FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

Fortune Logo

Author: Digital Editor

The Weight of the World

Posted on by Digital Editor

The film Straw did not just break a heart, it reached into something deeper, unsettling a primal fear that resides in every parent. As a mother, the thought of losing a child is not merely distressing, it is destabilizing. It lives beneath the surface of daily life, always waiting to emerge in moments of silence, in dreams, in sudden news.

This film dragged that fear into the open, with unflinching intensity. It was not just the grief that struck so deeply; it was the slow-motion unraveling of a woman stretched beyond what any person should be asked to endure. Fair warning: spoilers follow.

Janiyah, the protagonist, held on for her daughter, for hope, for meaning, for some semblance of balance in a world intent on knocking her off course. She clung to survival for her daughter, her anchor in a tumultuous sea. But even anchors can be torn loose. What struck hardest was not a single dramatic event, but the accumulation of quiet devastations: an impounded car, a sick child, an inflexible job, a paycheck locked behind a bureaucracy.

These were not explosions. They were slow leaks, invisible until the collapse became inevitable.

It is astonishing how the line between right and wrong begins to blur when survival is at stake. A person with a gentle heart can be driven to desperate acts when every safety net fails. Janiyah’s moral descent was not born of recklessness; it was born of exhaustion, of a system that offered no exits.

The movie captures that slow erosion with such precision that it leaves the viewer haunted. Misfortune does not arrive politely, it floods in. As with money: when abundance comes, it pours. But when scarcity strikes, it seems to draw out every bill, every demand, every sudden crisis.

What Straw lays bare is not just personal tragedy, it is the cruelty of indifference. Janiyah’s boss, convinced she was merely being irresponsible, enforced policy over compassion. And how often does that happen? When struggling people are met not with grace, but with suspicion. When structure overtakes empathy, even the most basic kindness, like releasing a paycheck in a moment of crisis, becomes an insurmountable hurdle.

And this is not limited to one city, one job, or even one country. Straw reminded viewers that even in wealthy nations, people are running on empty. Two or three jobs just to afford rent. Choosing between electricity and medicine. Watching the lights go out while working harder than ever.

The film exposed the slow violence of poverty with such honesty that it hurt. Watching it with children brought another layer entirely. Their innocent questions, “Why is the mommy crying?” “Why does she have a gun?”, cut deeper than any cinematic scene. The intention was not to share the film with them, but once it began, their eyes were glued, and somehow, life took over.

Perhaps the most frustrating moment was watching child protection services prepare to take Janiyah’s daughter. It is a troubling paradox. While child welfare systems are built to protect the vulnerable, they often operate on assumptions that border on dangerous. The idea that a state official can love or raise a child better than a struggling but devoted parent is a hubristic one.

Yes, abuse exists. But in the vast majority of cases, parents would walk into fire for their children. What right, then, does a system have to step in based on bureaucratic criteria alone?

In some countries, governments go as far as regulating when a child can get their ears pierced. In others, millions are spent on irreversible surgeries for children whose identities are still forming. And yet, those same institutions claim the authority to tell a parent how to raise a child.

It is a contradiction too stark to ignore. No one is denying that terrible parents exist. But they are not the rules, they are the outliers. Most families, in all their imperfection, offer more love than any formal institution can replicate. Foster care, for all its good intentions, is not a utopia.

Even biological parents struggle to treat their own children equally; favoritism, discipline, affection all vary. Expecting strangers to love foster children as their own is an ideal rarely achieved. While there are beautiful stories of compassion and rescue, they are not the norm. More often than not, foster care becomes a holding pattern, not a haven.

Straw delivered all these truths not with preachiness, but with pain. Real, unflinching, unbearable pain. It forced reflection, not just on the policies and systems that govern society, but on the judgments, people cast without understanding what someone might be carrying. It provoked a grief not limited to the screen, and tears that were not easily wiped away.

The movie’s power lies in its simplicity.

It asks no grand political questions, but it demands empathy. It reveals how even the smallest denial, of a paycheck, a favor, a break, can become the final straw. The one act that tips someone over the edge. Janiyah’s story is not unique, and that is what makes it so crushing. It is a portrait of thousands, perhaps millions, walking daily along a line far thinner than the world cares to admit.

