotion, a fact that those who tout the inevitability of machine superiority do not want us to grasp. Instead, they want us to turn on one another, while their algorithms desecrate a fundamental part of our humanity, one song at a time.

When Data Goes Missing, Horticulture Drive May Risk Wilting

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Ethiopia’s diverse ecological zones, stretching from fertile highlands to sunny valleys, are poised to deliver more than subsistence farming. With the right strategy, these regions could serve as a platform for exports to Europe and the Middle East, creating jobs and increasing foreign earnings.

The country is on the verge of a horticultural revolution that could change its place in the global agricultural market. But unlocking this potential requires more than hard work in the fields. It calls for modern tools and strategic planning.

I have seen firsthand how powerful geospatial data can be. Developed through a partnership between the Ministry of Industry and the World Bank, this Atlas provides a detailed blueprint for the manufacturing sector, mapping resources and infrastructure in real time. A similar approach, if applied to the horticulture sector within the Ministry of Agriculture, could help Ethiopia achieve the ambitious goals set out in its national horticulture strategy. Those goals are ambitious by any measure.

Ethiopia plans to increase the horticulture sector’s contribution to GDP from 4.5pc to 12pc; raise foreign exchange earnings from 650 million to 3.3 billion dollars; create jobs for two million more people; and, double the annual per capita production of fruits and vegetables from 50.2Kg. The strategy even sets a target for sequestering 131 million tons of carbon dioxide in soil and crops over the next decade.

But these numbers should go beyond aspirations. They represent a concrete vision for the future based on data-driven planning.

The horticulture sector is already a patchwork of promise. It includes table grapes, avocados, strawberries, mangoes, bananas, and vegetables like tomatoes, onions, and peppers. Add to these herbs, and a strong floriculture industry centred on roses and ornamental cuttings. These crops thrive in 18 distinct agroecological zones. The sector already provides jobs, especially for women and youth in rural areas, and supports a growing agro-processing industry that adds value through juicing, canning, and drying.

However, several barriers stand in the way of scaling up. Supply chains are fragmented. Cold storage is inadequate. Water is scarce, and power shortages are frequent in critical regions. Roads and air links to export hubs are lacking, making it hard to compete on speed and freshness in demanding overseas markets.

The recent opening of Cool Port Addis at Mojo Dry Port and improvements along the Ethiopia-Djibouti railway mark a turning point. With modern cold-chain facilities, perishable goods can move faster, reducing post-harvest losses that can reach up to 40pc for some crops. This infrastructure is a game-changer, giving exporters a shot at delivering avocados to European supermarkets or roses to the Middle East in a matter of days.

But such gains could easily stall without a transparent and data-driven strategy. That is where a resource atlas comes in.

As a member of a national technical committee that developed the National Manufacturing Industry Resource Atlas, introduced in draft form in July 2025, I see it as a model for what can be achieved. Backed by the World Bank and executed by a private GIS consulting firm, the Atlas is more than a report but an interactive platform.

It maps the country’s resources, from water, energy, and transportation to ICT networks, industrial parks, mining, and labour pools. It used spatial data from various agencies, including the Ministry of Water & Energy, Ethiopian Electric Power, and the Ethiopian Statistical Service. The platform enables planners to overlay layers of data, such as energy access (areas within 10Km of transmission lines or 25Km of substations), revealing that about 283,320Sqkm, representing 25pc of the country’s surface area, has viable power for manufacturing.

The methodology behind the Atlas started with identifying relevant data sources, then collecting geospatially referenced data, cleaning and validating it, and finally standardising the information for thematic mapping. The process is highly collaborative, bringing together federal and regional stakeholders to ensure accuracy. The outcome is a centralised repository that supports decisions such as where to build factories, close to water basins, such as the Abay’s 52.6 billion cubic meters of water, or along key transport corridors.

The Atlas has already helped highlight industrial clusters, such as the 171 large-scale firms in Addis Abeba and the 3,163 medium-scale enterprises across the country. It has revealed opportunities for co-locating agro-processing near high-density cattle zones, such as the Arsi Zone, and exposed disparities, such as the heavy concentration of manufacturing in central Ethiopia.

