TOMATOES TASTE OF INFLATION

Posted on October 12, 2025October 13, 2025 by Digital Editor

Tomato prices in Addis Abeba have surged to unprecedented levels, with retail stands charging between 85 Br and 140 Br a kilo, nearly triple last year’s rates. Premium varieties such as Gelila fetch 90 Br a kilo, driven upward by escalating input costs, currency depreciation, and persistent supply chain disruptions. The Birr’s sharp decline against the dollar has more than doubled the cost of imported fertilisers, pesticides, and seeds, most of which originate from the Netherlands and Israel. These increased expenses ripple through every stage of the value chain, squeezing producers and consumers.

For distributors and farmers, the squeeze is relentless. Rental costs for transporting crates have soared, and diesel needed for irrigation now commands 126 Br a litre, with a modest plot consuming as much as 200Ltrs a day. Seed prices have multiplied sixfold, and the outlay for agrochemicals has nearly tripled since last year. Agricultural input catalogue lists over 15 essential items, each with a price tag now measured in thousands, if not tens of thousands, of Birr. Such rises has forced some farmers to abandon tomato cultivation altogether, unable to shoulder costs that have risen from 30,000 Br to over 250,000 Br a quarter-hectare.

Urban households and retailers are not spared, as many families now stretch recipes or substitute ingredients to cope. The outlay for a weekly supply of tomatoes becomes prohibitive. Vendors at city markets report shifting consumer habits, with shoppers moving down the price ladder or opting for alternatives like green chillies. For many, tomatoes, once a kitchen staple, have become an occasional luxury. Restaurant operators, too, find their margins decimated, as the cost of a vital ingredient cannibalises net profit and threatens their viability. Urbanisation, dietary diversification, and the expansion of the hospitality sector have driven up tomato consumption by an estimated three percent annually since 2017, with national demand now ranging from 25,000tns to 30,000tns a year. However, supply has not kept pace. Projections indicate output may drop to over 24,000tns by 2026 without a substantial boost in productivity and supply chain integration. Paradoxically, Ethiopia exported almost 23,000tns of tomatoes in 2023, two-thirds of its national output, mostly to neighbouring Somalia and Djibouti, underlining the country’s increasing regional footprint but intensifying domestic shortages.

Tomato Squeeze Guts Kitchens

Posted on October 12, 2025October 13, 2025 by Digital Editor

The sun rose unsteadily over Addis Abeba last week, its pale light muted by dust and exhaust, flickering off tomato crates stacked on narrow streets in the Haile Garment neighbourhood.

For 32-year-old Semira Adem, the amber flash of ripening skins was a taunt. In better days, she took home five, even seven, kilograms at a time, simmering a weekly supply of sauce for Macaroni and Spaghetti. Now she can barely pay for two. Two weeks earlier, she bought them for 25 Br.

“Which comfortable life allows us to buy ingredients now?” she said, exhaling through clenched teeth. “It’s impossible to live.”

Retail stands ask 85 Br to 140 Br a kilo, roughly triple last year’s price. Gelila tomatoes, a premium variety, cost 90 Br a kilo. After transport, sun and rain damage, and the odd crate lost to spoilage, the margin is razor-thin. Input costs have rocketed. Most fertiliser, pesticide and seed arrive from the Netherlands, Israel and elsewhere, and the Birr’s slide against the dollar has doubled or tripled landed prices.

It is what Anwar Alewi, 36, a distributor, experiences regularly. Last week, he steered an ageing pickup through the market at dawn, buying from small plots and delivering to hotels and kiosks. He rented 86 plastic crates, each weighing about 60 kg, for 4,000 Br.

“We’re suffering too, and we’re not profiteers like people think,” he said above the clatter of handcarts.

Fuel deepens the pain. Irrigation pumps swallow diesel at 126 Br a litre; a modest plot burns 200Ltrs a day. Winter-hardy seed demands 3,500 grains per plot, four Birr each, or 28,000 Br before a field is even ploughed. Chemicals that cost 3,000 Br last year now run 8,000 Br. Seed that fetched five Birr a packet sells for up to 30 Br.

“It’s nearly a 50pc jump in a single season,” said Eshetu Bejiga, who manages the Awash Olana Irrigation Farmers’ Union.

Ashenafi Feyissa, production coordinator at the Oromia Agricultural Cooperative Federation, laid out the macro picture. The dollar rose from 58 Br to 140 Br, while lending rates crept from 12.5pc to 14pc. Almost all agrochemicals are priced in hard currency. The Federation’s catalogue lists more than 15 inputs, from herbicides and pesticides to disease control, costing 3,045 Br to 12,000 Br each.

“The burden keeps shifting to farmers and then to consumers,” he said.

Fereja Tessema, who has farmed for 27 years along the Awash River, pulled up his trellises this season and sold a few sheep to stay afloat.

“I stopped working on tomatoes because of the cost of inputs,” he said. “One quarter-hectare used to cost me 30,000 Br. Now it takes 100,000 Br to 270,000 Br.”

For other farmers, such as Solomon Ayalew, who farm outside Modjo, the math is mind-boggling. It takes more than 250,000 Br to produce one quarter-hectare.

“These factors have resulted in substantial losses for us,” he told Fortune.

A truck from Awash to Addis Abeba costs 29,000 Br, not to mention the 20,000 Br loading and unloading fee. Seed prices swing with every shipment, keeping planning close to guesswork. At the other end stands retailer Bontu Gemechu, 22, who operates a stall in the Hanamariam area, Nifas Silk District. She saves 100 Br a day to cover rent. Her freckled and bruised stock sells from 10 Br to 95 Br a kilo.

“If I’ve nothing to eat, I will fast,” she said, packing split fruit into plastic bags for bargain hunters.

Households respond by stretching recipes. Some mix powdered pepper with water and salt to mimic tomato sauce; others substitute cabbage. Vendors report brisk sales of cheaper green chillies, evidence that buying habits are shifting down the price ladder.

“I never thought I would cook spaghetti without tomatoes,” Semira said. “But, I do it every other night now.”

Another household by Fate Tura, unemployed and raising three children, has halved its purchases. Her 17-year-old son chips in 2,000 Br toward rent while juggling military service.

“I obsess over what to buy when my kids come home,” she said.

Urbanisation, dietary diversification, and a thriving hospitality sector have driven consumption up by roughly three percent a year since 2017. Ethiopia now consumes between 25,000tns and 30,000tns of tomatoes annually, with projections forecasting continued upward pressure. Supply is not keeping pace. Without improvements in productivity and supply chain integration, output is projected to fall to 24,160tns by 2026, exacerbating the demand-supply mismatch.

Paradoxically, while domestic shortages persist, Ethiopia exported 22,810tns of fresh tomatoes in 2023, nearly two-thirds of national output, generating 11.4 million dollars. Somalia and Djibouti remain the principal buyers, leveraging geographic proximity and market integration. Additional volumes went to Nigeria, Saudi Arabia, and Kenya, the country’s emergent footprint in East African horticulture.

The export momentum, while attractive, risks crowding out domestic processors and urban consumers like Semira and Fate, who now face erratic prices.

Before inflation caught fire, Anwar’s daily routine used to empty his crates by noon. These days, he hangs around until late afternoon, persuasive smile fading as customers flinch at the numbers on his scale. On weekends, he sometimes brings the unsold fruit back to wholesalers outside the city, accepting a smaller payment for produce already bruised by potholes.

“Even a small crack on the skin makes hotels reject them,” he said. “Every rejected box eats into the little profit left.”

He figured spoilage and chargebacks now wipe out nearly a third of his gross revenue.

Restaurants like Siyamrebesh Café Pizza & Restaurant feel the bite. The restaurant burns through 12Kg a day for sauces that anchor pizzas and burgers. The weekly tomato bill has tripled, slicing net profit by half from 20pc.

“We can’t serve what customers want as prices rise,” said Zena Tenker, the manager. “If this keeps up, we may close.”

