Radar | Apr 21,2024
Brazzaville – Congo
The reform began at the retail counter, not in the grand language of continental finance. Private operators have begun submitting permit applications to open independent foreign exchange bureaus in Ethiopia, a modest administrative step with implications that extend beyond the sale of cash notes.
For travellers, businesses and remittance recipients, it promises more legal counters where foreign currency can be bought and sold at “negotiated rates.” For policymakers, it tests whether a country long governed by foreign-exchange rationing can move toward regulated competition without losing control over scarce reserves.
There are now 13 independent foreign exchange bureaus among regulated financial institutions, giving Ethiopia’s painful foreign-exchange transition a new retail face. The policy change was narrow in design, yet today it presses on a central weakness of Ethiopia’s reform agenda where credibility is seen as the price of foreign currency.
However, the policy reform does not conjure dollars. It will not create exports, rebuild reserves, erase arrears, or end the scarcity that, for decades, has been managed through waiting lists, surrender rules, privileged access and a parallel market that has revealed the true price of the dollar more accurately than official postings.
But it is hoped to draw part of the cash market out of informal channels, making the exchange-rate regime more visible to regulators and more accessible to households and businesses.
This small Ethiopian experiment may sit naturally inside the larger argument made this week by Sidi Ould Tah (PhD), the African Development Bank’s new president.
In his first annual meetings address since taking over the Bank last year, Ould Tah was visibly avoiding spectacle. Instead, he offered a balance-sheet reading of Africa as a continent “rich in assets, poor in conversion mechanisms, and constrained less by the absence of capital than by the failure” to organise it into bankable instruments.
However, the contrast with his predecessor, Akinwumi Adesina (PhD), the Nigerian citizens who left the Bank last year after serving two terms, was hard to miss. Adesina made the AfDB presidency a public stage, filled with memoranda, launches, signings, photo opportunities and campaign-style performances. Ould Tah appeared quieter, more private and media-shy. He did not hold the traditional open questionand-answer session with the press corps during the opening of the Bank’s annual meeting on Tuesday, May 26, 2026, in Brazzaville, capital of the Republic of Congo.
But the restraint sharpened rather than softened the test before him.
On a panel, Congo’s Denis Sassou Nguesso looked at the new President and said, “We trust you.” Gabon’s Brice Clotaire Oligui Nguema was blunter, telling him to “be courageous.”
The advice captured the political mood around Ould Tah’s presidency.
According to an AfDB official, “he does not need to outshine Adesina on stage. He needs to show that the Bank can move from announcements to assets, from signed memoranda to financed projects, and from visibility to delivery.”
According to Bank officials, Ould Tah wants the AfDB to act less like a competitor to smaller development financiers and more like a catalyst for large transactions, especially projects requiring more than 100 million dollars in financing. The model would rely on the Bank’s convening power, balance-sheet credibility and political access as much as its own lending.
It is a less theatrical mandate, but arguably a more demanding one. Ould Tah organised his language around Africa’s “three great paradoxes.”
The continent has about 18pc of the world’s population, more than 30pc of global mineral resources and over 60pc of the planet’s uncultivated arable land. Yet it accounts for only about three percent of global trade and three to four percent of global GDP.
Ould Tah called this “the weight without influence.”
Africa needs more than 400 billion dollars a year for structural transformation while holding more than four trillion dollars in domestic savings and assets across banks, pension funds, insurers and sovereign funds. It is projected to require between 130 billion and 170 billion dollars annually for infrastructure, with a yearly financing gap of 68 billion to 108 billion dollars, even as considerable opportunities remain in energy, logistics, digital infrastructure, food systems, and critical minerals.
The President’s diagnosis of the external environment was no less severe. The continent is absorbing the effects of a pandemic that disrupted supply chains, wars that changed trade routes and energy markets, imported inflation that squeezed households and public finances, declining official development assistance, higher interest rates that raised the cost of capital, and geopolitical fragmentation that has returned to the centre of international relations.
“Africa is no longer peripheral. From the Suez Canal to the Cape of Good Hope, from Bab el-Mandeb to critical mineral corridors, the continent is now central to logistics, energy security, transition minerals and future growth,” Ould Tah told delegates, in the presence of heads of state from Congo, Gabon and the Central African Republic (CAR). “But centrality has not yet translated into cheaper finance.”
