Global Bank Board Suspends 18 as Deposit Probe Widens

Posted on July 26, 2026July 28, 2026 by Digital Editor

Global Bank’s Board of Directors have overhauled top management, after suspending several executives as an investigation into the Bank’s deposit and liquidity practices widens.

Tesfaye Boru (PhD), the Bank’s president, had delegated the Chief Corporate Banking Officer, Sahilemichael Mekonnen, to run the Bank while being abroad. However, the Board, chaired by Yoseph Getachew, later dissolved the delegation and named Sahilemichael acting President.

The shake-up followed an investigation by the National Bank of Ethiopia (NBE) into the alleged rapid withdrawal of a time deposit estimated to reach hundreds of millions of Birr, a figure that varies among insiders.

Although regulators at the NBE have taken no known action, the Board launched its own inquiry at shareholders’ initiative. Its risk and compliance and audit teams have run the review, reporting the issues to the NBE, which declined to comment.

As of last week, 18 executives, including Tesfaye and a board member, had been suspended.

Board members have declined to discuss their findings.

The dispute spilt into the open on Thursday evening, when the Board summoned 50 major shareholders to the Skylight Hotel on Africa Avenue (Bole Road). Disagreement flared over the participation of Wubshet Zegeye, chief retail banking officer and a board director, among those suspended by the Board.

According to people familiar with the meeting, it was adjourned with an agenda to replace the suspended management team. According to a senior executive of the Bank, who asked not to be named, for he is not authorised to discuss the issue publicly, the divisions should never have reached this point and that the allegations were less serious than portrayed.

“They could have handled it administratively,” he said.

The upheaval comes despite Global Bank (Ethiopia) posting a year of strong growth from its operation in the financial year 2024/25. By June 2025, its assets had expanded by 42pc to 34.43 billion Br, while deposits climbed by 41pc to 25.75 billion Br, the largest annual rise in the Bank’s history, since 2012.

Loans and advances reached 20.38 billion Br after growing by 4.67 billion Br, while profit after tax jumped by 56pc to 756.6 million Br. Interest income increased to 4.27 billion Br from 3.11 billion Br, but interest expenses grew faster, to 2.64 billion Br from 1.63 billion Br.

Global Bank’s five-year record is otherwise one of rapid expansion, with assets up from 11.63 billion Br, deposits almost tripled from 8.7 billion Br, and paid-up capital lifted from 1.39 billion Br to five billion Br, clearing the NBE’s threshold before its June 2026 deadline.

The pattern points to a governance problem, according to Tilahun Girma, a former banker at Oromia Bank and the Commercial Bank of Ethiopia (CBE). According to him, NBE’s recent scrutiny of deposit and liquidity practices exposed systemic gaps at some commercial banks.

“What we’re seeing is banks relying on short-term and high-cost time deposits as a fire extinguisher when liquidity tightens, an expensive product that masks deeper asset-liability mismatches,” he said, warning that such deposits had reached about 20pc in some cases.

Banks under pressure buy discounted funds from large depositors and senior accounts, paying spreads that erode profitability and shift repayment obligations onto the Bank.

Tilahun argued that the internal watchdogs should have caught it.

“The Asset-Liability Committee (ALCO), the risk and compliance units and the Board itself ought to have detected and curbed such practices,” he said. “Later, regulatory inquiries should judge whether the response was appropriate.”

He criticised lapses in the Board’s supervision and urged the NBE to tighten corporate governance standards.

“Boards must include independent directors with audit and banking expertise,” he said, contending that when management fails, the Board, not executives alone, should be held accountable. He cautioned, though, against treating the Central Bank as an untouchable overseer that substitutes for strong internal governance.

For now, Global Bank has swapped its leadership and opened its books to its own investigators, but the emergency meetings and personnel moves are, in Tilahun’s view, necessary yet incomplete.

“What the NBE and the Board do next, on board composition, the enforcement of ALCO and risk mandates, and the protection of depositors, will decide whether a profitable bank has caught a governance lapse early or exposed a deeper fault,” Tilahun told Fortune.

Shematera Weavers’ Chain Meets the VAT Line

Posted on July 26, 2026July 28, 2026 by Digital Editor

The footsteps, bargaining voices and rustle of cotton cloth that once filled Shematera in Mercato have faded.

The narrow passages that used to carry customers searching for handwoven fabrics feel unusually quiet, rows of locked doors standing where one of Addis Abeba’s oldest trading areas kept its daily rhythm.

For more than 15 years, Getahun Demissie arrived at his shop every Tuesday morning expecting another ordinary day. His business depended on a network that stretched far beyond his storefront, from weavers who travelled to the market after producing handwoven cloth to traders like him who bought the products and supplied customers seeking Ethiopia’s traditional fabrics.

That routine ended last month, abruptly. When Getahun, a father of three, opened his shop, officers from the Mercato No. 1 Tax Bureau branch arrived carrying a notice stamped with a single disruptive word, “closed.”

More than 10 tax officials, accompanied by law enforcement officers from the Addis Abeba Police, moved through the building, ordering traders to shut their shops and fixing closure notices to the doors.

“They told us they were doing it because they received an order from higher officials,” Getahun told Fortune. “I asked them why they were sealing our shops and what mistake we had made, but that was the explanation they gave us.”

Three weeks later, the doors remain closed.

Inside, nearly 180 shops have been shut, affecting hundreds of business owners who live by selling traditional clothing. Many still gather around their locked shops, while the customers who once crowded the area have largely vanished. A few refuse to give up, trying to sell from balconies near the sealed doors.

“We didn’t expect the closure to continue for this long,” Getahun said. “But nothing has changed.”

For him, the closure is not only a business problem but a personal crisis. He rents his residence and his shop, has four children in private school, and carries monthly expenses of nearly 60,000 Br. With his income cut off, Getahun does not know how he will meet those obligations.

“Where should I get the money to pay for my children’s school registration?” he asked. “Where should I get the money for my house rent?”

For now, his family is surviving on what it has already saved.

“But if this continues, I don’t know what will happen next,” Getahun said. “We’re just waiting quietly and watching.”

The disruption reaches well beyond individual traders. Shematera’s market depends on a chain that ties together thousands of people, from weavers to traders selling finished garments, tailors and workers who provide finishing and ironing.

About 15,000 people are estimated to depend on activity connected to the building alone. The closure has stopped the movement of goods that carries their income.

For generations, the area has been more than a cluster of shops. Set within Mercato, Africa’s largest open-air market, it has been a centre for handwoven cotton cloth since the Derg regime. Traders who once worked from open-floor stalls moved into formal shops, organised themselves and built the current five-storey building, while thousands of vendors still sell traditional fabrics in the surrounding streets.

The confrontation began with a change to the tax system. The federal government amended the income tax law and ended the turnover-based arrangement under which traders had long paid fixed amounts.

“After they amended the law, they ran to Mercato,” said Getahun. “We became the first punished by the change.”

The traders insist they are not refusing to pay. They were operating under the system the authorities themselves had provided. Many claim that they are now pushed into a new framework “without sufficient consultation” or time to adjust.