Official mandatory price ceilings have done little.

“All the materials we sell follow government orders,” said Eshetu Bejiga.

The authorities blame intermediaries active in the market for inflating prices to widen their margins.

In the shadow of the more celebrated commodity exports, primarily coffee, oilseeds, and khat, tomato production is a bellwether for the horticultural prospects, which grew by five percent in 2023 to reach 36,100tns. It offered a rare glimmer of resilience in a sector long beset by volatility.

Mekonnen Solomon is the horticultural export coordinator at the Ministry of Agriculture. He observed a trend where when farmers cannot afford quality breeds, they abandon tomatoes, supply shrinks, and prices jump.

“The price of seed drives inflation,” he told Fortune.

Oromia Regional State, leveraging agro-climatic advantages and relatively better irrigation infrastructure, contributes up to 60pc of national output, led by East Shewa and Arsi zones. Amhara Regional State trails distantly at around 20pc, with the Southern Nations, Nationalities and Peoples’ State as well as fringe contributors like Afar and Gambela regional states marginally supplementing the balance.

After peaking at 42,000tns in 2020, a confluence of erratic rainfall, pest infestations, and a sluggish input supply chain triggered a dramatic fall to 33,600tns in 2021. The modest recovery in 2023 was less a structural turnaround than a partial correction.

Critically, post-harvest inefficiencies continue to drain producer margins. An estimated 25pc of the tomato crop is lost between field and market, casualties of inadequate storage, poor transportation infrastructure, and limited cold chain investment. Average yields, between six to nine tonnes a hectare, compare unfavourably with regional peers, let alone global standards.

Seasonality compounds the strain. Most farmers plant in January, when temperatures are mild and disease pressure is low. Diseases such as leaf spot, bacterial spot, and early blight (known locally as Wag) spread quickly as late blight races through fields between June and August.

“Early protection is critical,” said Jima Degaga, chief for quality-control of the Meki Batu Fruits & Vegetables Growers’ Cooperative Union Ltd, in Oromoa Regional State.

The Union was established in 2002, incorporating 12 primary cooperatives, with 527 members farming in Dugda and Adami Tulu Jido Kombolcha weredas, near the Dembal Lake. One of their farmers may pay 1,000 Br to 7,000 Br for fungicides such as Ranman, Neem oil or Amistar, and up to 250,000 Br for full coverage. Those who plant in January manage with cheaper insecticides like Radiator and Tresor at about 2,000 Br.

From June on, cold weather and fungi push many growers into wheat. Many growers produce over one million quintals a year. The Union sells fertiliser at set rates, but shortages send farmers to private merchants who charge 2,000 Br to 3,000 Br more per unit, according to Lencho Hamde, its director.

Some commercial outfits absorb the shock. Take Super Arsity Production, incorporated in 2004 as a flower exporter. It now spreads across 49hct in Awash Melkasa. Weather stations and disease sensors monitor fields; crop rotation covers 38pc of the acreage. The farm harvests an average of 930Qtls a year. Resistant seed brands (Gabbi, Pachuca, Galaxy and Yug) cost up to 7.50 Br each but shrug off hail. Chemicals such as Ridomil Gold, Cooper, Acrobat and Mancozeb, along with fertilisers such as urea, potassium nitrate and MAP, preserve output.

Researchers press for organic inputs.

“We ought to focus more on organic fertilisers rather than synthetic ones,” said Alemenew Tagel (PhD), a horticulture lecturer at Gonder University.

Compost and dung improve soil and trim hard-currency spending. Organic matter releases nutrients slowly, supports beneficial microbes and reduces run-off into rivers. Yet, scaling up demands extension training and reliable collection systems.

A ray of hope appeared in August, when Nigeria’s Dangote Group announced it would build a 2.5 billion dollar urea plant in Gode, Somali Regional State. Dangote will hold 60pc, with the state-owned Ethiopian Investment Holdings (EIH) taking the rest. Many hope the plant could temper fertiliser prices that now choke growers, though engineers say it will need steady electricity and rail links to reach full capacity.

Until then, growers juggle a fragile calculus of sun, soil and debt. The Federation once held 80,000Qtls of fertiliser in reserve and planned for 300,000Qtls, yet gaps persist. Private suppliers fill the void, layering costs that echo down to city buyers. Extension agents now tour villages, urging farmers to aerate soil, rotate crops and spray early.

“Exposing soil to air before sowing can cut chemical bills in half,” Jima said during a recent field day that drew dozens despite midday heat.

Weather adds another wild card. Heavy rain, hail and sudden temperature drops can wipe out a crop overnight.

“Tomato production is unstable,” Lencho said. “In comfortable months, the crop flourishes; in cold months, diseases take over.”

Farmers share photos on their phones of flattened greenhouses and drenched seedlings, evidence that even perfect management cannot tame the climate. However, demand in the capital never wanes. Tomatoes thicken “Shiro,” locally made stew, brighten “Fir-Fir,” and crown the burgers that fuel a swelling workforce. Each fruit carries the weight of global supply lines filtered through local bottlenecks and a battered currency.

As the sun climbed over Haile Garment, Semira counted the coins in her palm and found she could buy exactly two kilos, no more. She eased the tomatoes into a fraying plastic bag and started home across the cracked asphalt. Her hope, like that of farmers and traders up the line, is that the next harvest will bring relief, and that two kilos of tomatoes will not feel like a luxury.

The Human Flight a Failure of Political Imagination, Not a Mere Economic Policy

Posted on October 12, 2025October 11, 2025 by Digital Editor

Ladislas Farago, a roving Associated Press (AP) correspondent, arrived in Ethiopia in 1935 expecting the war between Ethiopia and Italy, provoked by skirmishes at Wal Wal, would have started earlier than his arrival. What he found, he later wrote in his memoir, “Abyssinia on the Eve”, was “a land of unlimited impossibilities”.

Nearly a century on, the phrase fits again. The Horn of Africa is sliding into a slow-motion emergency, if not the prospect of catastrophic war. Nowhere is the strain heavier than in Ethiopia, the continent’s second-most-populous country. Once touted as an economic wunderkind, the country is now exporting not only coffee and oilseeds but, above all, its own people.

Queues curl through the departure halls at Bole International Airport. Farther east, migrant trails wind across Djibouti’s desert and Yemen’s badlands. Every line tells the same story of a country bleeding out its young. This exodus is more than a scatter of personal tragedies. It is the visible symptom of a deeper malaise. Unless Ethiopia’s contemporary leaders strike an inclusive political bargain, the flight of brains and the desperation of people with low incomes will become the defining current of the country’s modern history.

The headcount looks benign, judging by the net migration rate officially put at a mere -0.1 migrants per thousand people. On the surface, they may appear nothing more than a trickle. In reality, a torrent flows below the statistical surface. The population, estimated at over 100 million, has already shed 2.5 million to three million citizens, edging to three percent of the total, now living abroad. Roughly a quarter of a million of them depart every year. In the three years beginning in 2017 alone, 400,000 trekked irregular routes to the Arabian Peninsula, gambling on smugglers, storms and rifle sights.

Saudi Arabia hosts the largest Ethiopian community, with roughly 750,000 as of 2017, of whom six in 10 have slipped in without paperwork. Another close to 300,000 have settled in the United States (US). South Africa shelters about 120,000 people, more than 90pc of whom are outside official channels. Behind each figure lies a bereft family, an understaffed village school, a hospital short of nurses because its best graduates are stacking beds in Jeddah or street hawking in Pretoria.

Ethiopia has ploughed billions of Birr into universities, only to watch its new professionals depart. The Labour Ministry, in a startling half-year snapshot, counted over 181,000 skilled workers, including engineers, nurses, and architects, leaving for overseas jobs. Remittances were meant to offset the loss, yet in 2023 they totalled a paltry 539 million dollars, according to www.theglobaleconomy.com, a mere 0.36pc of GDP, a sliver of the 5.13pc global norm and barely a third of the peak reached in 2014. Average remittance inflows amount to around 4.5 dollars per Ethiopian each year.