The horticulture sector shares many parallels with manufacturing. Both require reliable access to inputs, energy, water, and skilled labour. Both need infrastructure, like roads, railways, power, ICT, and benefit from proximity to processing centres and export hubs. The national horticulture strategy sets out a vision for eight horticultural corridors, 200 production clusters, and 10 “horti-parks” over the next decade.

Precision is crucial to make this plan work. A horticulture resource atlas, modelled on the manufacturing tool, could map agroecological suitability, surface water flows, road access (including proximity to dry ports like Mojo), and crop yields. It could pull data from surveys conducted three years ago by the Ethiopian Statistical Service on vegetable yields in the Rift Valley or on fruit clusters in Sidama Regional State, and overlay them with ICT coverage, which now reaches 97pc of the country on 2G networks, opening up opportunities for smart farming.

The power of this approach is easy to imagine. By geospatially analysing soil maps, such as identifying Vertisols suitable for high-yield vegetables, the Atlas could spotlight promising corridors for irrigated horticulture, cutting reliance on rain-fed farming. It could direct resources toward clusters near the Ethiopia-Djibouti railway, ensuring the quick shipment of perishable goods. For new horti-parks, the Atlas could prioritise sites near universities and TVET schools, which are key for developing skills in post-harvest technology.

Drawing on labour mapping from the manufacturing atlas, it could help policymakers target youth employment in regional states like South Omo, which is rich in fruit but lacks infrastructure.

An atlas like this would not be limited to a technical tool. It would be an economic catalyst. Ethiopia’s horticultural exports could increase rapidly by leveraging trade deals such as the African Continental Free Trade Area (ACFTA) and the European Union’s Everything But Arms (EBA) agreement. Modern cold chain facilities address a crucial bottleneck, but mapping is needed to ensure development does not get lopsided, such as the concentration of 132 firms in Bishoftu.

By supporting domestic supply chains and reducing imports of costly inputs like fertilisers, agro-industries can be established that create value at home and generate new jobs, especially for women’s cooperatives.

Some critics may say that agriculture is too seasonal or fragmented for this type of mapping. But the manufacturing atlas has already proved it can handle dynamic factors such as changes in energy supply or mining shifts. Data gaps can be closed through partnerships, as the Ministry of Industry worked with the World Bank. During my time on the committee, GIS tools did not simply break down institutional silos. They build new connections across ministries.

If the Ministry of Agriculture adopted climate projections, it could help the sector manage risks such as drought, which affects 40pc of horticultural production.

Why Pragmatic Multilateralism Still Delivers in a Divided World

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Few would deny that there has been a shift away from multilateral cooperation in recent years. As the world becomes more multipolar, geopolitical tensions are hampering efforts to devise common solutions to shared problems, and rising nationalism and fiscal crises within many traditional donor countries are threatening the institutions on which multilateralism depends.

As a realist, I recognise that today’s world is more dangerous than the one we inhabited not so long ago. But I am also confident that possibilities for long-term global collaboration remain.

I have seen firsthand that multilateral cooperation often delivers results that otherwise would not be attained. My confidence stems from my experience as the chair of Gavi, the Vaccine Alliance. As my five-year tenure draws to a close, I find myself reflecting on what has underpinned Gavi’s success over the past 25 years and what this experience can teach us about adapting multilateralism for a rapidly changing world.

The first lesson may sound simple, but it is too often forgotten. Always be mission-driven. Gavi exists to save lives and protect health by expanding access to vaccines in lower-income countries. It is this clarity of purpose that has helped halve child mortality in 78 countries and protect every one of us against the threat of infectious diseases. Nor is there any secret to our success. We have done it by uniting a multitude of public and private stakeholders, many with divergent interests, behind a common purpose.

Gavi has always been a coalition of the willing, bringing together national governments, United Nations agencies, philanthropies, vaccine manufacturers, innovators, development banks, research institutions, and civil society. With its diverse skill set, expertise, and political clout, it has protected over half the world’s children from preventable diseases in any given year and provided the world with core competencies during crises like the COVID-19 pandemic, when we led the global vaccine response.