However, officials at the Addis Abeba Revenue Bureau concluded that many of these traders’ daily sales exceeded a threshold, requiring them to issue receipts. They also estimated daily revenue at more than 7,000 Br and judged that many were earning above two million Birr a year, compelling them to join the VAT system.

Business owners there rejected the assessment, arguing that it ignores a business whose margins are shaped by buying costs, payments to suppliers, labour and other operating expenses. However, the underlying objection is that a receipt-based system does not fit how their supply chain works.

Many businesses in Shematera buy fabrics directly from weavers who produce them outside the formal receipt system, then finish them before selling. They wonder how they can “suddenly operate.” issuing receipts when their suppliers do not issue them receipts.

Tsegaye Wana, who has worked in Shematera for nearly 30 years and is the sole provider for his three children, built his whole model around a chain that has existed for decades.

“I bought everything without a receipt,” he told Fortune. “I never received a receipt from the weavers. Now they are asking me to sell with receipts. How is that possible?”

Tsegaye argued that the dispute could have been settled through discussion, and that traders repeatedly raised their concerns, moving between the woreda tax office and the Mayor’s Office.

“We discussed the issue and were waiting for a solution,” he said. “In the meantime, they came and sealed our shops. This is unjust.”

For businesspeople like Tsegaye, the cost runs past lost income.

“This kills my family’s morale. It makes us feel like we could become homeless,” he told Fortune.

The workers who serve the market but own no shops have been hit as hard. Yohannes Workineh, a father of four, has spent more than two decades providing ironing, embroidery and tailoring for Shematera’s shop owners.

The closure cut his income at a stroke. Two weeks had passed without earnings.

“My family and I are living in constant fear,” he told Fortune.

“I can’t continue like this. If the shop remains closed, I’ll have to carry loads to put food on the table for my family,” he said.

When traders cannot sell, weavers lose buyers, tailors customers and transporters businesses. The closure of one building has drained a whole network.

Officials at the Addis Abeba Revenue Bureau reject the claim that traders were unfairly singled out. According to Biniyam Mikru, who heads the Bureau, the Bureau gave merchants “enough time” to comply before enforcing the law.

“We waited for them for more than six months to come into this system,” Biniam told Fortune. “But, they didn’t come. The law should be enforced. That is what we did.”

Biniam argued that Shematera was identified because many of its shops trade at revenue that requires receipts and VAT registration. A single traditional cloth can sell for more than 10,000 Br. A trader selling even one a day would pass the two million Birr threshold.

He also dismissed the argument that buying without receipts makes compliance impossible, saying traders can document expenses by other means. According to him, his Bureau did not demand VAT without sales, but asked traders to report their actual transactions.

“We didn’t calculate their VAT based on our daily income assessment,” he said. “We only asked them to report their sales and pay VAT accordingly. We asked them to have receipts. We sealed their shops after explaining the remedies. Once they come into the system, we’ll open their shops.”

The Mayor, Adanech Abiebie, administers a geographically compact but commercially dense economy with a high concentration of taxpayers, businesses, property transactions, and consumption.

According to a macroeconomic survey conducted three years ago, Addis Abeba produced goods and services valued at more than two trillion Birr. Although the figure predates the latest budget cycle, it offers the most recent official-style measure available of the capital’s economic size.

Its budget for the concluded fiscal year was 350.13 billion Br. Although five times lower than the federal government’s budget, it demonstrates a substantial spending capacity and an unusually high degree of financial self-reliance. But there is a gap of nearly eight billion Birr between its revenue collection target and its actual revenue, putting pressure on officials like Biniam to mobilise more.

A high revenue target has intensified pressure on businesses and property owners.

Not everyone views the Bureau’s approach as the problem. Dawit Kejela, a tax expert and former Revenue Office official, believes the Bureau largely followed proper legal procedure, since any business whose annual sales cross the VAT threshold is required to register.

“Consumers ultimately pay VAT,” he said. Businesses collect it on behalf of the government and remit it to the tax authority. It should not be viewed as a tax burden on the trader.”

He rejected the idea that missing supplier receipts make compliance impossible, noting that hotels, service providers and manufacturers often buy without standard receipts yet still issue them when they sell.

“Shematera is not fundamentally different,” he said.

Even so, Dawit sees room for cooperation. Though he considered the assessment method broadly reasonable because it rests on sales rather than profits, he argued that both sides would gain from agreeing on how it is applied.

According to him, where weavers cannot provide formal receipts, traders could prepare purchase vouchers and have suppliers sign them, gradually drawing more of the supply chain into the formal system.

“It would eventually benefit the entire sector,” he said.

The confrontation comes as the federal government pursues one of its most ambitious domestic revenue drives in years. Prime Minister Abiy Ahmed’s Administration has put fresh weight on lifting tax revenue and widening the base, backed by international lenders, among them the International Monetary Fund (IMF), which has pressed Ethiopia to enhance tax mobilisation and rely less on domestic borrowing.

The harder enforcement has bred frustration, with many taxpayers arguing that officials keep squeezing businesses and salaried workers already in the formal economy, while a far larger informal sector remains untaxed.

Businesspeople like Dawit Geze see it differently, framing the fight not as a refusal to pay but as a denial of the chance to resolve the disagreement through administrative channels.

“We don’t owe the government even a single Birr in unpaid taxes,” he said.

“We’ve always paid the fixed tax the government required from us.”

The shops were sealed while their owners were still waiting for a solution.

“They tell us to pay, but how can we pay when our shops are closed, and we can’t work?” wondered Dawit. “They didn’t treat us like taxpayers. They treated us like people operating outside the law. We’ve also lost our right to ask questions and seek accountability.”

This captures a dilemma facing any government trying to raise revenue without wrecking livelihoods built over decades.

For the Bureau, the campaign is doing what reform is meant to do. Addis Abeba has expanded its collection sharply, mobilising 351 billion Br this fiscal year, close to 70pc of it from taxes, almost a sixfold increase on the city’s revenue six years ago. Its target for the coming year is more ambitious still, 502 billion Br, about 43pc above the previous plan.

“Our tax collection capacity has increased,” Biniyam said.

The Bureau is chasing businesses that should be registered for VAT and employers who fail to remit employment income tax.

Business owners in Shematera are preparing to contest the decision in court, setting up one of the capital’s most closely watched disputes over tax enforcement.

Cost Recovery by Public Institutions Becomes a Hidden Tax

Posted on July 26, 2026July 29, 2026 by Digital Editor

Ideally, citizens who have paid income tax all year should not have to reach for their wallet again at a public office counter. Yet, in Ethiopia, that appears to have become a routine.

To obtain a birth certificate, register land, renew a business permit or collect a court document, the taxpayer pays a second time, now as a user of the very services income taxes were meant to fund. The state, pressed for money to fill a budget deficit and unable to borrow from the Central Bank, is turning to fees, levies and charges to finance its operations at a time when households and firms are contending with rising costs and falling purchasing power.