The 2026 African Economic Outlook, released at the meetings, reinforced his point.
AfDB expects Africa’s growth to slow to 4.2pc this year, from 4.4pc last year, before returning to 4.4pc in 2027, as Middle East tensions push up fuel and food costs. The continent remains among the fastest-growing regions globally, but the Bank warned that the final impact would depend on the duration of supply-chain disruptions and their effects on energy and fertiliser prices.
Kevin Chika Urama (PhD), the AfDB’s chief economist and vice-president, framed thesame challenge in the 2025 Outlook as one of capital mobilisation and governance.
Africa’s growth improved from three percent in 2023 to 3.3pc the following year, but AfDB officials called it, “fragile, exposed to conflict, trade uncertainty, declining concessional finance and inflation.” They projected growth of 3.9pc last year and four percent this year after downgrades linked partly to tariff shocks and global uncertainty.
Urama also disclosed that Africa’s poverty headcount fell to 30.6pc in 2024 from 32.2pc in 2014, a sign of resilience, but not “enough to overcome weak per-capita income growth, youth unemployment and structural fragility.”
Ethiopia’s numbers fit uncomfortably into this continental story. According to the AfDB, the economy grew by 7.3pc in 2023/24, up from 6.6pc the previous year, driven by industry and agriculture on the supply side and private consumption and investment on the demand side. Inflation averaged 26.6pc, amid a current account deficit of 2.9pc of GDP.
The country remained at high risk of debt distress after defaulting on a 33 million dollars Eurobond coupon in December 2023.
The financial sector remained “cautiously stable,” with non-performing loans at 3.9pc,excess reserves to deposits of only 0.8pc, and subdued credit growth under a cap. The Bank projected Ethiopia’s growth at seven percent in 2025/26, with inflation easing to 11.7pc, the fiscal deficit steady at 1.9pc of GDP, and the current account deficit improving to 1.5pc as “reforms and a more export-friendly exchange-rate regime take hold.”
Yet the risks remain formidable due to debt vulnerabilities, commodity price volatility, climate shocks and conflict. Africa’s fourth-wealthiest country in renewable resources, Ethiopia has sizeable natural and human capital. But, according to the AfDB, weak institutions, inadequate infrastructure, low technology adoption, poor governance and weak capacity have blocked the conversion of those assets into development.
Ethiopia represents a country example of the paradox Ould Tah put before the Bank’s shareholders this week, where Semereta Sewasew, state minister for Finance, is attending.
“Africa should not wait for external benevolence to close its financing gap,” Ould Tah told delegates.
His contention is that money exists, but is not sufficiently pooled, de-risked, packaged and deployed at a scale equal to Africa’s needs. The annual meetings, organised around “mobilising Africa’s development financing at scale in a fragmented world,” drew more than 3,000 delegates and focused on long-term finance for energy, food security, climate adaptation, infrastructure and jobs.
Urama estimated that with the right policies, Africa could mobilise and retain about 1.43 trillion dollars annually from efficient tax mobilisation, curbing leakages, reducing risk premia and formalising business activities. He also listed small private firms, weak research and development, informality exceeding 85pc of economic activity, high capital costs, poor infrastructure, intra-regional barriers and governance weaknesses as barriers.
Sceptics counter that Africa’s internal capital is already invested, its savings rate is low, and its development needs are too large to be financed domestically alone.
The newly mushroomed forex bureaus across Addis Abeba, although too insignificant to decide the fate of Africa’s financial architecture, are a revealing miniature of the problem Ould Tah characterised.
A country with large ambitions, a central bank trying to reform, and abundant unmet demand is attempting to replace rationing with regulated markets. Success will depend less on licensing than on whether the system channels private incentives toward public stability.
That is also the test facing AfDB’s new President. Africa’s paradoxes are no longer difficult to state but difficult to execute against. The continent has weight without influence, savings without sufficient transformation, and opportunities without adequate financing.
PUBLISHED ON
May 27,2026 [ VOL
27 , NO
1361]
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