In a more multipolar world, similar approaches will be needed to drive progress in other areas where the provision of public goods (conflict resolution, education, health security, equitable access to AI) is too important to be held hostage by adversarial politics and sectional interests.

That leads me to the second key lesson. Be mission-driven, but country-led.

Gavi was founded in the spirit of partnership, not paternalism. Promoting national self-reliance has always been at the heart of its mission. Countries pay more toward the cost of their vaccine programs as their national incomes rise, up to the point where they can fully sustain their own immunisation services. Some countries have even transitioned from recipients to donors.

This responsiveness to country needs has made us relentlessly focused on innovation. In 2024, Gavi embraced the historic introduction of malaria vaccines because we recognised how unjust it was that so many countries, particularly in Africa, had to wait so long for such a breakthrough. The same year, Gavi also launched a financial innovation, the First Response Fund, to provide surge financing for the procurement of mpox vaccines, saving precious time that otherwise would have been lost raising additional funding.

Today, Gavi is directing the same innovative zeal toward the future rollout of vaccines against tuberculosis, the world’s deadliest infectious disease. It is also advancing a new initiative, the African Vaccine Manufacturing Accelerator, with strong backing from the European Union (EU) and other donors, to support the African Union’s (AU) ambitions for regional high-value manufacturing. I predict we will see a far greater role for, and collaboration between, regional economic and political blocs as the key drivers of multilateralism in the years ahead.

Every coalition needs strong governance and leadership. That is why Nelson Mandela was chosen as Gavi’s first chair. But ensuring that the interests of every stakeholder remain aligned is no simple task, and this insight was not lost on me when I was approached for the role in 2020. I was honoured, and I could not help noticing that the Gavi board had 28 seats, the same number of member states whose interests I sought to align when I was president of the European Commission.

Throughout my tenure at Gavi, I have been guided by the enduring wisdom of Jean Monnet, a leading postwar advocate of European unity: “Nothing is possible without people, but nothing lasts without institutions.” Gavi is truly a unique institution. Not only is it a broad, inclusive alliance of national and international, as well as public and private, entities. It is also an international organisation that has managed to avoid paralysis and inertia, unlike some major intergovernmental bodies. It has done so by maintaining a laser focus on protecting children, even in war zones where the only respite from fighting came from the need to vaccinate populations.

Countries will always have reasons to disagree, but if anything can elevate the cause of peace above extreme national interest or ideology, it is the protection of children. Throughout my life, I have been at the heart of many seismic changes, from the Carnation Revolution in my native Portugal in the 1970s to the effort to advance peace, reconciliation, and democracy in Europe (for which I had the great honour of receiving the Nobel Peace Prize on behalf of the EU). In each case, historic changes needed a catalyst, which is exactly the role that Gavi has played in promoting public health.

As we enter a more multipolar world, I would urge everyone to recognise the need for more mission-driven public-private partnerships like Gavi. There simply is no better way to address the challenges of our age.

Banks Face Trust Test with the Capital Market Becoming Operational

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The capital market reform is transforming from an idea into reality, marking a new era for the financial sector. Licenses are being issued, crucial institutions are joining the system, and early market activity is starting to take shape.

At the heart of this transformation are commercial banks, which remain the backbone of the financial system and the main custodians of household savings. As the market grows beyond its initial phase, these banks face an important question.

How should they position themselves for the future?

The focus so far has been on tangible milestones, such as the licensing of investment banks, preparations for the first trades on the Ethiopian Securities Exchange (ESX), and ensuring everyone follows new regulatory guidelines.

These efforts are essential, providing the foundation for a market that has never before operated at this scale in Ethiopia. But meeting regulatory requirements and preparing to do business on the Exchange are only the beginning. They do not guarantee that the capital market will reach ordinary households, everyday savers, or long-term investors. Nor do they ensure that the domestic savings will be channelled effectively into the country’s future.

As policy makers and regulators work to build up the new system, commercial banks have responded by establishing investment-banking project offices and forming partnership agreements. These are positive steps, showing that banks are engaging with the reforms early and getting their houses ready for the new rules of the game. But as banks make these moves, a quieter, more practical question is beginning to surface, one that concerns not only transactions and compliance, but the very trust households place in their banks.