It is stating the obvious to say taxation is a pillar of any public finance. However, the steady drift toward charging citizens twice for the same thing is something else. It deserves to be named for what it is.

Understandably, the pressure behind the drift is real. Ethiopia’s tax-revenue-to-GDP ratio fell to 7.1pc in the 2023/24 fiscal year, from 7.9pc a year earlier and 8.8pc in 2021/22. It remains one of the lowest in Africa.

For decades, policymakers and tax authorities have been trying to lift it through amended value-added, excise, and income tax laws, digital administration, and stronger enforcement. At some point, during the reign of Melaku Fenta at the helm of the federal tax agency, the ratio picked as high as 13pc.

That ambition is sound, for a state cannot build roads, staff health facilities or pay teachers on a narrow tax base. Domestic revenue mobilisation is the durable answer to a shrinking pool of concessional finance.

The question is not whether the federal government or regional states should collect more, but how, and from whom, and whether the manner of collection quietly corrodes the consent it depends on. For now, the method appears to be doing exactly that.

Businesses and households face higher formal taxes at the same time as rising charges for licences, documentation and public services. Where fees climb faster than the quality of what they buy, taxpayers reasonably read them as duplicate taxation rather than payment for an identifiable benefit.

The design of the base makes matters worse. Transaction-based taxes account for 71.3pc of planned federal collection. Customs duties alone are expected to yield about 785.9 billion Br, 52.7pc of total planned tax revenue. A budget that leans so heavily on trade and transactions is exposed to every shock that affects trade and transactions. The oil price is the immediate example.

Dearer imports may lift the nominal customs value of goods, but they also cut import volumes, compress company margins and weaken the wider taxable activity beneath. Revenue built on that footing is neither stable nor fair.

The deeper problem is what the fee habit does to the character of the state. Public services are not optional purchases. A person cannot obtain a national identity card, a land registration, or regulatory approval elsewhere because the state holds a monopoly over them.

When individuals are compelled to pay whatever tariff is set to obtain something the law obliges them to have, pricing starts to resemble coercion rather than exchange, and the market logic used to defend it collapses. The defence is flimsy still because the charges are so often untethered from cost.

Policymakers try to justify increases on grounds of cost recovery, yet rarely publish the method by which the cost is reckoned.

Citizens are left unable to tell whether a fee reflects a genuine administrative expense or the broader budget hole of the office collecting it. Without that transparency, service charges become a convenient way to raise money outside the ordinary discipline of legislated taxation. Such a convenience rewards the wrong behaviour.

In the public sector, where duplication and weak cost control already dog service delivery, raising fees shifts the cost of inefficiency onto taxpayers. Rather than pressing public institutions to reform, it shields them, financing their shortcomings through the counter instead of through better management.

The same distortion runs through the wider tax mix. Excise duties on tobacco and bottled drinks are meant to raise revenue and shape consumption. But in markets where domestic production is limited and enforcement uneven, setting them too high pushes buyers toward illicit channels and smuggling. Legitimate firms then compete against contraband, and the treasury collects less than it hoped while the informal economy grows. Punitive rates can defeat their own purpose.

Stacking a property tax on top invites avoidance rather than compliance. Herein lies the central fault. Each new charge may look reasonable on its own, yet nobody seems to weigh their combined weight. Taken together, they build a system in which a citizen encounters a tax or fee at almost every point of contact with the state, and frustration, not revenue, becomes the surest yield.

To be sure, fees have a proper place. Cost recovery for a specific and identifiable service is legitimate, and a well-designed user charge can ration a scarce public resource and curb waste.

The federal government’s fiscal position is genuinely tight. No one should pretend the money can be found without effort or discomfort. The objection would not be to charging at all. It is to charging opaquely, cumulatively and in place of the reform that would make the charges unnecessary.

The philosophical inheritance is unambiguous on the point. Taxation is the contribution citizens make in return for security, order and public goods. The premise beneath all of them is that citizens surrender part of their income so that essential services can be provided collectively and fairly.

However, substantial fees layered on top for services no one can refuse begin to pull that bargain apart. Administrative law points the same way. A law draws its legitimacy not from its mere existence but from how it is made and applied. Fee structures set without evidence, transparent calculation or regard for affordability fail that test.

The remedy is not complicated, though it takes resolve. Charges should reflect the real cost of delivery, not the budget gap of the office levying them. The calculations should be published and open to public review. Affordability should be weighed alongside administrative expense in a country where so many live close to the edge.

Those in charge of public agencies should be held to account for their inefficiencies rather than permitted to invoice the public for them. And revenue should be raised through clearly legislated taxes debated in the open, not through the quiet accretion of administrative fees that hides the true state of the public finances.

Taxes, in whatever shape or form they come, should be predictable, equitable and proportionate to the ability to pay.

Citizens pay willingly when they believe institutions are fair, deliver value and manage public money responsibly. They withdraw into the informal economy when the state looks more intent on extraction than on service.

Policymakers and their political bosses can lift one of Africa’s lowest tax ratios and maintain the consent of those they tax, but only if transparency, accountability and affordability sit at the centre of the effort. Governance should serve the public interest. It should not invoice the public for the consequences of its own failings.

Hulu Sport Wins in Court, But Stays Closed

Posted on July 26, 2026July 28, 2026 by Digital Editor

Judges at the Federal High Court have overturned the National Lottery Administration’s decision to suspend Hulu Sport, one of the country’s leading sports betting operators, finding the regulator’s action legally flawed.

Yet the company’s return to business remains on hold, after the Administration has appealed and secured a temporary stay of execution. A firm that won its case in Court still cannot reopen its doors, and the gap between the two outcomes is where the dispute now sits.

Hulu Sport was among the operators whose licences were suspended last December. It took its fight to the Administrative Bench of the Federal High Court, on Chad St., accusing the National Lottery Administration and the Ministry of Revenues of administrative injustice, imposed without due process.

Owned by a technology firm, Hulegeb Online Solution Plc, the company entered the market in 2017.

A three-judge panel of Yesuf Mohammed, Kedir Endris and Zenebe Gebrehiwot unanimously ruled in its favour. The company’s executives promptly told their customers of their preparation to resume business.

Last December, the Lottery Administration revoked the licences of 22 sports betting companies, alleging the operators had deprived the government of more than 100 billion Br in public revenue. Hulu was one of them.

Aggrieved, its managers petitioned the Administrative Bench, arguing through their attorney, Thomas Hailemichael, that the decision lacked legal grounds and unlawfully infringed the rights of thousands of employees and shareholders. They contested that the regulator had failed to follow the legal procedures required before a revocation.

The grievance widened to draw in the Ministry of Revenues. Although oversight of betting licences ultimately rests with the Ministry, Hulu Sport said that when it asked the Ministry to review what it called “an unlawful decision,” the Ministry declined, stating that it had delegated its authority to the National Lottery.

The Ministry was consequently joined as a co-defendant. By failing to discharge their statutory duties and acting beyond their powers, the company argued, both agencies had caused it substantial harm, leaving them jointly and severally liable.

