Author: Digital Editor

The Trump Administration has unexpectedly included Ethiopia in the list of countries subjected to new trade measures, imposing a 10pc levy on Ethiopian imports into the United States while granting a reciprocal 10pc tariff on American goods headed to Ethiopia. The move marks an unanticipated shift in Washington’s approach to Addis Abeba, which for years benefited from duty-free access under the African Growth & Opportunity Act (AGOA).

The tariff-free provisions had propelled apparel exports from Ethiopia to the U.S. market to nearly 349 million dollars in 2022, with textiles as the largest export category.

Ethiopia, however, has maintained tariffs averaging around 17pc on imports from the United States. This new arrangement seeks to address what U.S. officials describe as an imbalance, offering “fairness and reciprocity” in line with the Administration’s broader push to recast global trading rules. As part of its sweeping renegotiations, the Administration is dismantling unilateral trade concessions with 185 countries, Canada and Mexico excepted, in favour of reciprocal deals.

Bilateral trade between Ethiopia and the United States reached its highest point in 2022 at about 1.80 billion dollars. U.S. exports to Ethiopia have ranged from 575 million dollars in 2021 to 1.22 billion dollars in 2023, while U.S. imports from Ethiopia climbed from 465 million dollars up to 718 million dollars over the same period. The U.S. held a trade surplus in most of those years, rising to around 730 million dollars in 2023, though it briefly slipped into a small deficit in 2021 when Ethiopian exports slightly outpaced U.S. exports.

In the five years beginning in 2020, total goods trade between the two countries amounted to about 7.6 billion dollars, leaving the United States with an overall surplus of around two billion dollars. Trade figures dropped to 1.5 billion dollars last year, with U.S. exports to Ethiopia sliding by 17pc and imports from Ethiopia dipping by five percent compared to 2023. Despite the decline, the United States still posted a sizeable surplus of roughly 552 million dollars in 2024.

The tariff shift threatens to compound economic pressures in Ethiopia. Thousands of jobs linked to textile and apparel manufacturing in industrial parks could be at risk, and foreign investments in the country’s budding industrial sector may face new uncertainty. The removal of AGOA privileges in early 2022, triggered by human rights concerns during the civil war, had already dealt a blow to Ethiopia’s textile industry. Officials disclosed that exports plunged more than 40pc following the suspension.

Financial Assistance Targeted at Agribusiness, Digital Expansion, and Democratic Institutions

The European Union (EU) has agreed to provide Ethiopia with a grant of €240 million to support development initiatives across key sectors.

This financial assistance will primarily bolster projects in agribusiness, enhance digital competencies, and strengthen democratic institutions. Furthermore, the agreement will support public administration and facilitate efforts to promote stability and recovery in regions emerging from conflicts, including the Tigray Regional State.

On Thursday, April 3, 2025, the Ministry of Finance announced the details of the grant agreement. Finance Minister Ahmed Shide and the EU Ambassador to Ethiopia, Sofie From-Emmesberger, signed the agreement.

Ahmed Shide stated that the financial package would not only encourage private sector investment but also aid in the overhaul of tax and customs frameworks. He emphasised that this assistance aims to enhance agribusiness, health, and education services throughout the nation.

Emmesberger said that, asserting that the grant reflects a mutual commitment to fostering long-term progress in Ethiopia.

Initiative Aims to Enhance Product Quality and Facilitate Global Trade Integration

The Ethiopian Standards Institute (ESI) has announced the upcoming implementation of a new standard mark for imported products, which will enable consumers to easily distinguish them from locally manufactured goods.

This initiative is part of ESI’s broader strategy to ensure product quality and safety. Authorities emphasise that the introduction of this mark aligns with Ethiopia’s ongoing efforts to agree to the World Trade Organization (WTO). By adopting international standards and regulations, Ethiopia is demonstrating its commitment to global trade practices. According to the WTO Agreement on Technical Barriers to Trade, member nations are encouraged to utilise relevant international standards as a foundation for their technical regulations, provided such standards are effective and suitable for local conditions.

The ESI believes that the implementation of the standard mark will assist Ethiopia in joining the ranks of other member countries that have adopted similar import standards. This, in turn, is expected to support the country’s trade credibility and facilitate smoother access to international markets.

The newly designed standard mark will soon be applied to imported items meeting the necessary criteria, ensuring they are clearly identifiable and subject to regulation alongside local products. This initiative mandates that imported goods adhere to the Institute’s standards before they can receive the mark, effectively aligning the quality of imported items with that of domestic offerings.

The National Bank of Ethiopia announces further foreign exchange auctions as demand persists despite currency fluctuations.

The Birr was traded at 131.71 against the Dollar during a central bank auction held today, reflecting a modest 2.96pc increase.

The National Bank of Ethiopia (NBE) offered half a billion dollars in what is now its third auction since authorities liberalised the currency regime in late July of last year. A day prior to the auction, Governor Mamo Mihretu announced that such sales would occur bi-weekly.

Twelve commercial banks participated in this latest round, a decrease from the 27 bidders in the previous auction, resulting in a weighted average exchange rate of 135.61 Br to the dollar.

Despite this slight uptick in the Birr’s value, demand for foreign currency remains pronounced, exceeding the available supply. The first auction conducted in August 2024 recorded a weighted average of 107.9 Br, indicating a 22pc appreciation for the dollar this week.

Central bank officials have attributed their decision to conduct bi-weekly foreign exchange auctions to an improved balance of payments, floated by higher export revenues, consistent gains in remittances, and peak gold proceeds. However, the disparity between the auction results and the lowest purchasing rate of 124.01 Br per dollar at the Commercial Bank of Ethiopia (CBE) highlights ongoing shortages, despite a solid foreign exchange reserve. Mamo disclosed that reserves have soared 200pc from levels recorded prior to the deregulation of the forex market, which analysts estimate may bring the total to nearly two billion dollars.

The NBE confirmed that another auction will be held in the next two weeks, with the specific date to be announced a day before the sale.

Over the past almost decade and a half, more than 20 billion Br has been collected for the construction of the Grand Ethiopian Renaissance Dam (GERD), disclosed the project coordination office. Of this amount, all but two billion Birr, came from the sale of bonds and donations from Ethiopian citizens, while over one billion Birr was raised through bonds and gifts from the Diaspora. The Office also reported that over one billion Birr was obtained from various other sources.

The foundation plaque for the GERD was laid on April 2, 2011, in the Benishangul Gumuz Regional State. The initial plan was to generate 5200Mw of electric power. The completion target was five years. However, as of last week, the dam remains under construction after 14 years.

The Project Office disclosed that over 800 million Br was collected in the past eight months. This includes over half a billion Birr from bonds and gifts from Ethiopians and nearly 43 million Br from Diaspora contributions. During the same period, 112 million Br was collected through 8100 short mobile messages, and over 110 million Br was collected through the Ethiopian Electric Power gift collection bank account.

Prime Minister Abiy Ahmed (PhD) told MPs three weeks ago that the GERD, with construction reportedly nearing completion, is expected to be inaugurated within the next six months.