KEGNA BEER POURS INTO COMPETITIVE MARKET

Posted on by Digital Editor

Kegna Beverages on Saturday, June 14, 2025, uncorked its first bottles of Kegna Beer, a domestically owned, five percent ABV lager brewed in the West Shewa Zone of Oromia Regional State, marking what regional officials hailed as a fresh chapter for the beverage market. The launch drew senior dignitaries, among them President Taye Asqesilase and Shimelis Abdisa, president of the Oromia Regional State, who was accompanied by Alebel Melaku (left), minister of Industry, and Neway Megersa, president of Siinqee Bank, who is also the board chairman of Kegna Beverage. They were joined by hundreds of residents in the company’s hometown of Ginchi, 80Km west of Addis Abeba.

Backed by more than 4,000 shareholders – individuals, cooperatives and companies – Kegna Beverages has spent 22 billion Br to build a state-of-the-art brewery on 110hct of land it acquired after its incorporation in 2017. The plant, fitted out with equipment from Germany’s Krones Group and steel frames supplied by Emirates Building Systems of Dubai Investments, is engineered to turn out more than three million hectoliters a year.

A Promise Signed, A Silence Kept

Posted on by Digital Editor

Mekdes Nebro remembers the moment silence crept into her life. Raised in Merhabete, a hill town in North Shewa of the Amhara Regional State, she imagined university as a bright step forward, crowded lecture rooms, busy cafes, and the chatter of ambition. By the time she reached Addis Abeba University (AAU) to study journalism, a nerve illness had destroyed all hearing in her left ear and much of it in her right.

Conversations became half-heard murmurs, lecturers’ jokes slipped by, and her confidence shrank. She tried to lip-read and kept her worry hidden.

“I wanted to appear healthy so my peers would not know,” she said. “It hurt me greatly.”

Strangers, impatient, would snap, “Are you deaf?” in the corridor. Mekdes believed the campus would bring help. It did not.

A part-time interpreter appeared on the timetable, but the support was unreliable.

“Even when the interpreter is present,” she said, “what is interpreted and what the teacher says do not always match.”

Important points vanished between the speaker and the sign. Marks fell.

“I studied as hard as any other student,” she recalled. “I know I could do better with the right support.”

Her struggle sits inside a wider and largely hidden picture. The World Health Organisation (WHO) estimates that 17.6pc of Ethiopians have a disability, though planners use 10pc to set budgets. Yet, disabled students account for only 0.1pc to 0.2pc of university enrolments, according to a 2015 study by Saint Mary University, about one student in every thousand.

Where Mekdes lives in partial silence, Zaibanos Assefa moves through darkness. She lost her sight at six, grew up in Meanz, in Northern Shoa of the Amhara Regional State, and arrived at AAU with the same hopes. She found no Braille books and no materials for writing in Braille. During exams, she relies on a volunteer reader-writer.

“We often have to beg fellow students for help,” she said.

Some lecturers ban recordings, worrying their material will be misused. Others set charts and diagrams that visually challenged candidates cannot see or skip.

“It’s frustrating,” she said. “You seek help as a disabled woman and face more barriers.”

Abayneh Gujo, head of the Federation of Ethiopian Associations of Persons with Disabilities is blunt. He sees a country that is not easily livable for people with disabilities. The Federation wants a ministry or commission to enforce access and to make Ethiopian Sign Language an official working tongue. Without strong oversight, Abayneh argues, universities can delay or dilute commitments at will.

On paper, protections sound generous. Ethiopia has ratified the United Nations Convention on the Rights of Persons with Disabilities, thereby making it domestic law. The Constitution guarantees equal access to social services and instructs the state to support citizens with disabilities. A higher-education law from 2009 directs universities to keep campuses “accessible and friendly to physically challenged students” and to provide tutorial support, extra exam time and assistive technology.

But good law is not the same as good practice, and lecture halls often tell a harsher story. Few dispute the scale of the challenge. Fewer still doubt that Ethiopia’s future depends on the talents now being sidelined.

Alemayehu Teklemariam (Prof.), heading AAU’s Center for Special Needs Support, accepts the criticism.

“These concerns are valid,” he said.

AAU lists 110 disabled students today, 36 of them hearing impaired; over the past 21 years, thousands have graduated, and the University itself has later hired some. Yet, only two full-time sign-language interpreters serve them.

“We’re working to train interpreters with academic backgrounds in relevant fields,” Alemayehu said.