Hulu Sport’s lawyer argued that the authorities had imposed punitive administrative measures without any judicial finding of criminal liability, in effect treating suspicion as proof of guilt.

The company argued that its “rights against punishment without a judicial determination have been denied.”

“Being merely a suspect under criminal investigation does not constitute guilt,” said the petition, “revocation does not constitute guilt.”

The defendants maintained that several operators, Hulu among them, were under investigation for alleged money laundering, but the company countered that criminal liability can be established only by a court, not presumed through an administrative order.

The procedural complaints ran deeper still. The Plaintiff’s lawyer claimed that the regulator had denied his client due process by revoking its licence without first giving it the right to be heard, when it should have been formally notified of the allegations and allowed to present a defence before any sanction. He also questioned the legal basis of the regulator’s move, arguing that investigating alleged tax evasion falls to law-enforcement agencies, prosecutors and the courts rather than the National Lottery Administration.

The lawyer alleged that the Administration had never specified the factual and legal grounds for the revocation, ordering the closure of betting operations without naming the violations attributed to the company or explaining the legal basis for the decision.

The company also framed the shutdown as self-defeating for the state, arguing that closing its operations not only caused heavy losses but cut off a source of tax revenue, harming the government’s own fiscal interests.

“Before revoking our licence, they should have monitored our bank accounts and assigned auditors to strictly supervise us while allowing us to continue working,” the Plaintiff argued.

The company’s lawyer challenged the Ministry’s claim that delegating power does not relinquish a public agency’s duty to supervise the authority exercising it, claiming it is liable for its alleged failure to review or intervene after the suspension.

Hulu Sport appealed to judges to declare the revocation unlawful and set it aside, restore its operating licence, and direct all institutions to recognise the invalidation of the directive and facilitate an immediate resumption of business.

The state institutions held their ground. The National Lottery Administration defended the revocation as a measure taken in the public interest to safeguard government revenue and protect the national economy. Its lawyers insisted that the Administration had acted within the powers delegated to it by the Ministry of Revenues and that the law expressly authorised it to regulate operators, including suspending or revoking licences where warranted.

The Ministry of Revenues backed this position, arguing that no legal error had been committed, that the National Lottery Administration had acted within its delegated authority. Its lawyers alleged that Hulu Sport was among the companies suspected of concealing “billions of Birr in public revenue,” conduct they claimed had harmed both public finances and the wider economy.

The panel of judges was unpersuaded. It found that the defendants had failed to address Hulu Sport’s grievance through the procedures prescribed under administrative law and had denied the company its right to be heard before imposing the revocation. Judges set the decision aside, removing the legal basis on which the regulator had suspended the company’s operations.

After a nearly seven-month battle, the company appeared to clear the way for a reopening. Buoyed, Hulu Sport told its customers it was preparing to restart.

The relief proved brief. On Tuesday last week, the company disclosed that its reopening had been put on hold after the National Lottery Administration lodged a fresh appeal and secured a 15-day stay of execution, freezing enforcement of the judgment pending further review.

The dispute now moves up to the Court of Cassation, which will decide whether the Administrative Bench’s ruling should stand, leaving the planned reopening in limbo.

Federal Regulation Grants Receipt for Farmers, a New Product for the Banks

Posted on July 26, 2026July 28, 2026 by Digital Editor

A newly enacted regulation by the Council of Ministers lets eligible producers pledge certified warehouse receipts as collateral for short-term loans covering up to 70pc of the appraised value of their stored produce.

It takes aim at a seasonal cash squeeze that forces many growers to sell cheaply at harvest, at the moment they need money for fertiliser and the next planting season.

The problem it targets has long defined the farming year. Where agriculture depends heavily on rain-fed production, harvests arrive in a short window and send a flood of grain to market, with reports showing that more than half of farmers depend on the rain-fed season. The resulting oversupply drives prices down as farmers need cash for inputs, leaving many little choice but to sell cheaply or watch their produce rot.

The new regulation offers an alternative, letting a farmer store the crop, borrow against it and sell later when prices recover.

To run it, the regulation sets up a multi-agency Warehouse Receipt System Board, chaired by the State Minister for Trade & Regional Integration, in charge of trade relations and export promotion, Tazer Gebregziabher.

The Board brings together officials from the Ministry of Trade & Regional Integration (MoTRI), the National Bank of Ethiopia (NBE), the Ethiopian Agricultural Authority (EAA) and the Ethiopian Cooperatives Commission (ECC), with a mandate to remove the barriers that have kept formal credit beyond the reach of much of the countryside.

The primary law had existed for years but sat idle, according to Fikadu Tilahun, a technical adviser at MoTRI, because no one had been assigned to look into it.

“Even if the proclamation was issued in past years, implementation was tough, as there was no clear distinction between who did what,” he told Fortune. “The regulation was prepared to make it easily applicable.”

However, the financing gap it confronts is wide. Agriculture has stayed severely underfunded by the commercial banks. Although an NBE directive requires them to channel at least five percent of their annual lending into the sector, private banks have put in between one percent and three percent.

The agricultural sector has drawn less than 10pc of total bank credit of 1.7 trillion Br in recent years, according to the NBE’s national agricultural financing roadmap, a striking shortfall for an industry that drives national output.

Under the new regulation, growers present certified warehouse receipts to participating banks and secure short-term loans of up to 70pc of the appraised value of their stored crop, at preferential rates. The operator authorised would appraise the grain and document its quantity and price at deposit. Access is limited to individual smallholders, cooperative unions and agro-processors.

To curb speculative hoarding and protect export earnings, the regulation bars export commodities and confines eligible collateral to five staples, including teff, maise, wheat and malt barley. Produce may remain under a receipt for no more than six months.

Soybeans, also included in the produce, are the least grown, farmed by up to one million producers, while wheat is grown by about four million farmers. Maise is the most widely cultivated, with up to eight million households, and teff, the national crop, by up to seven million.

Warehouse operators face a real barrier to entry, having to hold a minimum working capital of one million Birr, and obtain annual competence certificates from the Trade Ministry. They have to post a bank or insurance performance bond covering 10pc of the value of stored inventory, and carry comprehensive insurance against fire, natural disasters, theft, or employee negligence.

The Ethiopia Commodity Exchange (ECX) is the system’s operational backbone, running 60 warehouses through 25 branches and deploying 18 facilities for warehouse-receipt services in the past fiscal year, having leased unused space once reserved for coffee. Its service charge is set at 0.2pc, with minimum interest rate. According to Bezuayehu Berihun, warehouse finance receipt manager at the ECX, the clearer framework is an opportunity to reset a system long dogged by implementation trouble.

“Getting loans from banks was tough,” he said. “I hope things will now change and access to loans will become easier for our farmers.”

The early numbers show a modest start. In the past budget year, federal trade officials planned to bring 26 warehouses into the system but operationalised 34, and independent operators reached five.

Depositors placed 456,392Qtls of maise, soybeans, wheat and malt barley. The ECX issued 162 receipts, facilitating 1.8 billion Br in bank loans and generating 7.6 million Br in service revenue. Even so, the rollout is in its early stages.