A trained nurse is worth far more in a ward than that in a Western Union slip.

Why do Ethiopians choose risk over roots?

The reasons are neither mysterious nor hidden. They are simply ignored by those in power. War and militarised conflicts are foremost. The brutal two-year civil war ignited in the Tigray Regional State, which claimed hundreds of thousands of lives and uprooted millions, has been followed by violent conflicts in the Amhara Regional State, and exacerbated the insurgency in the Oromia Regional State. For many young men, the threat of arbitrary arrest, forced conscription, or ethnic reprisals turns migration into a necessity. Political repression and widespread insecurity have hollowed out what faith remained in state institutions.

Neither do macroeconomic headlines offer much comfort. The GDP may have expanded by a brisk 8.1pc in 2023/24, yet the boom rarely touches household budgets. Urban youth unemployment sits at 27.2pc, twice as high for women, and nearly 40pc of Ethiopians subsist on less than a dollar a day. The official poverty rate, 32pc, tops the sub-Saharan average. Even graduates queue for cleaning jobs in the Gulf states.

The Brewed Buck (Birr) has sagged, losing nearly 150pc of its value against the dollar since August 2024. Bread and fuel prices in Addis Abeba have skyrocketed in the past two years. Teachers drive ride-hailing cars after class; doctors who strike for wages are told by officials to “leave if they’re unhappy”. Many appear to have accepted the advice.

Demography magnifies the stress. Seventy percent of Ethiopians are under 30, and about two million new job-seekers join the labour market annually. Rural land, once a guarantee of subsistence, is scarce and depleted, pushing the young toward towns that hold too few vacancies, or toward departure lounges. In the outskirts of Addis Abeba, where many have migrated from rural areas to find cheaper accommodations, frustrations crackle like static.

Nowhere is the peril clearer than on the eastern route. A trek from Ethiopia through Djibouti or Somalia, across into Yemen, and up to Saudi Arabia. In the first half of 2025, monitors logged 238,000 outbound crossings on this corridor and counted more than 350 deaths. Each month, about 6,500 Ethiopians gamble everything for a chance at domestic work in the Gulf. A bilateral deal signed with Saudi Arabia in March 2023 promised half a million housekeeping visas for Ethiopian women. It regularised one stream while leaving migrants as exposed as ever to abuse, trafficking and legal limbo.

Migration, in turn, has become an enterprise. Travel agents and intermediaries hawk glossy dreams, charging fees that swallow a year’s income. The government, desperate for hard currency, touts overseas labour schemes as quick fixes to its balance-of-payments problems, as if people were mere parcels of export.

Policymakers may be tempted to swat at symptoms by enforcing border curbs, mounting anti-trafficking drives, and jailing smugglers. Such tactics amount to palliative care for a festering wound. The ailment is deep in the political arena. Ethiopians have been confronted with a grim reality at home where the social contract collapses, and violence and exclusion snuff out hope. A broad and earnest political settlement among elites of various shades of interest may restore trust.

The economy, likewise, should turn from headline growth to inclusive gains. Treating citizens as “human exports” may yield quick dollars, but squanders the engines of long-term prosperity. Social cohesion, frayed by years of patronage politics and sectarian conflicts, needs painstaking repair. A new civic compact should cherish diversity while knitting a shared identity, investing in education and health for all.

Absent such remedies, Ethiopia risks being judged not by its dams or its growth statistics but by the size of its diaspora. Talent will continue to seep away. The young will continue to trade farmland and lecture halls for desert tracks and cargo holds. Grand infrastructure may span rivers and gorges, yet the bridges that matter, between citizens and state, will crumble.

Migration will always be part of Ethiopia’s story. Students left for higher education abroad in the 1960s; refugees fled the Derg’s terrors in the 1980s; and today’s cohorts chase wages. But mass flight need not define the future. An inclusive polity, a fair economy and a social contract anchored in dignity and hope could entice the youth to stay, and to dream at home.

Current leaders, entranced by vanity projects, would do better to confer dignity with a degree rather than a boarding pass. Ninety years after Farago’s visit, Ethiopia can be a land of “unlimited possibilities”. The choice is between channelling the restlessness of the young into nation-building, or watching them march across deserts and high seas in search of prospects their homeland failed to provide. Anything less is not merely economic folly. It would be a betrayal of a generation and its history.

Ministry Shifts Gears as Number Plate Change Fuels Debate

Posted on October 12, 2025October 13, 2025 by Digital Editor

A sweeping change in the vehicle licensing system has tilted the scales in favour of electric vehicle (EV) owners and public transport operators, while levying heavier costs on drivers of fuel-powered cars.

The policy shift is part of the federal government’s push to modernise transport infrastructure, advance its climate commitments, and enhance revenue mobilisation. Unveiled last week through a directive signed by Transport & Logistics Minister Alemu Sime (PhD), the directive introduces a tiered fee structure. Green vehicles and mass transit fleets receive subsidies, while internal combustion engine (ICE) vehicles face increased registration costs.

State Minister Bareo Hassen justified the pricing disparity as a deliberate economic incentive to shift consumer preferences toward an eco-friendly transport system. The Ministry is capitalising on premium pricing for personalised license plates, names and number combinations, requiring a bespoke procurement process.

“This will modernise the country’s transport infrastructure and generate additional revenue for the government,” said Minister Alemu.

The plan comes as the Ministry embarks on an ambitious nationwide replacement of all vehicle plates before year’s end. According to the ministers, who briefed the media last week at their office on General Abebe Damtew Street, the sweeping change targets “to standardise vehicle identification, replace the patchwork system that has prevailed for decades, and help the government curb fraud.” They claim the changes will also support Ethiopia’s commitment to the African Continental Free Trade Area (AfCFTA) agreement.

For two decades, roads have been a patchwork of vehicles displaying 17 different colored license plates, each marking a particular category or regional state. While functional, the rainbow of plates has been criticised for reinforcing perceptions of regional identity. The new directive pares down the system to three standard colours. Transport officials say this will cut costs and align the transport sector with international standards.

“One plate, one vehicle,” said Alemu, underlining the link between a vehicle and its identification.

The plates themselves will feature three letters and four numbers, raising identification capacity to 120 million vehicles, a tremendous leap from the previous nine-million ceiling. The directive also mandates that plates be permanently affixed, ending the longstanding practice of traffic police removing them as a penalty, a measure the Minister conceded was never legally mandated. The ministers have displayed sample plates featuring a holographic sticker that holds encrypted data and logs key vehicle information, such as accident records.

“The person who doesn’t have the right to know some information shouldn’t know,” said Alemu, stating that the new system’s coding will offer regulators a confidential way to share information.

The Ministry estimates that at least 1.6 million vehicles are currently on the roads across the country, although the actual figure may be higher. Two million plates have already been procured, with 50,000 delivered. Yet one key element, the software to digitise the system, has lagged behind schedule, a delay Alemu blamed on contractors’ slow development.

“We plan to roll this out within two months,” he conceded. “But it depends on the software developers.”

According to federal transportation officials, the system will allow vehicle ownership to be updated or a vehicle’s purpose to be changed without issuing new plates, a shift that could save owners and the government time and money. Historically, such changes required new plates, increasing costs and administrative burdens. The authorities also hope the system will eliminate loopholes that allowed contraband vehicles to receive plates from decommissioned ones, a practice that has undermined accurate record-keeping. Minister Alemu attributed incomplete vehicle data to inefficiencies in infrastructure development.

“The lack of reliable data,” he said, “has made it difficult to allocate fuel and track losses.”

By establishing a comprehensive vehicle database, the Ministry expects to strengthen planning and resource management.

A major innovation is the introduction of a digital penalty system that links traffic enforcement to regional transport bureaus. Traffic police officers will be able to issue fines by scanning a QR code on the plate, instantly accessing vehicle and owner information without needing the driver present.

“We’re planning to implement it this year,” said the State Minister.