An issue is the assumption that for banks to play a fundamental role in the capital market, they should form full-scale investment banks. In a newly liberalised system, it is natural to see licenses, project offices, and institutional partnerships as signs of progress. But capital markets and investment banks are not one and the same.

Investment banks focus on corporate finance, underwriting, and large transactions. Capital markets, on the other hand, encompass a wide range of trading venues, intermediaries, financial products, and, most importantly, investors from all parts of society. As the market expands, commercial banks are set to become the main bridge between the market and households. This is not a coincidence. For decades, banks have linked household savings to the broader economy.

How this transition, its timing, pace, and oversight are managed will be crucial to maintaining public trust and financial stability.

How will their existing clients experience this change? Who is responsible when household savings are exposed to market risk?

Right now, most talk of “advisory” services focuses on investment banking, helping big clients raise capital or navigate mergers. But as ordinary savers enter the market, the real advisory questions will become around how banks introduce risk, set expectations, and protect trust.

Currently, most activity in the capital market remains institution-led, involving interbank trades, treasury bills, and financial products for other banks, microfinance firms, and insurers. There are early signs of household participation, such as expanding brokerage access for individuals, but simply opening the market to more people does not resolve the deeper issue of institutional responsibility. Transactional access can be rolled out quickly, but preparing for real household participation takes time and careful planning. It cannot be done on the fly.

This brings banks a delicate question of their current structures, client interfaces, and risk management systems designed to support households as investors.

Are they built for a deposit-focused system with a completely different risk profile?

As the primary channels for household savings today, banks are central to this transition. They may not be the only institutions involved, but they are ultimately responsible for how trust in banks extends to trust in the broader capital market. Household investment activity is not limited to the privileged few. It is a crucial part of building a strong, resilient capital market, mobilising domestic savings, and supporting Ethiopia’s long-term growth.

Banks that manage this transition with care and foresight will help shape not only the next phase of the market, but also the foundation of confidence on which the entire financial system rests.

Women are the Economy. Why Don’t Products Reflect That?

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Worldwide, women manage an estimated 32 trillion dollars in annual spending and are projected to control three-fourths of discretionary spending within the next five years. Yet, across nearly every industry, most products fall short of meeting their needs, reflecting a tacit assumption that women are somehow a niche market.

For decades, companies have relied on superficial gestures. Pink packaging, token “female-friendly” campaigns, and even the so-called pink tax, whereby women are charged more for the same product. Many of these “personalised” offerings amount to little more than marketing in disguise.

The result is a persistent gap between what women need and what companies deliver. Closing it requires designing products and services that reflect women’s priorities, decisions, careers, and lived experiences.

Historically, women have been expected to adapt to systems and services that were not built with them in mind. The evidence is everywhere. Personal protective equipment is rarely made to fit them, smartphones tend to be too large for smaller hands, and voice assistants consistently fail to recognise female voices. When male data are used as the benchmark for what’s considered “normal,” women are underserved, and entire markets remain underdeveloped.

This oversight represents one of today’s largest untapped growth opportunities.

Consider financial services. Women add five trillion dollars to the global wealth pool each year, but products still cater to men’s earning patterns and priorities. Despite managing a greater share of household budgets, women are up to eight percentage points less likely than men to feel financially skilled. Products that account for caregiving breaks, pay gaps, and longer lifespans could generate billions in value while improving women’s financial security.

Even in traditionally female-oriented industries like beauty, personal care, and groceries, only two-thirds of women feel their needs are met. While many brands continue to prioritise marketing over substance, most women say they would pay up to 15pc more for safer, higher-quality, or more convenient options. To seize this opportunity, companies should focus on what women actually value rather than “feminising” existing products.

Nowhere are the stakes higher than in healthcare, where overlooking women’s experiences can have life-altering consequences. While women make 83pc of household healthcare decisions, only 41pc say their concerns are adequately addressed. Underdiagnosis and undertreatment, particularly related to menopause and bone, cognitive, and cardiovascular health, represent a 100 billion dollar-plus market opportunity in the United States alone.