“We’re trying to publicise the law,” Bizayehu said, noting that the state-owned Commercial Bank of Ethiopia (CBE) remains the dominant lender. However, private institutions, among them Dashen Bank, Abay Bank, Amhara Bank and Cooperative Bank of Oromia, have begun to take part. “But implementation has not reached the ground yet.”

Bankers have welcomed the clarity. Demissew Kassa, secretary-general of the Ethiopian Bankers Association, sees the mechanism as an opening for portfolio diversification.

“It’s like a new product for the banks, something that benefits the farmer and the trader,” he told Fortune. “Since banks issue short-term loans in the process, it’ll benefit them as well while enabling them to meet the Central Bank’s portfolio allocation requirement.”

Larger cooperatives are less persuaded, however.

Mesfin Eshete is the manager of the flour plant run by the Lume Adama Farmers’ Cooperative Union, an umbrella of 125 primary cooperatives representing more than 70,000 farmers. His Union is weighing the terms but finds the cost structure unviable and does not view it as a long-term solution.

“The banks’ interest rates and warehouse handling fees are too costly to be encouraging,” he told Fortune, questioning how the scheme would sit with the trade credit common in wholesale distribution. “For instance, some buyers purchase on credit. If we want to extend credit to a buyer, the bank won’t approve it. How is that supposed to work? While the system might help short-term liquidity.’

The structural case is made by Michael Tomas Gebremariam, an in-country researcher at Euromonitor International and a former development finance consultant at Delphos, who estimates the agricultural financing gap at 98pc of the sector’s total demand.

“The regulation formalises operations for agricultural products to serve as direct financial assets,” he said. “Farming is a cash-intensive business, and farmers struggle to collect cash in time for input purchases. This mechanism improves liquidity, loan eligibility and seasonal productivity.”

He believes that by reserving the largest share of credit for smallholders and cooperatives, the rule guards primary producers from being crowded out by large buyers, and by quantifying output value it sets loan caps that let banks expand safely.

Michael was clear about the limitations, citing weak digital infrastructure, a shortage of certified quality inspectors, deep reliance on informal social-financing networks and weak capacity in an insurance industry built around trade-transit rather than stored-crop risk.

Trucks Impounding Puts Fuel Carriers, Regulators at Legal Odds

Posted on July 26, 2026July 26, 2026 by Digital Editor

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Ethio telecom Grows, But the Towers Lag

Posted on July 26, 2026July 26, 2026 by Digital Editor

ASKY Airlines Bets Expansion on a Hub Near Full

Posted on July 26, 2026July 28, 2026 by Digital Editor

ASKY Airlines has tied the next phase of its growth to the modernisation of Lomé International Airport, the carrier’s hub in Togo, where passenger use already runs near 80pc of annual capacity.

A privately-owned pan-African carrier, ASKY grew out of a regional effort to restore air links across West and Central Africa after the collapse of Air Afrique.

Ethiopian Airlines was brought in as ASKY’s technical and strategic operating partner. Its role has extended beyond investment to fleet development, network planning and Airline operations, making it the most important partner in ASKY’s business model. Ethiopian Airlines has held a major equity, with share at about 22pc.

The Airline handled 1.58 million passengers through the Gnassingbé Eyadéma International Airport in 2025, against a ceiling of about two million a year, effectively reaching its limit as it prepares to double its fleet and push into Europe.

The government is pursuing a three-fold expansion of the airport, and ASKY is working with airport authorities and Togo’s government to meet the upgraded facilities with its operational needs. According to Daté D. Tevi-Bénissan, ASKY’s commercial director, the apron expansion was completed in June last year, with six additional parking spots planned and three already delivered to support a growing fleet.

A passenger terminal expansion is underway on one side to ease congestion, and baggage systems are being upgraded with new belts and X-ray equipment to cut transit delays. A DoubleTree by Hilton transit hotel is being built to smooth passenger flows.

Together with the Port of Lomé and the Adétikopé Industrial Platform, it forms a corridor meant to support regional connectivity and the densification of ASKY’s network, and to hold Lomé’s place among the leading aviation hubs in West and Central Africa.

“Planning for a second terminal at Lomé should begin immediately to prevent bottlenecks as ASKY doubles its fleet,” said Hailegebrel Tadese, an African aviation commercial strategy expert and former Ethiopian Airlines country director based in Switzerland, calling the current three-fold expansion “a timely but only medium-term fix.”

According to him, infrastructure should anticipate demand rather than react to it, a lesson that reaches beyond Lomé.

Many of Africa’s major airports were designed decades ago for far smaller fleets and passenger numbers, and much of the continent’s capacity is now near its practical limit, which explains the wave of terminal extensions, new runways and greenfield airports under way across the region.

The investments, according to Tevi-Bénissan, should improve operational performance, accommodate future fleet growth and sharpen the passenger journey, with the full benefit felt progressively as the terminal work and the remaining parking stands are completed.

Yet he was candid that the upgrades may not keep pace with what is coming.

“Without faster investment in a possible second terminal,” he cautioned, “congestion could cap the Airline’s intercontinental hub ambitions within the next decade.”

The warning frames the strategy the Board approved in July, a five-year plan built on growth, operational excellence, customer experience, fleet modernisation and network expansion.

ASKY intends to phase out its Boeing 737-800s in favour of 737 MAX jets, grow the fleet from 15 to 30 aircraft, launch flights to Paris in late 2027 and upgrade to the Boeing 787-9 by late 2028.

Two new Boeing 737 MAX 8 aircraft arrived this month, the first, registered ET-BCJ, landing in Lomé on July 5, followed by ET-BCK on July 16, each in a dual-class layout of 16 business and 144 economy seats. Alongside the fleet, ASKY is putting up a 100-million-dollar joint-venture maintenance, repair and overhaul (MRO) facility in Lomé with Ethiopian Airlines, and a CAE-powered flight simulator centre is under construction, anchoring the technical base a larger fleet will require.

ASKY is targeting two new destinations a year, with a maximum of three, and has moved several routes to daily service, including Libreville, Brazzaville, Bangui, and Yaoundé. Nairobi and Malabo have gone to four flights a week, Douala to nine, and new point-to-point links have opened, including non-stop services from Yaoundé to Bangui and from Malabo to Douala.

Kano, in Nigeria, is among the destinations planned. The investments, Tevi-Bénissan foresees, will lift capacity, improve schedule reliability and support new routes while strengthening connectivity.

According to Hailegabrel, the planned Paris service and the arrival of the 787-9 will lift passenger volumes and processing demands sharply, and if the existing terminal is not ready, it could become a chokepoint before the fleet expansion is complete.

However, the ambitions run into a financial wall familiar across the continent in trapped cash.

The International Air Transport Association (IATA) reported that 1.2 billion dollars in airline funds were blocked globally in 2025, of which nearly 80pc was stuck in African markets, held back by foreign-exchange rules and a shortage of hard currency.