The Ministry believes this will reduce costs and improve accountability, making it easier to track ownership changes and vehicle history.

The new directive includes provisions for inclusivity, such as plates for qualifying vehicles that display a “PD” marker, with unique markings for each plate, and duty-free import privileges for cars up to 1,500cc. Nonetheless, challenges remain, including disputes over parking privileges and the need for large upfront payments to access duty-free imports.

“What’s the point of a unique plate?” asked a frustrated vehicle owner.

The move toward electric vehicles remains particularly contentious among industry operators and experts.

Dereje Beyene serves as a board member of the Ethiopian Transport Employers’ Federation (ETEF), an umbrella organisation representing associations and cargo truck and bus owners.

“The market is not profitable anymore,” he told Fortune. “Rising fees, fuel costs, and carbon standards are squeesing operators.”

Abiy Alene, a transport expert and lecturer at Kotebe Metropolitan University, described the shift as “politically motivated and poorly planned.” He argued that without adequate insurance and service infrastructure, the transition to electric vehicles is impractical, particularly as Ethiopia is a minor contributor to global carbon emissions.

“Citizens should have the freedom of vehicle choice,” he said, noting that EVs generally last 15 years, while older vehicles can serve up to 50 years.

Abiy also criticised the current carbon laws, which are based on vehicle models and years rather than emissions tests.

“It should be test-based,” he insisted, advocating for a fair plate fee and incentives for all new vehicles, not only electric ones. “Globally, EVs are affordable, and duty-free imports for fuel vehicles could further encourage adoption.”

Lawyers Threaten Legal Action Over Controversial VAT Registration

Posted on October 12, 2025October 12, 2025 by Digital Editor

A simmering dispute between the legal profession and the federal government is nearing a breaking point, as the Federal Bar Association, a 500-strong organisation, signalled its intent to sue the Ministry of Finance over a controversial directive that expands VAT obligations for lawyers, regardless of income level.

The decision was made during a general assembly, held last week at the Inter Luxury Hotel, on Guinea Conakry Road, marked by rare unanimity and fiery speeches, with hundreds of legal professionals decrying what they see as a fiscal overreach and regulatory mischaracterisation of their profession.

A directive issued in July 2025 mandates VAT registration for all professionals, including those earning below the two-million-Birr threshold historically used to determine eligibility. This effectively reverses previous practice and imposes a host of compliance obligations, from regular VAT filings to the hiring of accountants and auditors, on legal practitioners already wrestling with thin margins and administrative strain.

The Bar Association has formed an 11-member committee to handle the VAT dispute and other tax concerns. The group is tasked with pursuing discussion, but, if necessary, preparing for legal action. The Association’s leaders want to challenge a rule that requires lawyers and other professionals to register for value-added tax (VAT) regardless of whether their annual earnings exceed the two-million-Birr threshold set by law.

Getachew Tadesse, a participant at the general assembly, warned that the directive would disproportionately harm law practices and entry-level professionals.

“Many of us earn less than two million Birr a year,” he said. “If we’re forced to keep detailed books, hire accountants, and employ auditors, our costs will rise above what we earn.”

According to Getachew, an earlier amendment to the Income Tax Proclamation had already eroded margins.

“The new rule only makes an already difficult situation worse,” he said.

Many in attendance voiced concerns about what they called “bureaucratic overreach,” arguing that the measure undermines the legal profession’s autonomy. Frustration was evident as delegates recounted mounting difficulties with tax compliance, an administrative headache, they say, that has only intensified with recent tax reforms. The Association’s members resolved to pursue further dialogue with authorities but made clear that, absent an administrative solution, legal action would follow.

“We’re keeping the door open for dialogue,” one leader said after the meeting, “but our members are prepared to defend the profession’s integrity in court.”

Among the most vocal critics was Meseret Ayalew, a veteran lawyer and long-time Bar member, who insisted the Ministry’s directive mischaracterises the work of lawyers.

“The legal profession serves the justice system,” he said. “It isn’t a profit-making business. VAT is a tax on the value added. Lawyers provide direct services to clients. There is no supply chain or incremental production.”

According to Meseret, under the Commercial Code, only merchants engaged in trade are considered business operators, a category that excludes lawyers.

“The directive stretches the definition of commercial activity beyond legal boundaries,” she said

She urged the Bar Association to take the fight to both the ministries of Finance and Revenue.

“If necessary, to court,” she said.

Meseret’s worries resonated with many at the general assembly, especially younger and less established lawyers. Lawyers, such as Daniel Fekadu, a seasoned practitioner, raised more fundamental questions about the Ministry’s legal authority to impose the new rules. He argued that the directive directly contradicts the VAT Proclamation, which states that only those earning more than two million Birr a year are required to register.

“This directive goes beyond that limit and violates the principle of legal hierarchy,” he said.

Daniel also criticised the process, where the Ministry failed to publish the draft directive and invite public comment, as required by law.

“Government bodies must seek input before approving such regulations,” he said. “By excluding the very professionals it regulates, the Ministry has weakened the legitimacy of the rule.”

Tensions between the lawyers and tax authorities are not new. Bar Association president Tewodros Getachew recalled that the dispute an in three years ago, when legal practitioners were first required to keep accounting records.

“When the Income Tax Proclamation was amended, Category ‘C’ taxpayers were removed, and all professionals were compelled to keep books,” he said. “From that moment, lawyers have argued that they are service providers, not traders.”

According to Tewodros, earlier discussions with the Ministry yielded a promise that a separate directive would be drafted to address issues unique to legal practitioners, such as treating pro bono work as deductible.

“We’re told a new directive was being prepared,” he said. “But instead, the Ministry issued a sweeping VAT rule without any consultation. It is deeply frustrating and undermines the trust between the profession and the authorities.’

Repeated efforts to obtain an official comment from the Ministry of Finance proved unsuccessful. However, an advisor to the Ministry, speaking on condition of anonymity, defended the directive, calling it a practical solution to close a regulatory loophole left by the elimination of the turnover tax.

“The amendment to the Income Tax Proclamation left a gap,” the advisor said. “The directive ensures all professionals operate under a consistent tax framework.”

The advisor rejected claims that the Ministry exceeded its mandate, citing the VAT Proclamation’s provision for interpretation under the Tax Administration Proclamation.

“The Ministry of Finance sets the rules, while the Ministry of Revenue implements,” the advisor told Fortune. “That is clearly established by law.”

The advisor argued that VAT registration could, in time, prove advantageous to lawyers as many large organisations, embassies, and foreign clients require VAT receipts. The advisor insisted that registration enhances credibility and opens professional opportunities, arguing the measure was about fairness.

“Income level alone should not determine compliance,” the advisor said. “Everyone providing professional services must play by the same rules.”

Support for the directive’s underlying logic came from tax consultant Dawit Kejela, a former Ministry of Revenue official, who recognised its intent but also acknowledged its flaws. He recognised the compliance burden on small law firms, which compels them to keep accounts, hire auditors, and file periodic VAT returns, as an expensive process.

“When the turnover tax was removed, those previously under it needed a new mechanism,” he told Fortune. “The VAT directive fills that gap and provides administrative continuity.”

However, Dawit conceded that the implementation was lacking.

“The Ministry should have sought public input and taken time to explain the implications,” he said. “That omission has caused unnecessary backlash.”

Despite these misgivings, Dawit maintained that the directive rests on solid legal ground. The VAT Proclamation mandates the Ministry of Finance to issue directives. According to him, extending VAT registration to those earning less than two million Birr is consistent, given that the turnover tax no longer exists.

“Even if they are not merchants, professionals still earn income, and that makes them part of the system,” Dawit told Fortune. “The conversation should now move from confrontation to clarity. Lawyers should press for a specific accounting directive for their profession rather than contesting the Ministry’s authority.”