Cardiovascular disease, the leading cause of death among women, illustrates the problem. It remains chronically underdiagnosed because screening protocols are based on male symptom profiles. Correcting those biases could expand the cardiovascular market by 74pc to 20 billion dollars by 2030.

That same dynamic is playing out in nearly every industry. When women are excluded, markets underperform their potential. When they are addressed, well-being improves, and profits rise. But that requires a fundamental shift.

Women’s lives are not linear; their health, careers, families, and identities constantly evolve, as do their goals and values. Designing with that evolution in mind is the foundation of meaningful innovation.

To achieve this, research should go beyond demographics. Companies should invest in female-specific, life-stage research that captures the full depth of women’s lived experiences. Collaborating with universities, health providers, and data scientists can help generate new insights and drive inclusive innovation.

Equally important is normalising topics once considered taboo, such as menopause, fertility, and financial independence. Addressing these issues openly could enable companies to empower women and identify new opportunities.

Ensuring that products reflect women’s actual experiences rather than assumptions requires rethinking research and development. Companies must adopt agile R&D practices like rapid prototyping, cross-functional collaboration, and real-time feedback. Likewise, involving women early in product testing can lead to stronger sales and better marketing.

Perhaps most importantly, innovation thrives when the people making decisions understand the people they serve. When women shape strategy, investment, and product design, solutions naturally become more relevant and effective. Studies have consistently shown that diversity gives organisations a clear strategic edge.

Finally, after decades of neglect, innovation and investment are beginning to catch up. Although less than four percent of US research funding goes to women’s health, startups like Midi Health and Allara Health are personalising midlife hormone care for women, and major providers have established dedicated centres focused on women’s cardiovascular and overall health.

At the same time, new investment platforms are closing gaps left by traditional financial institutions. Ellevest, for example, designs portfolios that account for gender pay gaps, longer life expectancy, and divorce, while Alinea uses AI-driven tools to help Gen Z women invest with confidence. This shift is increasingly visible in consumer goods as well. Drinkware maker Stanley, once known for rugged utility, has seen explosive growth fueled by women who turned its bottles into lifestyle icons.

The lesson is clear. By involving women in the innovation process, companies can tap into markets that have been hiding in plain sight. Serving women better is more than fair. It could unleash a wave of global economic growth.

Redefining Success Through Service and Sacrifice

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Last Saturday, I attended a women’s conference expecting to be informed and perhaps encouraged. I did not expect to be quietly transformed. The guest speaker was Tenagne Lemma, and from the moment she began speaking, the room settled into a different kind of attention.

She did not try to impress us with her impressive leadership career at local and international companies. She did not promote herself. She simply told her story, and in doing so, she reminded me what a life of purpose truly looks like.

Tenagne is almost 79 years old, though you would not guess it by the way she carries herself. There is a youthful clarity in her eyes and a calm strength in her voice. She has worked for several decades in education, development, and leadership, but she spoke of these years as a series of responsibilities rather than achievements.

She earned degrees and a master’s from what was then Haile Selassie I University, now Addis Abeba University, and later from the University of Strathclyde in Glasgow, United Kingdom. These milestones were mentioned briefly, almost modestly, as though education was never the destination but simply a tool for service.

She is the firstborn of nine children, with seven brothers and one sister. Her childhood unfolded during the Haile Selassie Empire, a time when sending girls to school, especially girls from towns, was rare and often discouraged.

Yet her father made a decision that would shape generations. He sent his firstborn, a girl, to school. As she spoke about him, it became clear that this single act of courage planted the confidence she carried throughout her life. When society expected little from her, her father expected everything.

That expectation grew into responsibility. As she began working, she did not see her income as something to spend on herself. She used it to educate her younger brothers and sister and to support her parents. She spoke honestly about sacrifice, not as something heroic, but as something necessary.

She delayed marriage and personal comfort so her siblings could have opportunities she herself had fought to earn. One detail stayed with me deeply. Just 500 Br was once enough to change the course of her siblings’ lives through education. In that contrast was a lifetime of discipline, restraint, and love.