He observed that outsiders who step in at short notice often struggle with the technical vocabulary used in science, health and law classes.

For students who are visually challenged, the University has pledged to buy and distribute Braille texts from its budget, install screen-reading software and run basic computer classes. However, purchasing, shipping, and licensing can take months. Delivery delays, Alemayehu conceded, remain a concern.

Money squeezes progress elsewhere. According to Ketema Bayilegh, who runs inclusive-education projects at the Ethiopian National Association of the Blind, a sheet of Braille paper now costs 11 Br even though the item is duty-free at customs. Transport and storage double the price, and the Association cannot subsidise supplies for every student who needs them.

The Ministry of Women & Social Affairs, which oversees disability policy, pledged that help is coming. Legislation is being drafted to guarantee inclusive schooling, employment, and public services. Sisay Tilahun, a senior official at the Ministry, confirmed that the government has “accepted the request” to promote sign language, and is “working closely with universities” on complaints. Dates and funding, however, are still to be announced.

Advocates fear promises will drift unless culture shifts. Fitsum Gebremichael, a lecturer in education planning, calls for urgency.

“It isn’t too much to ask,” he said. “Teachers claim it adds pressure. But we must ask: is education not meant to serve all?”

He believes training, tools, and strict monitoring should follow.

“This isn’t about privilege,” he said. “It’s about rights.”

Zaibanos embodies the gap between rhetoric and reality. She expected to graduate this year, but illness and two failed courses — both with grades of F — blocked her from taking the exit exam. Special resits, once offered to disabled students, have gone. The rules now treat everyone the same.

“Affirmative action applies to opportunity, not knowledge,” Alemayehu said.

Zaibanos plans to return next year, although she will have to pay for her food and lodging.

“It’s sad to seek help as a disabled woman and still face further challenges,” she said.

Her determination echoes Mekdes’s own. Last semester, Mekdes sat in the front row of a large lecture theatre and watched the interpreter’s signs drift out of sync with the lecturer’s voice. After class, she spent two hours copying notes from friends. She wondered how many possibilities had slipped away in those lost minutes, internships not applied for, discussions not joined, ideas half understood.

Even simple obstacles can hurt. Many buildings lack ramps; lifts fail or are never installed; corridor lights flicker; and printed handouts arrive at the last minute, giving blind and partially sighted students no time to run them through text-to-speech software. None of these shortcomings is costly on its own, advocates say, but together they erode learning day after day.

University managers blame stretched budgets, dated infrastructure and the rising price of imported equipment. Translators, Braille embossers and adaptive software cost more than a cash-strapped sector can easily spare, they argue, and donor funding has shifted to other priorities.

“We need the state to ring-fence funds,” one senior administrator, who asked not to be named, said. “Otherwise, each institution is left to improvise.”

For Mekdes and Zaibanos, the debate over budgets matters less than the small, daily details: a clear copy of an exam paper, lecture slides emailed in advance, corridors without sudden steps, a lab technician who knows how to guide a blind student past acid and flame. They say none of it would bankrupt a university; it would require will.

After class one afternoon, Mekdes stood while friends discussed a documentary screening. She caught fragments, smiled and pretended she had heard it all. Silence, she has learned, is more than the absence of sound; it is the space between a right promised and a right delivered. In that space, the disabled students still wait to be heard.

Fed Unleashes Record Budget as Spending Priorities Draw Fire

Posted on by Digital Editor

The federal government presented legislators with a budget proposal for the fiscal year 2025/26, marking an unprecedented shift in the country’s fiscal approach.

The budget bill totals 1.93 trillion Br, 14.3 billion dollars, based on last week’s Central Bank selling exchange rate. This represents nearly double the allocation from the previous fiscal year’s budget of roughly one trillion Birr.

Budget experts and economists say the sudden surge defies historical trends and signals structural shifts with implications for economic sustainability, efficiency, and policy direction.

In the four years leading up to the budget bill before Parliament, the federal budget had followed a stable trajectory, climbing from 562 billion Br in 2022/23 to 971 billion Br by 2024/25, displaying an annual growth rate of about 20.2pc. Historically, the growth was characterised by moderate increases in recurrent and capital expenditures, steady subsidies to regional states, and consistent allocations toward Sustainable Development Goals (SDGs).