Storm in the Valley Leaves Flower Exporters Face a Multimillion-Dollar Blow

Posted on October 12, 2025October 12, 2025 by Digital Editor

A violent storm that ripped through the flower belt of Bishoftu (Debreziet), 45Km east of the capital, in early August has left the lucrative horticulture export sector reeling, with damages estimated to exceed 100 million dollars in potential lost revenue this fiscal year.

The storm, marked by heavy rain, strong winds, and hail, ravaged greenhouses, obliterated crops, and paralysed operations across several farms clustered in the town, a hub for the country’s floriculture industry. Federal agriculture officials and industry operators warn that, unless urgent remedial measures are taken, Ethiopia risks not only losing a considerable portion of its annual foreign exchange earnings but also its hard-won place in international flower markets.

The four-hour deluge on August 6, 2025, wreaked havoc on a tightly-knit cluster of 10 farms, eight of which are dedicated to floriculture. Of the 252.6hct under cultivation in the area, nearly 100hct, almost 40pc, were rendered unproductive.

“Everything we built over a decade was gone overnight,” said Meskerem Abebe, farm manager, at Bishoftu Horticulture Cluster.

The Ministry of Agriculture has since spearheaded damage assessments, with State Minister Sofia Kassa (PhD) visiting Bishoftu. Following her visit, a technical team was formed to conduct a full assessment.

“To support them, we first needed to understand the scale of the damage,” said Mekonnen Solomon, horticulture export coordinator at the Ministry.

He urged the Ministry of Finance to grant duty-free import privileges to help affected farms access fixed assets, raw materials, and capital goods necessary for recovery. The urgency comes from more than financial loss. The fallout, experts warn, stretches well beyond the perimeters of the damaged greenhouses.

“We aren’t merely talking about greenhouse frames and lost plants,” Mekonnen told Fortune. “We’re talking about companies losing international buyers, staff losing jobs, and Ethiopia losing credibility.”

Mekonnen estimated the damage could cost the sector 102 million dollars in export earnings for the 2025/26 fiscal year, 15pc of the horticulture sector’s expected foreign revenue. Recovery timelines range from five to 12 months, depending on the speed of reconstruction and access to duty-free imports. More worrying, however, is the sector’s exposure to long-term reputational risk.

“Delays can invite pests and diseases, tarnish the quality of exports, and ultimately reduce demand,” Mekonnen said.

This is especially precarious as major flower buyers from Ethiopia, the Netherlands, Saudi Arabia, the UK, and the US, are known for stringent quality requirements. Among the hardest-hit is Joytech Plc, a flagship flower exporter. It lost 15hct of crop, a one-hectare greenhouse structure, and a state-of-the-art 1,400-Sqm tissue culture lab. Total damages are pegged at 115 million Br. The company is rebuilding, but the clock is ticking.

Its CEO, Bisrat Haileselassie, likened the storm to a tornado.

“It wasn’t only flooding,” he told Fortune. “It was a direct hit. Without duty-free access to critical materials, recovery is not sustainable.”

Vegpro Flower Farm Plc, another major operator, reported equally staggering damage. Over 95pc of its 26hct farm is gone. With two million dollars in capital goods lost and 600 workers currently idle, the farm has suspended production. Company managers fear the cost of recovery could double if duty-free permissions are delayed.

“We’ve submitted everything to the Ministry of Finance,” said Mahendra Patel, its manager. “But time is not on our side.”

The Ministry of Agriculture has formally requested that the Ministry of Finance not only grant duty-free import status but also extend the voucher periods for raw materials already imported. In a bid to prioritise the sector, it also urged federal and city authorities to fast-track administrative services for affected firms.

However, despite sympathetic overtures, no formal decision has been made. Industry observers, including Yohanes Abebe, an advisor to the Ethiopian Horticulture Producer Exporters Association, warn that indecision has a cost.

“These farms built their market relationships over the years,” he told Fortune. “Without immediate support, they could lose everything.”

Dawit Kejela, a tax policy expert, supports the call for exemptions.

“This wasn’t mismanagement but an act of nature,” he said, proposing a value-based exemption scaled to the property destroyed. “The government must respond accordingly.”

The broader implications of the disaster also revealed an urgent need for climate resilience planning. Mamo Kassegn, a hydrometeorologist at Addis Abeba University, pointed to the Eastern Rift Valley’s exposure to strong seasonal winds, such as the Somali Low-Level Jet, a phenomenon not fully accounted for in current farm designs.

“There is no perfect defence against these forces,” Mamo said.

But he was quick to criticise the Ethiopian Meteorological Institute for failing to issue early warnings.

“This could have been mitigated,” he said.

The domestic floriculture industry, comprising nearly 70 farms over 1,600hct, has grown into one of the country’s top foreign exchange earners, following gold and coffee. It also supports tens of thousands of jobs, directly and indirectly.

For now, the flowers are not blooming in Bishoftu. The soil is waterlogged, the greenhouses are in tatters, and exporters are grasping at hope, expecting that help will arrive before the third-largest export earner wilts under the weight of bureaucratic inertia.

Etihad, Ethiopian Forge HighFlying Pact in a Battle for the Skies

Posted on October 12, 2025October 12, 2025 by Digital Editor

An evolving joint venture between Etihad Airways and Ethiopian Airlines is shaping up to be a force in Africa–Middle East aviation, with the potential to unlock over 400 million dollars in annual revenue for the Abu Dhabi-based carrier.

Launched earlier this year, the partnership has already laid the groundwork for deeper integration across passenger and cargo operations, with senior executives projecting rapid revenue scaling and strategic synergies.

“Combining the strengths of both carriers and their partners will unlock massive potential,” Jurriaan Stelder, Etihad’s senior vice president for Network & Alliances, said in an exclusive interview with Fortune.

He disclosed that Plans are underway to consolidate the two carriers’ freight divisions. Central to this ambition is Etihad’s relationship with SF Airlines, China’s largest cargo operator, which could channel goods from Asia and the Gulf into Africa through Addis Abeba.

Currently operating daily flights between Abu Dhabi and Addis Abeba, the alliance is targeting growth to multiple daily frequencies and larger aircraft. Revenues are projected to quickly surpass 100 million dollars, accelerating toward the fourfold mark as the joint venture expands its route network and geographic coverage.

“If we expand geographies, it can grow really fast to 200 million, 300 million, and 400 million,” Stelder said, stating the efficiency of a model designed to minimise costs while opening new markets.

Stelder likened the venture to transatlantic joint business models seen in North America and Europe, banking on its ability to deliver cost efficiency, expanded market access, and competitive pricing.

“This is not a partnership between two airlines,” said an Ethiopian executive. “It’s a partnership between two futures.”

The alliance is expected to position Etihad to deepen its presence in Africa, while Ethiopian Airlines gains a firmer foothold in Asia and India, regions Etihad dominates. While initial focus rests on passenger alignment, through integrated schedules, codeshares, and loyalty programs, cargo is emerging as the strategic frontier.

“Cargo is the next frontier,” said Stelder, citing Ethiopia’s need for high-capacity and cost-efficient logistics.

However, both sides are moving forward with plans to integrate their cargo networks, especially as Etihad’s relationship with SF Airlines is expected to accelerate shipments from Dubai, China, and other key markets into Africa via Addis Abeba.

“We’re taking the first steps there,” Stelder said. “It’s not defined yet, but there are lots of opportunities between the UAE and Ethiopia, or Asia and Africa at large.”

The plan is not only to move perishables and pharmaceuticals more efficiently, but also e-commerce cargo, which could help support Africa’s growing trade needs. With Ethiopian Airlines covering 40 countries and 60 cities as Africa’s biggest carrier, and Addis Abeba becoming an essential hub for Etihad’s network into India, China, Japan, and Vietnam, the combination promises to increase capacity and boost connectivity across the corridor. Etihad’s contribution is believed to be its higher-end service standards and global market reach, which could enhance the passenger experience.

Stelder made a point of capitalising on Etihad’s international reputation for service, its multinational cabin crew representing more than 100 nationalities, and the Airline’s ongoing investments in upgraded aircraft and cabins. He said the partnership is about both sides learning from one another.