Her siblings did not disappoint her. They completed their higher level education and went on to become influential in their respective fields. As she spoke of them, there was pride, but no sense of ownership. Her joy came not from being needed, but from seeing them thrive independently. Listening to her, I realised how rare it is to see success measured not by personal gain, but by how far others are able to go because of us.

Her story of marriage revealed another layer of her beautiful life, one shaped by the depth of love rather than convention. She spoke of her late husband as her closest friend and greatest supporter. At a time when traditional roles were firmly defined, he chose a different path.

He mostly stayed home to raise their two daughters while she pursued her career, which she described not as ambition, but as a calling. She gave him full credit for the women their daughters became, successful academically and grounded in life. There was no hesitation, no imbalance, only gratitude.

She described their life together with warmth and tenderness. They walked through life hand in hand, sharing responsibilities and joy. Even simple trips to the market were moments of companionship.

When she spoke of his passing, the room grew quiet. She shared that she chose to abandon her PhD pursuit after his death. She did not want the title without him. For her, achievement had meaning only when it was shared with the person who loved her and walked beside her.

Grief changed her life in lasting ways. She spoke honestly about how the loss of her husband affected her health and mobility. Today, she walks with a cane. Yet there was no bitterness in her voice. She spoke of grief as something that reshaped her, not something that defeated her. She also expressed gratitude that her father lived into his late nineties, strong until the end, another quiet blessing in a life filled with both loss and grace.

As I listened to her that day, something shifted inside me. Her story made me slow down. She reminded me that a meaningful life is not built on urgency, but on patience and responsibility. She showed me the importance of being willing to delay my own comfort for the sake of others, and to see success as something meant to be shared.

Her relationship with her husband showed me that love and purpose do not have to compete. They can strengthen each other. Support, I realised, is not passive encouragement, but active participation in each other’s dreams. Watching her speak about him with such respect and affection reminded me that true partnership is built on shared sacrifice and mutual belief.

What influenced me most was her humility. After a lifetime of service and leadership, she did not present herself as extraordinary. She spoke as someone who simply responded to what life placed before her. That humility made her story feel accessible. It made me believe that impact is not reserved for a select few, but is available to anyone willing to live with intention.

I left the conference quieter than when I arrived, but clearer. Tenagne did not give me a list of lessons. She gave me perspective. Her life reminded me that service accumulates, that love sustains, and that the choices we make in silence often shape the legacies we leave behind. That day, her story did not just inspire me. It recalibrated how I want to live a life of service.

The Line We Refuse to Cross

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It started as one of those typical afternoons, the kind where you’re sitting with friends, the smell of roasting coffee lingering in the air, but the conversation takes a sharp turn toward the heavy reality of living in the city today. A mutual friend had just dropped a bombshell about our neighborhood, one we always considered relatively “safe.” He told us the area had changed; it wasn’t just the usual petty theft anymore. Now, there were stories of organised groups using rented cars to snatch phones in broad daylight, and even more terrifying reports of children being kidnapped for ransom.

The atmosphere shifted instantly. Our friend described how these robbers aren’t just looking for a quick win; they’re willing to hurt, or even kill, anyone who stands in their way.

Another friend sighed, leaned back, and asked a question that felt like a punch to the gut: “Why are you even surprised?”

He argued that this is the natural byproduct of an economy in freefall. To him, the math was simple. When inflation hits triple digits in spirit, if not on paper, and people can no longer afford a basic meal, the social contract breaks. When the stomach is empty, the law becomes invisible. He insisted that this lawlessness is just what happens when a society can’t keep up with the cost of living.

I listened, and while I understood his logic, I couldn’t bring myself to accept it as a justification.

I have lived in Addis all my life to see the struggle. I see the elderly who spend their days begging outside the gates of churches or the young kids selling napkins in the middle of traffic. They are hungry, too. Their lives are just as precarious, yet they haven’t resorted to sharpening knives or planning kidnappings. This is where my friend and I hit a wall. To me, there is a massive, moral chasm between a person who steals a loaf of bread to survive and a person who is willing to take a life for a smartphone.