However, the 2025/26 proposal departs sharply from this trend, featuring an almost 100pc jump in total federal expenditures year-on-year. The budget includes 1.2 trillion Br for recurrent expenses, 415 billion Br for capital expenditure, 315 billion Br for transfers to regional states, and an additional 14 billion Br to support regional states in achieving the SDGs.

Finance Minister Ahmed Shide told Parliament that about 73pc of the budget, approximately one trillion Birr, will be covered by domestic tax revenues. His administration expects another 236 billion Br from international development partners, while he views the remaining deficit as being financed through project-specific funding.

The Finance Minister stated that fiscal discipline would be maintained, vowing to avoid borrowing directly from the Central Bank and instead issuing treasury bills (T-bills) to manage the 2.2 per cent GDP fiscal deficit, targeting a net deficit of around one per cent.

Ahmed also reinforced the government’s commitment to macroeconomic reforms and its ambitious 10-year growth strategy, setting an 8.9pc economic growth target for the coming fiscal year, higher than the IMF’s 6.6pc forecast.

Despite these ambitious plans, federal lawmakers quickly raised concerns during parliamentary discussions.

However, budget analysts raise questions about the structural shift in budgeting.

The dramatic increase in recurrent spending, climbing from 162 billion Br in 2022/23 to 1.18 trillion Br proposed for 2025/26, revealed an unprecedented 162pc rise, pushing the recurrent-to-total budget ratio from 46.5pc to over 61pc. Such a tilt toward recurrent expenditure raises concerns about productivity and fiscal sustainability, suggesting a preference for consumption-heavy outlays over developmental investments.

Capital expenditures, while also increased by 21pc to 415 billion Br, saw their overall budget share shrink from 29pc to 21.5pc, signalling diluted focus on developmental projects. Subsidies to regional states increased nominally but fell proportionally, uncovering deprioritisation.

Some of the critical voices came from the ruling party itself.

Kefena Ifa, a member of the ruling Prosperity Party representing a constituency in the Oromia Regional State, criticised the capital expenditure allocation as insufficient, arguing for its importance in infrastructure development.

Another MP, Sosina Getahun, questioned whether allocated funds were exclusively meant for ongoing projects and specifically inquired about completion timelines for key infrastructure, raising the Chuarit-Alfea road project in Amhara Regional State, where construction had dragged on for three years without conclusion.

As federal lawmakers debate the ambitious budget bill, experts say the critical factor remains whether the government can effectively translate ambitious fiscal promises into tangible outcomes. Many see the fiscal realignment as marking an inflexion point, with the potential either to propel transformative growth or create long-lasting fiscal strain.

Experts echoed that the capital expenditure budget remains inadequate, given critical gaps in infrastructure such as electricity, roads, and clean water. These experts speculate whether this sudden increase represents a one-off adjustment or the beginning of a new structural fiscal pathway. If permanent, elevated recurrent obligations may constrain future budgets, raising issues around debt sustainability and inflation.

Mered Fikireyohannes, CEO of Pragma Capital, one of these experts, cautions that insufficient capital spending could stall essential mega-projects crucial for economic growth and societal advancement. According to Mered, public investment in infrastructure is vital, as it stimulates private sector activity and enhances government tax revenues.

“Low capital expenditure risks economic stagnation,” he told Fortune, “particularly troubling given Ethiopia’s rapidly growing population.”

Mered pointed out existing challenges even with recurrent expenses, noting that 486 billion Br allocated towards debt repayment indicated precarious financial management. He criticised the tax collection strategy, claiming that many businesses evade taxation.

Ministry of Finance figures showed that 63pc of the 3.2 million licensed businesses did not contribute to tax revenue, increasing the fiscal burden on compliant taxpayers. According to Mered, the authorities should integrate these businesses into the tax net, enhancing tax and customs collection, and stating the role of regional authorities in improving revenue mobilisation.

Atlaw Alemu (PhD), an economics lecturer at Addis Abeba University, raised concerns about the government’s plan to introduce new taxes, arguing such measures might excessively burden consumers. He warned of the adverse effects that new taxes could have on consumer behaviour, potentially leading to reduced consumption and subsequently diminished business revenues.

Atlaw, too, urge the authorities to focus instead on broadening the tax base and bringing currently untaxed entities into compliance.