ASKY is occasionally caught by such restrictions on repatriating revenue, in markets such as Gabon and Angola. Tevi-Bénissan declined to disclose country-by-country figures but confirmed the sums remain “significant in some markets” and are being actively managed, with the carrier in dialogue with authorities, central banks and its bank partners.

Hailegebrel called resolving the blocked funds an “economic development imperative”, warning that when revenues cannot be repatriated, airlines turn cautious about adding capacity or opening routes, and end up limiting seats and raising fares.

He put the same 954 million dollars at the centre of the problem. The pressure compounds an already stretched cost base, with African carriers facing fuel-related unit costs about 63pc above the global average. Nigeria’s Dangote refinery, from which ASKY sources fuel regionally, offers a chance to shorten supply chains, but Hailegebrel cautioned that lasting price relief depends on liberalising fuel markets and improving airport infrastructure.

Policy reform is moving on a parallel track. The Economic Community of West African States (ECOWAS), a bloc of 15 countries, has reported that aviation taxes and charges can account for 60pc to 65pc of ticket costs in the region. It has mandated a 25pc reduction or removal of various levies from January 1, 2026.

Twelve member states have begun implementation, with Sierra Leone already scrapping a 50-dollar airport security charge. Hailegebrel reads the mandate as the formal launch of a reform process rather than a hard deadline, its success hanging on sustained political will and regulatory coordination across members.

The bigger vision was set out by ASKY’s Chief Executive Officer, Esayas Woldemariam, at the African Airlines Association gathering this month online.

“Aviation for Africa is not a luxury but a silver bullet solution for economic integration,” he said.

Esayas believes that for the Single African Air Transport Market (SAATM) to work, carriers should move toward deeper cooperation and alliances to overcome market fragmentation.

Aviation consultant and writer Yonatan Menkir, said the airport is approaching capacity and will probably need a second terminal within a decade.

Recent apron expansion, baggage system upgrades and additional passenger facilities have improved turnaround times, Yonatan said. These upgrades can support the immediate increase in operations, although the airport is already operating at roughly 80pc of its annual capacity of two million passengers.

Yonatan said proposed long-haul services could accelerate passenger throughput. These include a potential Paris route using Boeing 787 aircraft.

Beyond airport capacity, Yonatan pointed to airline revenues trapped in markets such as Gabon and Angola. He urged sustained engagement with central banks and governments, matching local revenues with local costs and diversifying market exposure.

He also recommended active treasury measures, including phased repatriation or temporary reinvestment. Collective pressure through the AFRAA and IATA could help unlock blocked funds, he said.

Yonatan described the ECOWAS’s January 2026 tax-reduction mandate as a useful target that will need to be implemented in phases.

Banks Push the Birr Past 160 as the Central Bank Sits Out

Posted on July 26, 2026July 29, 2026 by Digital Editor

Commercial banks pushed the Birr (the Brewed Buck) to a fresh low against the dollar last week. The industry’s average buying rate crossed 160 Br for the first time, and the Central Bank, which is meant to anchor the market, did not step in to intervene once.

The average bid across the 28 commercial banks jumped from 159.95 Br on Monday to 160.06 Br on Saturday. The average offer moved from 163.15 Br to 163.26 Br. Over the week, this was a shift of 0.07pc, small enough to read as stability.

However, the direction was not. Across the five daily transitions, banks made 66 upward revisions to their buying rates and one downward. That is not two-way trading but a queue.

The National Bank of Ethiopia (NBE) has not held a foreign exchange auction for several weeks. However, it has announced four for August and September 2026, together offering half a billion dollars, demonstrating its firepower to defend the Brewed Buck. Until these clear, the daily postings are the market’s only price signal, produced less by transactions than by banks watching one another.

The Bank of Abyssinia’s crossing of the 160 Br line was the week’s clearest marker. It opened at 159.55 Br and closed at 160.09 Br, a gain of 0.53 Br, 0.33pc. It was the second largest weekly move in the forex market and the largest among the five big private lenders.

The crossing came on Thursday, July 23, when the Bank went from 159.96 Br to 160.01 Br, adding 0.08 Br in two steps after that.

Zemen Bank, the only other member of the big five in the market’s upper tier, ended at 161.13 Br after rising 0.25 Br. Dashen Bank added 0.28 Br to reach 159.58 Br. Awash Bank added 0.24 Br to reach 159.61 Br, while Wegagen Bank posted 159.8 Br on Monday and 159.8 Br on Saturday, and every figure in between matched to the fourth decimal place.

The bigger change was beyond the big-five.

Oromia Bank, the market’s price leader for months, has been overtaken. Abay Bank opened the week at 162.57 Br against Oromia Bank’s 162.73 Br and closed at 162.89 Br, 0.16 Br clear of a rival that did not move its rate once in six days. The crossover came on Thursday and has widened daily since.

Abay also held the highest offer in the market at 166.15 Br, ahead of Oromia Bank at 165.99 Br and Bunna Bank at 165.96 Br. Bunna, third in the premium tier, gained 0.31 Br to 162.7 Br, tracking Abay rather than Oromia Bank.

Tsehay Bank bid 158.49 Br and offered 161.66 Br on each of the six days, the lowest on both sides of the commercial market. The state-owned Commercial Bank of Ethiopia (CBE), which held the largest share of the country’s deposits and remittance flows, was frozen at 158.83 Br buying and 162 Br selling from Monday.

Between Tsehay Bank’s bid and Abay Bank’s, 4.40 Br separates the cheapest and dearest dollar in one market on one day. That dispersion of 2.8pc widened over the week from 4.24 Br.

Two years into a forex regime meant to unify exchange rates, the gap between banks is wider than it has been for most of the month. That CBE and Tsehay Bank held a bid more than a Birr below the market average without losing flow says something about how foreign exchange is actually bought.

Posted rates are not the full price. CBE, like several competitors, offers a top-up bonus on every dollar it buys, paid outside the published rate and hence invisible in the forex boards. The published number appears more of a compliance artefact, with the effective number negotiated.

A premium tier of five – Abay, Oromia, Bunna, Zemen and Hibret banks – bid between 0.78pc and 1.93pc above the Central Bank’s indicative rate and accounted for almost all the market’s dispersion. A shadowing cluster of seven – Amhara, Berhan, Enat, Gadaa, Goh Betoch, Siket and Wegagen – sat within five cents of the Central Bank’s 159.81 Br, close enough that its figure was the input to their pricing, not the output.

A third group grinds, revising daily in steps of half a cent to five cents, among them Awash, Dashen, Coop, Siinqee, Enat and Abyssinia banks. A passive block of nine (Amhara, CBE, Global, Goh Betoch, Hijra, Nib, Oromia, Tsehay and Wegagen) did not change a decimal place last week.

Abay Bank’s week reads 162.57, 162.67, 162.68, 162.78, 162.79 and 162.89, an alternating ladder of exactly 10 cents and exactly one cent, repeated three times. Siinqee Bank moved its bid by exactly 0.0005 Br on each of three consecutive days, then jumped 0.16 Br on Saturday.