If I’m being brutally honest with myself, I can imagine a world where desperation drives me to do things I’m not proud of. If it came down to pure survival, would I consider “adjusting” my ethics to keep my family fed? Perhaps. But even in my darkest hypothetical, I couldn’t see myself hurting someone. I could imagine taking from a pocket, but I couldn’t imagine taking a life. There is a line where “survival” ends and “cruelty” begins, and that line is drawn in blood.

My friend’s argument is essentially one of environmental determinism, the idea that if you put people in a desperate enough situation, they will inevitably become monsters. He sees the “rented car” thieves as victims of a system that failed them. But I see them as people making a choice. In Addis today, the gap between the “haves” and the “have-nots” is widening into a canyon. You see luxury electric cars driving past people who haven’t eaten in two days. That imbalance creates a deep-seated resentment, I know. But we cannot use the economy as a universal “get out of jail free” card for violence.

There are people in this city, thousands of them, who would literally rather starve in silence than take something that isn’t theirs, let alone hurt a neighbor. By blaming everything on inflation, we are doing a disservice to the millions of poor but honest people who maintain their dignity despite the crushing weight of the economy. When we justify crime through the lens of the economy, we are essentially saying that morality is a luxury only the rich can afford. I refuse to believe that.

What worries me most isn’t just the theft; it’s the erosion of our collective spirit. Addis used to be a place where unity meant something. If someone shouted for help, people ran toward the trouble, not away from it. But as the cost of living has skyrocketed, it feels like our moral values have plummeted. We are becoming more individualistic, more fearful, and more prone to looking the other way.

However, it’s not all a downward spiral. There’s a strange paradox in our current generation. On one hand, we are seeing this rise in crime. Yet, there is a silver lining: this generation is perhaps the most courageous yet. They possess a rare intellectual honesty, a willingness to dismantle ‘facts’ that no longer ring true, even at the risk of social backlash. Unlike those who came before, they refuse to be silent or follow along like sheep just to keep the peace. we see young people who are vocal, who don’t back down from advocacy, and who are willing to demand a better future. They are more “woke” to the injustices of the world than our parents’ generation was.

The challenge we face now is how to bridge that gap. We need to find a way to cope with these difficult times without turning on each other. Instead of using the “rented car” stories as a reason to lock our doors and hearts, we should be looking at how to strengthen our communal ties. We need to be more supportive of one another so that the person on the edge of desperation finds a helping hand before they find a weapon.

Inflation might be out of our control, but how we treat each other in the face of it is not. If we let the economy dictate our morality, then we have already lost the city. We have to draw that line, the one that says hunger is a tragedy, but violence is a choice. We have to remain human, even when the world around us feels like it’s losing its humanity.

26.4

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The rate, in percentage, of the Real Effective Exchange Rate Index (REERI) year-on-year drop, signalling that nominal depreciation is outpacing domestic inflation, an unusual configuration in Ethiopia’s historically high-inflation environment. This magnitude of real depreciation in a single year is extraordinary outside balance-of-payments crises or post-peg collapses. In most emerging and low-income economies, REER adjustments of five percent to 10pc annually are considered large.

Abreham Terecha Appointed CEO of Gadaa Securities Dealer

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Abreham Terecha, a former Capital Market Project Manager at Gadaa Bank with ten years of banking experience, has been named CEO of Gadaa Securities Dealer S.C., which is set to evolve into an investment bank. The dealership, capitalised at 80 million Br, is expected to secure a trading membership with the Ethiopian Securities Exchange (ESX) next week.

Last week, the Ethiopian Capital Market Authority officially licensed Gadaa Securities Dealer S.C. as a Capital Market Service Provider (CMSP) under the Securities Dealer category. The appointment brings the total licensed CMSPs to 14, with two Securities Dealers now operating, including Ethio Fidelity. ECMA appointed four representatives and six board directors to the company.

ECMA Director General Hana Tehelku emphasised the role of securities dealers in building a liquid and trustworthy capital market, congratulating Gadaa Securities Dealer S.C. and reaffirming the authority’s commitment to supporting a strong and inclusive market that fosters sustainable economic growth.