According to the budget proposal, total government revenue for 2025/26 is projected at 1.51 trillion Birr, of which taxes represent approximately 73pc, marking a notable rise in the tax-to-GDP ratio to 5.7pc. Anticipated tax revenues are projected to show a major jump, at 129.4 billion Br, a 110pc increase from the previous year, underpinned by the implementation of various tax reforms.

These include the Minimum Alternative Tax (MAT), designed to ensure that companies pay a minimum amount of corporate tax, even if they benefit from various exemptions, deductions, and incentives that reduce their regular tax liability. An increase in withholding income tax is in the pipeline, alongside a modern stamp system excise tax, and the full application of a 15pc excise tax on oil and VAT on fuel.

Fiscal authorities also plan to introduce a Property Tax in selected urban centres, a Motor Vehicle Circulation Tax for commercial vehicles, and bolster overall tax administration through digital technology and strengthened audit processes. A National Tax Taskforce has been established to oversee and improve revenue collections and ensure accountability.

Implementation, however, remains uncertain given historical underperformance in budget execution. In past fiscal cycles, ambitious allocations frequently went unrealised due to procurement delays and capacity constraints.

In the fiscal year 2024/25, key sectors, such as Administration and General Services, realised 70pc of the approved funds, while Economic Affairs managed under 60pc of the allocated capital funds.

In contrast, sectors dominated by recurrent costs, such as Defence and Public Order, consistently utilised over 85pc of their budgets due to predictable salaries and operational expenses. The proposed budget bill continues this pattern, allocating 200 billion Br to defence and security, demonstrating rigidities in reallocating funds during economic fluctuations.

Justice and Legal Affairs, which faced underspending in past cycles, received a modest increase to 75 billion Br.

Notably, Economic Affairs anticipates a 20pc capital budget increase, which will facilitate digital tax system advancements and private-sector collaboration for sustained growth. However, experts like Yohannes Bekele, senior adviser at an international development organisation, warn that without improvements in procurement and project management, increased funding alone might exacerbate existing execution delays.

Regulatory bodies, such as the Federal Auditor General, which has historically been efficient with modest budgets, and the Capital Market Authority, receive slight increases, reflecting the government’s acknowledgement of the need for strengthened oversight.

The bill has been referred to the Budget & Finance Affairs Standing Committee, chaired by Desalegn Wedaje, for further review before it is voted on in Parliament.

Billions Unaccounted as Auditors Watch Recovery Rates Stall in Bureaucratic Quagmire

Posted on by Digital Editor

A three-year effort by the Audit Stakeholders Forum to restore fiscal discipline across federal institutions has yielded meagre returns. Despite broader coordination among oversight bodies, enforcement remains weak, with recovery rates stagnating below 15pc, exposing systemic failures in financial accountability.

In its first audit year, the Forum identified 6.8 billion Br in recoverable assets but recouped only 44 million Br, a mere 0.6pc. The subsequent year showed slight improvement, with 11pc recovered, and last year saw this figure inching up to only 14pc. The consistently low recovery rate remains a pressing concern for authorities, due to limitations in enforcement.

Strategic procurement decisions from 12 years ago continue to affect current financial management. An expenditure totalling 222 million Br, linked to those past choices, remains partially unresolved. Authorities managed to recover 130 million Br, leaving 92 million Br pending reapproval or reclamation, which is currently under review by the Ministry of Finance.

Beyond financial recovery, the Forum has escalated specific cases to criminal investigations, involving six institutions. The Immigration & Citizenship Service faces probing for alleged mismanagement totalling 1.2 million Br and an additional 1.9 million dollars. Aqaqi Basic Metals Industry is under investigation for discrepancies amounting to three million Birr. The Wollo Tertiary Care Medical & Teaching Hospital Project is being probed over 17 million Br, Wolayta Sodo University for 16.7 million Br, and the University of Gambella faces questions about 12.4 million Br in financial irregularities.

Comprising federal agencies such as the ministries of Justice, Planning and Development, and Education, as well as the Anti-Corruption Commission, the Procurement Authority, and the Federal General Auditors, the Forum has pushed for the imposition of administrative penalties. The Director General of the Ethiopian Public Service Support Agency, the President of the Ethiopian Police University, and the Director General of the Road Safety & Emergency Fund Service received formal written warnings. Each federal official involved paid a disciplinary fine of 10,000 Br.

Seven additional institutions, including three universities, the Ministry of Foreign Affairs, Immigration & Citizenship Services, and select civil society agencies, received reprimands due to similar audit findings. Financial literacy training was mandated for administrative officers from universities that were repeatedly cited for poor financial compliance.