The state policy bank, the Development Bank of Ethiopia (DBE), repriced once, to 159.9 Br on Tuesday, and has not moved since.

The one real outlier was Anbessa Bank, which cut its bid from 160.8 Br to 159.7 Br on Friday, a fall of 0.69pc. It was the only downward revision anywhere in the market across the six days.

Anbessa Bank had been in the premium tier every day since Monday and abruptly rejoined the pack, giving up a position held while paying up for dollars. Whether that reflected a repricing after losses on the bid, a correction of a bad posting, or a change in funding was not clear.

The Central Bank’s own line was unsteady to a lesser extent. Its indicative rate ran 159.59 Br on Monday and 159.99 Br on Tuesday, close enough to a round 160 to raise the question of whether it was calculated or chosen. It fell back to 159.79 Br on Wednesday and settled at 159.81 Br on Friday and Saturday.

That final figure sat 1.32 Br above Tsehay Bank’s floor and 0.18 Br below its own Tuesday print. It stood still while 14 commercial banks were still revising on Saturday.

Last week established a market drifting weaker at a controlled pace, priced by imitation in the absence of an auction, and split into tiers whose gaps were widening rather than closing. The August and September sales will likely test whether the volumes announced are large enough to pull the premium tier.

Chasing Excellence in the Summer, Raising Questions Over Who It Leaves Behind

Posted on July 26, 2026July 29, 2026 by Digital Editor

For as long as her daughter had been in school, the summer break belonged to the family. Every year, the mother, who lives in Addis Abeba’s Lemi Kura District and asked for anonymity for her and her daughter’s identities for fear of reprisal, packed the holiday with visits to extended relatives.

This year, for the first time, the ritual collapsed. Her daughter, now in Grade 12 at a private school, was told to report for summer tutorials, and the condition left no room to argue.

“The School gave us no choice,” the mother said. “They made it mandatory that if my daughter didn’t attend the summer programme, she would not be allowed to register for the upcoming semester.”

The lessons carried extra fees for the weekend sessions, and her unease has grown with the bill. The mother’s frustration is a small window onto a large intervention.

The Addis Abeba City Administration Education Bureau has launched a summer tutorial programme across designated cluster centres, deploying 1,800 selected teachers to support more than 51,520 Grade 11 and 12 students preparing for the Ethiopian University Entrance Examination. According to Abebe Chernet, the Bureau’s communication director, the programme offers a condensed curriculum designed to sharpen readiness and improve educational quality before the Grade 12 national examinations.

The numbers behind the drive explain its urgency.

The Bureau’s officials traced poor outcomes to curriculum-alignment gaps, weak instruction, distraction due to social media and poor communications between parents and schools. They proposed structured study forums and closer parental engagement.

A document produced by the Bureau, dubbed “Excellence Strategy”, responds to years of weak results for high school graduates. Its authors aspire to double the share of students scoring 50pc and above to 60pc.

The strategy puts its faith in three pillars.

The first gathers the top 30 Grade 11 and 12 students from neighbouring public and private schools into specialised cluster centres, supported by monthly parent contributions of 500 Br.

The second offers school-based tutorials for average performers. The last builds an advisor-advisee system, pairing strong teachers with groups of Grade 12 students at a ratio of one teacher to four to seven students. Selected Grade 12 students are made to mentor Grade 11 peers in smaller groups.

Public education is justified on the premise that “every child” should gain the knowledge to participate in society, regardless of family means. It is anchored in the Constitution, which requires the state to expand access to and commit resources to public services, including education.

A law passed last year on “general education” defines public education as a state-financed and -run system serving the public’s interest.

The push lands against a national picture the Ministry of Education’s figures lay bare. Secondary gross enrolment across Grades 9 to 12 was 30.4pc, and net enrolment 22.9pc.

Addis Abeba was the only region to top a 100pc gross rate, with a net rate near 80pc. Yet, nationally, barely half of pupils complete Grade 8 and the survival rate to Grade 7 sits near a quarter. Those sitting the Grade 12 examination are already the narrow survivors of a leaking pipeline.

That the capital, the clear front-runner, still cannot lift its pass rate past 31pc is what gives the strategy its edge.

With the capital’s Grade 12 pass rate stuck near 31pc, the Bureau’s effort is seen as an attempt to reverse a persistent slide, yet it also raised a harder question about how targeted help can lift results without eroding equal access to quality learning.

The cluster model carries a social dividend alongside the academic one, mixing public and private students who rarely meet. A private school director, who asked not to be named, sees promise in that.

“Private school students often remain within their own social bubbles throughout their primary and secondary education,” the Director said. “Learning alongside peers from diverse public-school backgrounds gives them a vital head start in social integration, making the transition to university life far less daunting.”

However, specialists such as Melkam Zewdu (PhD), assistant professor of educational psychology at Bahir Dar University, are more cautious about what selective programmes do over time.

Grouping high performers with experienced teachers can speed learning, sharpen problem-solving and lift results. But Melkam warned that pouring extra resources into the advanced students risks leaving struggling learners without support.

“Too much drilling for the examination can pull learning toward memorisation and away from thinking,” she told Fortune.

Melkam was uneasy, too, about compulsory attendance during the holidays, arguing that intensive summer programmes driven by outside pressure can sap the motivation they mean to build and add to stress.

“Enrichment works best,” she said, “when it’s voluntary, when selection remains transparent and when it aims at broad intellectual growth rather than examination preparation alone.”

However, other experts, such as Girma Lemma (PhD), an associate professor at Addis Abeba University, place motivation at the centre. For him, policy formulation or impositions from parents, schools, or educational bureaus will not bring about the desired outcome.

“It isn’t simply a question of attending or not attending classes during break time,” he told Fortune. “It’s about creating interest in what students are learning. Talent combined with determination will help them join universities.”

Girma named examination anxiety as an additional drag, noting that pressure from teachers, tests, peers, and social expectations can make the examination hall feel overwhelming.

Schools’ leaders on the public side see opportunity where parents in some private schools see imposition.

Bekele Bogale, chairperson of the Parent-Teacher-Student Association at Beshale Public Secondary School, a cluster centre in Wereda 8 of Lemi Kura, one of the city’s 11 districts, called the programme “a needed intervention.”

His School organised meetings where its administrators presented the tracking data of Grade 11 and 12 national exam performances dating back to 2022.

“Before launching, our priority was building consensus with parents,” he said. “Seeing these figures firsthand gave parents a clear perspective to recognise and support the value of this effort.”

The School has folded Grade 6 and Grade 8 students into its summer classes for regional examinations, and the Association plans a review meeting after the first month.

According to Dita Beshada, vice director of teaching and learning at Beshale, the support predates the summer.

“Our academic support started during the regular term in November 2025 through early-morning, after-school, and weekend tutorial sessions,” he told Fortune.

Under the structure, the top 30 attend cluster centres, and the rest take school-based tutorials, both following the same module. The curriculum condensed essential content from Grades 9 through 11, focusing specifically on national examination competencies.

Experienced teachers deliver the lessons and receive transport allowances, and where money is tight, the School steps in.