“Ethiopian knows Africa better than anyone,” he told Fortune. “We’re keen to learn from them how to serve African customers and embrace the continent’s diversity. We hope they’ll learn from us, too.”

What makes the tie-up stand out is its status as the first deep joint venture between airlines from the Middle East and Africa. Only a year since its launch, executives on both sides say the relationship is solid and built to last, benefiting both airlines, their customers, and the economies they serve.

Chargé d’Affaires of the United Arab Emirates (UAE), Hamad Al Badawi, described the route as a milestone in relations between the UAE and Ethiopia, pointing to “mutual respect, collaboration, and a shared aspiration for progress.” He believes that the daily flight boosts economic ties and supports trade and investment between the two regional centres, positioning the airline partnership as a catalyst for even deeper engagement between the countries.

According to Antonoaldo Neves, Group CEO of Etihad Aviation Group, the joint venture began with a visit to Ethiopian’s headquarters a year ago, during which he was impressed by the Airline’s tight operational controls. The deal went from concept to launch in six months, a process that usually takes up to three years, and includes joint training programs to upgrade staff skills and operational standards.

“Few countries operate across four continents like Ethiopian does,” Neves said.

The daily service now offers connections for business, leisure, and diplomatic travellers.

According to Mesfin Tassew, Ethiopian Airlines Group CEO, the focus is on improving the passenger experience and expanding the network.

“This partnership delivers greater value than either of us could achieve alone,” he said.

Mesfin cited synchronised flight schedules, integrated loyalty programs, and Addis Abeba’s key role as Africa’s diplomatic hub. He also noted Abu Dhabi’s status as a business centre, predicting more tourism and trade between the markets.

Both airlines are coming off strong years in 2024. Etihad, based in Abu Dhabi, reported revenue of 6.9 billion dollars for the year ending December 2024, with profit after tax of 476 million dollars. The carrier saw passenger numbers rise by 32pc to 18.5 million, and cargo revenue jumped by 24pc to 1.1 billion dollars, helped by an 87pc load factor and a growing fleet.

Ethiopian Airlines, which closes its fiscal year in July, posted total revenue of 7.6 billion dollars, up by eight percent from the previous year. The Airline carried 19.1 million passengers and 785,000tns of cargo across 135 destinations, adding six new routes and 13 additional planes to its network. Ethiopian forecasts revenue of eight billion dollars by June 2025, an increase of more than 14pc from the last year. Mesfin disclosed that the long-term goal is to reach 25 billion dollars by 2035, with 209 international and 31 domestic destinations, a fleet of 271 aircraft, and 67.2 million passengers annually. Plans include replacing older jets, training 300 new pilots each year, and moving to a new airport by 2029.

Aviation analyst Yonatan Menkir Kassa called the joint venture a case of “strategic complementarity.” According to him, Ethiopian offers wide reach and reliability in Africa, while Etihad adds premium infrastructure and market strength in Asia and the Middle East, forming a corridor linking Addis Abeba and Abu Dhabi to world markets. The venture already merges schedules, fares, and cargo operations, making it easier for travellers to connect, check bags through, and earn frequent-flyer miles.

Yonatan believes the partnership’s impact on cargo is especially meaningful, with Ethiopian Cargo & Logistics Services and Etihad Cargo working together to build a high-capacity bridge for perishables, crucial for Africa’s trade. He cautioned, however, that blending Ethiopia’s state-owned airline model with Etihad’s profit-driven approach requires careful management. Running two major hubs means avoiding duplicate routes, and keeping IT systems, loyalty programs, and cybersecurity investments up to date.

“Geopolitical risks in the Middle East and Horn of Africa are also a concern, although the current political relationship between Ethiopia and the UAE provides stability,” he said.

Yonnatan sees the real transformation is in market access. Ethiopian can now expand into Asia and Australia, while Etihad gains direct access to Africa’s aviation market, which the International Air Transport Association (IATA) expects to double in size over the next two decades. Yonatan described the partnership as a kind of aviation diplomacy, helping to drive economic integration across continents.

Wegagen Capital’s Debut-Year Loss Masks Strategic Foundations

Posted on October 12, 2025October 13, 2025 by Digital Editor

Wegagen Capital Investment Bank (WCIB), the pioneering private investment firm to enter the nascent capital market, has posted a net loss in its first year of operations. However, beneath the surface of red ink lies a deliberate strategy, signalling a cautious but resolute bet on long-term market growth.

Early traction was evident with 15 proposals, six signed contracts, and 37 investment accounts opened. The firm’s investment in human capital (34 employees, all with CISI training) complements a documented governance structure that includes an internal audit manual, board oversight, and clear management roles.

However, WCIB closed its first year in business with a net loss of 10.18 million Br, but executives and market analysts argue the young firm is positioned on promising ground.

The firm’s Board Chairperson, Aklilu Wubet (PhD), also president of Wegagen Bank, its primary shareholder, downplayed the loss, framing it as an “investment cost” rather than a setback. The reported loss was 4.22 million Br, lower than projected, and was further softened by a 4.21 million Br tax credit under IFRS adjustments. These figures demonstrated WCIB’s accounting discipline and its deliberate positioning for future compliance with global standards, according to the firm’s Chief Risk & Compliance Officer, Debes Tukue.

He attributed the result to deferred startup costs and international alignment.

“These adjustments optimise our position while aligning with international benchmarks,” he told Fortune.

The income side of the ledger reveals the typical struggles of a financial startup. From March to June 2025, WCIB generated nearly eight million Birr in revenue from advisory and trading services. However, expenses during the same period exceeded 22 million Br, producing an operating shortfall of over 14 million Br. For the full year, service charges made up the bulk of income at 7.7 million Br, while brokerage commissions registered a meagre 600 Br. Most of the loss came from spending required to launch operations and comply with regulatory mandates.

Attributing his assertions to a Deloitte study, Aklilu told shareholders the investment firm is not expected to turn a profit for the next three years, but he promised to move into the black ahead of schedule.

“We’re not merely establishing an investment bank,” he told shareholders of Wegagen Bank who met at the Addis Abeba Hilton, on Menelik II Avenue, last week. “We’re helping to shape a transparent, inclusive, and forward-looking financial market that will serve generations to come.”

However, Aklilu’s optimism did not fully ease shareholder concerns. A group of Wegagen Bank shareholders voiced dissatisfaction and urged the Board to reconsider its approach.

“We can profit just by dealing in Wegagen Bank shares through the investment bank,” Aklilu said during the meeting, a comment that underlined anxiety about the risks and the pace of returns.

However, executives are undeterred. WCIB is staking its future on the expansion of the capital market, a market projected to grow from 537 billion Br to more than 959 billion Br by 2028. In parallel, the rapid rise of green finance is reshaping the financial sector, with more than half a billion Birr mobilised for climate-related investment in 2024 alone. These broad trends, executives urge, will create opportunities for the investment firm to thrive.

Some shareholders see the evolving regulatory environment as an opportunity.

According to Kiros Jirane, CEO of Africa Insurance and a WCIB shareholder, the investment firm is well placed to benefit from the Ethiopian Capital Market Authority (ECMA) rules, especially a deadline for share registration that is forcing companies to seek out advisory and listing services.

“We expect WCIB to seize the opportunity,” Kiros told Fortune.

After raising additional capital, preparing for initial public offerings (IPOs), and preparing for share listings, Kiros remains hopeful that WCIB will become profitable.

“We’re planning to contribute to the paid-up capital raise based on proportion,” he said.

Not all observers are alarmed. Tewodros Endale, a consultant with two decades of experience in African markets and a principal at MATED Consulting & Training Plc, believes the balance sheet shows resilience.

“Early deficits are par for the course,” he said. “To break even, WCIB must double or triple its revenue.”