Minister of Justice Hanna Arayaselassie disclosed that ongoing criminal investigations require further details from implicated institutions.

“These investigations would be complemented by civil cases in certain scenarios,” she told Parliament.

State Minister for Finance, Eyob Tekalegn (PhD), attributed a shift in policy, disclosing that future budget allocations will depend directly on each institution’s effectiveness in utilising previously allotted funds.

However, the Forum faces significant challenges in obtaining compliance from audited institutions. Tesfaya Daba, the state minister for Justice, voiced concern over the limited follow-up action, noting that of the 12 institutions directed to report their progress, only two responded.

The Ministry of Planning, responsible for integrating audit recommendations into institutional frameworks, has notably lagged in its contributions to the Forum’s work. Its representative, Tirumar Abate, acknowledged this shortcoming, vowing to fully integrate audit findings into their planning and budgeting process from the next fiscal year.

For Deputy General Auditor Abera Tadesse, concerns abound about the scope of compliance measures.

“Institutional compliance assessments often narrowly focus on financial recovery, neglecting equally crucial recommendations addressing organisational management and operational practices,” he said.

Federal lawmakers, including MPs Fatuma Ali and Zenaya Negash, echoed these concerns, voicing dissatisfaction with the persistently low recovery ratio. They called for stricter administrative actions to incentivise compliance and deter future financial misconduct.

Yeshimebet Demesa (PhD), chairwoman of the Standing Committee on Public Expenditure Administration & Control Affairs, noted a shortfall in clear communication about audit findings. She pressed for the restructuring of report methods, arguing that many government projects stall due to inadequate feasibility studies and insufficient environmental assessments.

“Parliament expects execution from the Ministry of Finance for internal auditors of institutions to be accountable for them,” she said.

In the latest 2023 audit report covering 124 federal agencies, the Forum identified 14 billion Br in receivables remaining uncollected. The Ministry of Health topped the list, accountable for an unrecovered six billion Br. Other major contributors include the ministries of Irrigation & Lowland Environment and Education, as well as the Federal Buildings Construction Project Office, St. Paul’s Hospital Millennium Medical College, Jijiga University, and the Ethiopian Agricultural Research Institute.

Tax collection also suffered notably, with the Ministry of Revenue failing to collect 225 million Br in corporate tax across nine branches. Another 14 million Br in various taxes, ranging from income tax, customs duties, VAT, withholding, and dividend taxes, remained outstanding. Customs authorities notably fell short, with a failure to collect 4.4 billion Br across 10 branches. Individuals owed 410 million Br from the complaint settlements against customs have yet to receive their money.

Procurement irregularities remain an ongoing issue. The audit documented 43 million Br worth of procurements lacking sufficient supporting evidence. No less than 73 federal institutions and 15 branches violated government procurement rules, incurring irregular spending totalling 2.5 billion Br. Twenty institutions overspent their allocated budgets by 1.3 billion Br from various internal and external income sources, while conversely, 101 institutions failed to utilise more than 10pc of their allocated capital budgets, leaving 19.2 billion Br idle.

Getnet Haile, a financial analyst and managing partner at Target Business Consultants Plc, observed that many developed countries empower internal auditors to operate independently from the institutions they oversee. According to him, this autonomy enhances transparency, strengthens compliance, and accelerates financial recovery.

Getnet attributed the persistently low compliance rates partly to lacklustre consequences for non-compliance.

“If there are no consequences, it also means an incentive for others,” he warned.

He blamed outdated financial directives affecting audit effectiveness. According to Getnet, these outdated regulations undermine applicability, yet institutions continue to be evaluated against these obsolete standards.

“The directives should evolve with the times and circumstances and remain up to date,” Getnet said.

Environmental Authorities Turn to Water Fees as Ecological Strains Deepen

Posted on by Digital Editor

Environmental authorities have signalled a shift toward regulatory intervention, introducing a usage-based payment system for water drawn from natural reservoirs such as Lake Zway.

The country’s ecosystems, broadly categorised into forest, wetland, mixed forest, mountainous, and grassland zones, have long been under strain from deforestation, urban encroachment, and unsustainable land use. However, it is the aquatic systems, such as lakes, rivers, and wetlands, that now appear to be under the most acute pressure. Invasive aquatic weeds, including water hyacinth, and unchecked siltation due to upstream erosion have impaired the ecological functions of these bodies, threatening biodiversity, fish stocks, and the livelihoods dependent on them.