“If a family is struggling financially, the student can request support from the School,” Dita said. “The School covers the fee.”

Students who finish receive certificates for the coming year. Those with legitimate reasons to stay away are excused. However, the unresolved argument is one of priorities.

The strategy’s authors expect the same top 30 to mentor weaker students during the year. But specialists worry that extra duty on high achievers could crowd out their own progress.

Girma argued that active, student-centred teaching can ease that load, and that accelerated models work best when they build motivation, engagement and confidence rather than chase scores alone.

Experts fear that selective grouping carries a subtler risk, too, that advanced students feel set apart while those left out read the sorting as a verdict on their ability, deepening divisions inside schools.

Whether scarce resources should back students already thriving or those struggling to reach basic competency is the question the “Excellence Strategy” cannot avoid.

They acknowledge that focus on teacher quality, structured support and school-community collaboration is a serious response to a decline. But they also cautioned that the strategy’s measure will be whether it lifts achievement while keeping the promise that quality education stays within reach of all students.

Coffee Export Platform Links Ethiopian Roasters with Overseas Consumers

Posted on July 26, 2026July 27, 2026 by Digital Editor

Ethiopian coffee roasters have gained a direct route to international consumers through a multi-brand e-commerce export platform launched by DHL Express Ethiopia and EXM Global PLC. The companies say it is the first platform of its kind in Ethiopia.

Bringing together 10 Ethiopian coffee brands in a single digital marketplace, the platform enables overseas customers to order freshly roasted coffee in quantities ranging from speciality retail purchases to larger commercial volumes. DHL Express will handle deliveries through its international logistics network, which serves more than 220 countries and territories.

The initiative combines EXM Global’s digital marketplace, supplier onboarding, quality assurance, and European Union Deforestation Regulation (EUDR) compliance services with DHL’s customs expertise and express delivery network.

Imran Nuruhussen, chief executive officer of EXM Global, said the platform creates a direct link between Ethiopian coffee roasters and consumers worldwide. He said it also enables local businesses to retain more value from their exports.

Dirk Van Doorn, managing director of DHL Express Ethiopia, said the partnership would help Ethiopian coffee businesses expand into international markets by combining digital commerce with global logistics capabilities.

From Digitisation to Digital Transformation

Posted on July 26, 2026July 30, 2026 by Digital Editor

Digital transformation has become one of the defining features of institutional modernisation in Ethiopia. Public entities, private firms, universities, banks and service providers increasingly rely on digital systems to automate processes, improve efficiency and modernise how they serve the public. From enterprise software procured abroad to applications built at home, organisations across the country are racing toward digitalisation.

However, beneath that rapid expansion, I see a structural problem taking root. The digital systems acquired or locally built often do not speak to one another. As institutions digitise on their own, the inability of their systems to connect has become one of the most serious limitations to system-wide transformation and lasting productivity gains.

The problem is no longer the absence of digital tools. It is that the tools cannot integrate, exchange data or work as one, creating an institutional paradox. Organisations invest heavily in software expecting efficiency, transparency and automation, but when systems run in isolation, the result is duplicated processes, repeated data entry, operational bottlenecks and disconnected decision-making. Instead of building integrated digital ecosystems, they end up building digital silos.

Interoperability, the ability of systems and applications to communicate and exchange information, has therefore become a strategic national question rather than a technical one.

The causes are diverse and deeply institutional. One originates in software procured abroad. Many proprietary systems grant only limited access to their internal architecture. Some vendors restrict or deny access to the Application Programming Interfaces (APIs) that make integration possible. Institutions that buy such technology often later discover that their systems cannot connect to anything else without costly customisation or continued dependence on the vendor. Hence, their transformation remains locked within isolated technological islands.

Another cause is organisational culture, in which most institutions design systems with a departmental mindset, each office optimising its own processes without considering the broader ecosystem. Finance systems are developed apart from human resources; procurement platforms rarely align with planning systems; and service-delivery applications often ignore national databases. Optimising single units overshadows the efficiency of the whole.

Interoperability failures between agencies draw more attention because they involve multiple institutions. Yet the tough nut to crack often lies within a single organisation, where departments run disconnected systems, fragmented databases, and incompatible workflows. Internal failures delay decisions and create duplicate effort long before external integration is even possible. It is a classic systems problem. Improving individual components in isolation does not optimise the whole, and localised optimisation can breed systemic inefficiency when coordination is absent.

Institutions worry that integration will expose them to cyber threats, unauthorised access or data misuse. The concern should be understandable, especially where cybersecurity governance remains underdeveloped, but security is increasingly used to justify isolation rather than to frame controlled collaboration. Local development practices complicate matters further. Many home-grown systems are designed for immediate operational use rather than long-term integration, offering user-level functionality without scalable integration architecture.

Organisations receive software they can use, but not systems they can expand, connect or fold into wider national platforms. Technological diversity further complicates matters, as institutions use different programming languages, database structures, hosting environments, and standards. The more systems emerge without common standards, the higher digital expansion adds complexity rather than removing it.

To its credit, the government has begun to recognise what is at stake. Initiatives such as “Mesob” signal toward integrated digital governance and shared infrastructure, and show a growing awareness that transformation cannot succeed through isolated systems alone. But such efforts need broader adoption, better enforcement and technical standardisation to reach nationwide scale. The consequences of poor interoperability are already plain. Citizens submit the same information to different offices; organisations maintain overlapping databases with inconsistent records; reporting systems fail to synchronise; decision-makers lack unified real-time visibility; and public funds are wasted on redundant investments that cannot talk to each other.

Most of all, I fear the country is confusing digitisation with digital transformation.

Digitisation merely converts manual processes into electronic form. Transformation demands integrated institutional intelligence, in which systems collectively improve coordination, planning, accountability, and service. Without interoperability, that transformation stays incomplete. Policymakers, thus, need a national interoperability strategy.

They should begin with mandatory interoperability standards for every public digital system. Each newly procured or locally built platform ought to meet integration requirements, including standardised APIs, data-exchange protocols, and security frameworks. Interoperability should be a procurement condition, not an optional extra. They also need to develop a national digital architecture framework that defines how institutions exchange information securely and efficiently.

The countries that succeeded in digital governance, among them Estonia, Singapore and the United Arab Emirates (UAE), treated interoperability as foundational infrastructure rather than an afterthought.

Transformation initiatives should not stay scattered across ministries and agencies. A central governance mechanism that can enforce standards, review digital projects, and ensure compatibility is essential. Local developers, too, have to move from isolated operational tools toward scalable and ecosystem-oriented solutions. Universities, technology institutes and innovation hubs should weave interoperability engineering, API design and systems architecture into their training.

Cybersecurity policy should evolve from restrictive isolation toward secure integration. Well-designed interoperability does not weaken security. It strengthens governance through controlled, auditable and standardised exchange.

The next phase of Ethiopia’s digital journey should not be decided by how many systems are built, but by how well they work together. The future belongs not to isolated pockets of digital excellence, but to connected institutional intelligence.

Month: July 2026