Liquid assets were 341 million Br, making up 88pc of total assets, which were close to 388 million Br. Fixed assets accounted for 26 million Br, about seven percent, and other holdings were 20 million Br, roughly five percent. Equity was substantial at 374.8 million Br, constituting 97pc of the asset base, while liabilities remained low under 13 million Br, comprising a mere three percent. This produced a liquidity ratio of 88pc, more than twice the ECMA’s minimum requirement of 40pc. WCIB’s capital adequacy ratio also neared 97pc, reinforcing its financial strength.

According to Debes, the high liquidity is a deliberate choice at the founding stage, with much of the cash in fixed-time deposit accounts at competitive rates to safeguard value and maintain flexibility.

“We’re focusing on operational readiness, employee training, system integration, and regulatory compliance before setting internal quantitative thresholds,” he told Fortune. “The firm is using its strong liquidity position to invest in the systems and people it will need as it prepares to offer more diversified services, such as underwriting and wealth management.”

However, the expense ratio told a tougher story. At 281pc, the ratio revealed the heavy drag of outflows, especially in the early months. Yet, Tewodros estimated that with monthly outflows averaging 5.5 million Br, the firm has a cash runway of 61 months, ample time to adjust and capitalise on opportunities. WCIB submitted 15 advisory proposals by year’s end, securing six mandates, a conversion rate executives described as “promising.”

The ECMA’s latest mandates for public company registration have also accelerated the dematerialisation of shares, fueling hopes that WCIB can break even this year, ahead of the initial second-year projection. To get there, according to Tewodros, management under Brutawit Dawit, should move quickly to convert mandates into revenue, get at least two initial public offerings to market, and rein in costs by pausing non-essential hiring and monitoring cash flow closely. He urged shifting 40pc to 50pc of liquidity into short-term Treasury Bills (T-bills) for better returns and reconciling different loss figures in financial disclosures.

Analysts observed that 88pc of the liquid assets were held in time deposits, but interest income was low at 279,000 Br. Service charges accounted for most of the income, while brokerage commissions remain negligible.

Technology remains a work in progress, as WCIB’s IT infrastructure currently relies on a co-located system and leased back-office services for brokerage operations. Debes outlined a roadmap for building a proprietary brokerage system and establishing a dedicated data centre, with feasibility studies and vendor selection already underway. According to him, the goal is to create infrastructure that scales with the market and meets evolving regulatory standards.

The National Bank of Ethiopia’s (NBE) directive regulating foreign exchange markets restricts foreign portfolio investment to ECMA-licensed markets, such as the Ethiopian Securities Exchange (ESX), keeping foreign capital at bay until eligibility and ownership rules are clarified. Even so, Tewodros described WCIB as financially steadfast, with enough liquidity and capital reserves to reach equilibrium within 12 to 15 months.

Nonetheless, the quality of earnings is a source of debate.

Satta Abraham, an independent analyst who was a chief of staff at Kazan Group, responsible for portfolio managment and strategic growth, argued that while WCIB’s liquidity position is robust, much of it is idle. He cautioned that it could erode from inflation, estimating a potential annual loss of 45 million Br at current rates. He called for a “loss control plan” to keep losses in check for the next 12 to 24 months, or until the firm reaches break-even.

Satta observed a “visible commercial banking mindset” in WCIB’s approach and said its annual report reads more like a conventional bank’s than an investment bank’s. Analysts called for greater transparency in segment profitability, particularly on income from advisory and brokerage activities. Related-party transactions, apart from rent, received little disclosure. WCIB depended heavily on Wegagen Bank for technological equipment, a reliance that Satta and others believe requires more detailed reporting.

The analyst recommended WCIB to differentiate its brand and raise its public profile, not only through advertising but by empowering its analysts and deal leads to become public voices.

“Infuse the brand with intellectual capital and bold insight,” Satta said, pointing to high-quality content, whitepapers, infographics, and webinars as ways to build market credibility.

Birr Drift Exposes Cracks in Managed Market

Posted on October 12, 2025October 12, 2025 by Digital Editor

The Brewed Buck slipped again last week, exposing the quiet tension between official oversight and the underlying market forces that have shaped the foreign exchange scene for months.

Between October 6 and 11, 2025, commercial bank postings showed the average cash buying rate creeping upward by about 1.5 Br (1.05pc), ending the week at 143.5 Br to the dollar. Selling rates followed closely, reaching 146.3 Br.

While the movement appeared modest on the surface, it revealed widening cracks beneath, the kind of heavily managed forex regime cannot paper over indefinitely.

The most telling signals came from the top-tier private banks.

The Bank of Abyssinia (BoA) ended the week with the highest posted buying rate in the market, at 147.55 Br to the dollar, mere a hair under the Central Bank’s 147.71 Br rate. That quote stood nearly six Birr above Awash Bank’s and marked a dramatic rise from Abyssinia’s Monday rate of 142 Br. The move signals a break from the former alignment among the top private lenders.

The other members of the “Big Five” moved more cautiously.

Dashen closed at 143.55 Br, Zemen at 141.99 Br, and Wegagen at 142.97 Br, rates effectively in line with the week’s industrial midpoint. Oromia Bank, previously among the most aggressive dollar bidders through much of July to September, posted 144.88 Br, barely changed from the week before and trailing the Central Bank’s reference rate by nearly three Birr.

The spread between the week’s highest and lowest posted rates widened beyond eight Birr, a notable divergence, considering the Central Bank’s prescribed two-percent corridor between buying and selling rates. That divergence reveals the uneven pressures across the industry, such as imported inflation, maturing external debt, and dwindling foreign reserves.

Each day showed incremental movement. On Monday, the average posted buying rate began at 142 Br. Tuesday and Wednesday added slight gains to 142.5 Br. Thursday inched up again to 142.7 Br. But, Friday’s jump to 143.4 Br accounted for nearly half of the week’s entire depreciation, before the rate settled at 143.5 Br on Saturday.

Through it all, banks maintained the official two-percent spread, except, notably, the regulator.

The wide gap between the top and bottom quotes adds to a market already under strain. It raises fresh questions about whether the Central Bank can, or will, enforce its own corridor as dollar demand intensifies. A widening spread not only distorts price signals but also signals a weakening policy grip.

Even the state-run Commercial Bank of Ethiopia (CBE), typically a centrist force, showed signs of strain. Its posted buying rate rose by 0.75 Br to 140.89 Br, still near the 142.97 Br industry average. However, that figure underplays CBE’s true market posture.

CBE continued offering a 10 Br “top up” for remittances converted at the counter, a measure designed to steer hard currency into formal channels. The real payout for those transactions effectively sits closer to 150.9 Br, a shadow rate that blurs the line between published and actual prices.

Amhara Bank also flexed its position, finishing the week at 146.88 Br. The offer cemented its reputation for aggressive forex mobilisation, and brought it only behind Abyssinia Bank and the Central Bank in effective price setting.

By contrast, smaller third-generation banks, including Global Bank (139.42 Br), Cooperative Bank of Oromia (Coop Bank), and Siinqee Bank, made only token adjustments. Their lower rates showed tighter dollar obligations and conservative positioning rather than competition for forex market share.

The market now falls into three clear tiers.

At the top, Abyssinia and Amhara banks, as well as the Central Bank, lead with aggressive pricing, signalling either acute foreign currency needs or a desire to shape the market’s direction.

In the middle – Awash, Dashen, Wegagen, and Zemen – hover near the average, walking a line between caution and necessity. Below them sit the smaller lenders, some posting rates four or more Birr below the norm, revealing limited forex liabilities and a restrained appetite for foreign assets.

The Central Bank’s dual role, as both referee and market player, adds to the complexity. For a third straight week, it closed with the highest posted buying rate in the market. That position effectively sets the ceiling, pulling scarce dollars toward public-sector priorities like fuel imports, essential medicines, and debt service.

But by setting the price higher, the Central Bank reinforces the perception that a slow, controlled weakening of the Birr, the “managed glide”, is now the policy baseline.

The pressure beneath the surface is growing. The harvest season is approaching, raising demand for imported inputs. External debt negotiations remain unresolved, while foreign reserves remain low.

The modest weakening of the Brewed Buck last week may not signal calm. But, it may simply reflect volatility being kept in check by decree.

Bank of Abyssinia’s buying rate jumped 3.9pc in six days, nearly four times the industry average of 1.05pc. Amhara Bank climbed 1.3pc, staying close behind. Most smaller banks moved less than half a percent, sticking to a strategy of liquidity conservation and avoiding costly mismatches between their Birr obligations and dollar liabilities.

Awash Bank, still the largest in volume, appears content to stay near the midpoint, perhaps betting that its depositor base and correspondent banking relationships offer enough cushion.

In nominal terms, the Brewed Buck weakened by only about one percent last week, a pace well within the Central Bank’s tolerance band. But that headline average masks the real story. Bank of Abyssinia’s 147.55 Br rate, Amhara Bank’s 146.88 Br, and CBE’s effective 151 Br mean that those holding dollars can demand high premiums.

For anyone trying to buy dollars, the posted average may be misleading; actual costs are far higher.

Whether the Brewed Buck will continue its orderly descent remains an open question. As the spread between the top and bottom quotes stretches, arbitrage becomes more attractive. If several large banks were to match Abyssinia Bank’s rates simultaneously, the Central Bank’s two-percent rule could unravel quickly.

For now, the regulator appears committed to gradualism. Forex auctions remain infrequent, large spot movements are discouraged, and banks are still expected to stay within official corridors.

But last week’s developments offer a preview of what may come when pent-up demand finds a release valve. When even a single outlier bank breaks from the pack, it can reprice the entire market. If others follow, it may test not only the limits of the current corridor, but the credibility of the forex system itself.

AMG Holdings Breaks Ground on Industrial Rail Link to Ethio-Djibouti Railway

Posted on October 12, 2025October 12, 2025 by Digital Editor

AMG Holdings has launched construction on a 2.5-kilometer railway connecting its Sheger Industrial Park to the Ethio-Djibouti Railway’s Endode Station. The Ethiopian-led project comprises 1.7 Kms of main track and 800 meters of side rail.

Chief Project Manager Engineer Nigist Hailu said the line is expected to be completed within six months, facilitating the transport of raw materials and finished goods to Djibouti’s port. More than 100 local workers have already joined the project, with additional recruitment planned as construction progresses.

Engineer Daniel Hailemikael of Ethio-Djibouti Railway highlighted that the new link can accommodate trains with up to 53 wagons, enabling direct loading and unloading at the industrial park. Fully financed by AMG Holdings, the initiative is projected to cut the company’s annual logistics costs by up to 1.8 billion Br.

Acknowledging the challenging terrain, Daniel affirmed the team’s commitment to timely completion. He also urged increased local investment in rail material production to reduce import reliance and support the expansion of the country’s railway network.

Ethiopian Deposit Insurance Fund Achieves Full Q1 Collection Target

Posted on October 12, 2025October 12, 2025 by Digital Editor

The Ethiopian Deposit Insurance Fund collected 2.08 billion Br in the first quarter of 2025.

This meets 100 percent of the target and represents a 26.83 percent increase compared with the same period last year. The rise in premiums was attributed to higher deposits from member financial institutions.

To date, the fund has collected a total of 15.93 billion Br in premiums from member institutions, with 14.51 billion Br coming from regular deposits and 1.42 billion Br from interest-free deposits.

In terms of contributions, 7.97 billion Br was collected from private banks, 7.74 billion Br from the Commercial Bank of Ethiopia(CBE), and 186.62 million Br from microfinance institutions.

The total investment of the fund currently stands at 1.85 billion Br.

Climate Crisis Is Real. The Hysteria Is Not

Posted on October 12, 2025October 11, 2025 by Digital Editor

Over the past half-century, environmentalists have predicted countless calamities that did not occur. They have pitched draconian countermeasures that turned out to be mostly misguided. We should be grateful we did not follow their harmful advice. And we need to keep this history in mind as we are flooded with stories of climate Armageddon.

A few of the many sensible and life-improving environmental policies adopted in recent decades were sold by fearmongering. Rich countries have dramatically reduced air and water pollution through technological advances and, then, regulation. Poorer countries are starting to do the same thing as they emerge from poverty and can afford to be more environmentally concerned. Forests have expanded globally, most obviously in rich countries but also increasingly across the world, not the scary future environmentalists promised.

A recent peer-reviewed study counts almost a hundred doomsday predictions made by environmentalists over the past half-century. Two-thirds predicted doom before today. All turned out to be wrong.

The first well-known environmental scare was in the 1968 book “Population Bomb,” which warned that the world population was out of control and argued for widespread, forced sterilisation. Given the inevitability of hundreds of millions of hunger deaths, the book also argued we should halt food aid to basket-case countries like India. Thankfully, the world mostly ignored this misanthropic, amoral advice while the scientist-led Green Revolution led to much higher crop yields and the improved nourishment of a billion more people.

Today, India is the world’s leading rice exporter.

In 1972, “Limits to Growth” famously warned that food scarcity and pollution would cause global collapse. Time magazine predicted a future in which bands of gaunt survivors would desperately till the centre strips of freeways in what used to be Los Angeles. The world would run out of everything from aluminium and iron to oil and food.

This was the mood that shaped the world’s first UN Environmental Summit in 1972, when chairman Maurice Strong declared that the world had only 10 years left to avoid environmental catastrophe. As the first director of the UN Environment Program, he argued Doomsday was “very probable” unless we ended destructive economic growth. Thankfully, we did not heed his advice. Instead, persistent economic growth has enabled more than three billion people, 41pc of the world’s population, to escape extreme poverty.

Predictions that we would run out of resources have been astonishingly wrong. Instead of rationing its remaining resources, humanity chose innovation, which has allowed us to increase supply while lowering costs dramatically. In 1980, the world had just 30 years of oil left at that year’s consumption rates. Since then, we have used all the oil we thought was left and 80pc more, yet because of better technology, we now have about 50 years left at our new and much higher rate of annual consumption.

The simplistic and alarmist predictions of the 1970s set the tone for decades, however, and still echo in the climate alarmism that argues for expensive, inefficient policies by recycling many of the old scare stories about not enough food and ever more weather catastrophes.

Climate change is a real challenge, but, as before, its scariness is greatly exaggerated.

One of the most quoted meta-studies published in Nature magazine shows how exaggerated it is. Without climate change, the world would see 51pc more calories produced in 2050 than in 2010. But even with vastly worse climate change than is actually expected, food supply “only” increases by 49pc, a problem, yes, but not a calamity.

And despite widespread fearmongering about weather disasters, the hard data show that the death toll from floods, droughts, storms and wildfires has declined dramatically over the past century from half a million a year in the 1920s to fewer than 9,000 a year over the past decade, a 98pc reduction. Since 1990, global climate-related damages, measured in percent of GDP, as the UN correctly insists on, have been falling, not rising.

Yet, the fearmongers’ proposed solutions remain much the same as in past decades. Their urge is to repent and turn away from progress. Ivory-tower, rich-world academics advocate de-growth even though, for the vast majority of humans, it is the only escape route from grinding poverty.

Alarmist climate concerns have become enshrined in policy, with nearly every rich country now endorsing the goal of net-zero carbon emissions by 2050. The best academic estimates show that over this century, its costs outweigh its benefits by seven to one, with policies to achieve it costing an unaffordable 27 trillion dollars annually.

Climate economics tells us that the most effective and cost-efficient approach to climate change is to invest heavily in research and development for low-CO energy technologies. Innovation can produce technological breakthroughs that eventually make green energy more affordable than fossil fuels. Instead of only rich countries buying expensive green energy to feel virtuous, the whole world can eventually switch because green energy is cheaper.

Just as we should be grateful not to have followed the failed jeremiads of the past, today we need to recognise that resurrected climate doomsaying is not only mostly untrue but also utterly unhelpful.

Author: Digital Editor