The Environmental Protection Authority (EPA) has drafted a proclamation introducing a structured Payment for Ecosystem Services (PES) initiative, intended to address mounting environmental degradation and the growing vulnerability of aquatic ecosystems.

The initiative requires payments to be negotiated between buyers and sellers, facilitated by intermediaries under formal agreements. Fees will vary by geographical level, including international, national, catchment, and local areas, depending on the specific ecosystem involved.

Ecosystems are categorised into forest, wetland, mixed forest, mountainous, and grassland. Water bodies are identified as particularly vulnerable, with severe degradation noted due to invasive weeds and accelerated siltation. This concern has prompted the Authority to establish a specific payment system for water sourced from natural reservoirs, such as Lake Zway. Users, including commercial entities, informal users, and individuals, would be required to declare their annual water usage and make corresponding payments.

Wasihun Yimer, an EPA specialist on ecosystem service pricing, stated the urgency of implementing PES due to growing ecological pressures. Historically, ecosystem services have been used without financial compensation due to a lack of regulatory frameworks.

“Ecosystem services were used without compensation due to the lack of legal and regulatory frameworks,” Wasihun told Fortune.

According to him, the new proposal would not only ensure ecological sustainability but also create a revenue stream for the government and local population. Official assessments have already projected the potential revenue from major lakes, including Bishoftu, Hawassa, Chamo, Abyata, Zway, Tana, and Ashange. These assessments provide the basis for pricing benchmarks, seeking to regulate and incentivise sustainable practices.

Lake Zway, for example, is extensively tapped by more than 150 water tanker trucks and over 10,000 pumping systems, pressing for greater accountability.

“They’ll now be required to pay for what they extract,” said Wasihun.

Lake Tana faces similar pressures, with invasive weeds now covering over 84,000cm² of its surface area. The Ministry of Water & Energy plans to involve nearby institutions in stewardship roles, shifting away from previous unsuccessful interventions.

At Sabana Beach Resort, located by Lake Langano, the impact of proposed regulations is already evident. Previously dependent on lake water for irrigation and guest use, despite its high salinity, the resort has transitioned to government-supplied piped water for cooking and drinking purposes.

Duga Leta, the resort’s front desk manager, is concerned about the financial burden of this change, acknowledging the necessity of the PES scheme.

“Now, it will be difficult,” he said, noting additional costs could strain operations.

Yet, Duga recognised the scheme’s potential long-term conservation benefits, conceding, “There is no alternative. Payment is a must.”

At Liesak Resort by Lake Bishoftu, management already pays substantial fees to local authorities for maintaining the buffer zone.

Teklu Kondelo, Liesak’s finance manager, disclosed that the resort pays millions of Birr annually to the city.

“Another mandatory payment would further complicate business conditions,” he told Fortune.

Despite buffer zone regulations allowing property development within 50m of shorelines, Teklu described difficulties in maintaining profitability due to limited tourist traffic and the landlocked location of the resort. He called for transparency and consistent enforcement.

“The government and other bodies are the real beneficiaries,” he said.

According to Wasihun, voluntary participation remains central to the PES scheme. Payments would directly link buyers and sellers, ensuring that only those willing to compensate providers gain access to ecosystem services. Contracts would clearly outline responsibilities, geographic scope, and payment terms, including schedules and methods. Agreements would also include mechanisms for monitoring compliance and provisions for termination if obligations are not met.

The draft proclamation allows diverse payment structures. Single buyers can assume full costs, multiple buyers might pay for individual services, or bundled services could be offered. Financing arrangements for PES could be public, private, or hybrid. Public models involve government payments to ensure collective environmental benefits, while private models support direct buyer-seller transactions. Hybrid schemes blend public and private approaches.

Community-based institutions or newly established inclusive governance bodies would oversee these arrangements. Providers will be expected to report outcomes to buyers and the EPA, preventing unintended environmental harm.

The EPA would manage the PES system, including creating monitoring guidelines, maintaining a registry of agreements, and certifying intermediaries. These intermediaries will be required to assist in determining prices, negotiating access, and structuring payment agreements.

Despite the policy momentum, Semaw Asmare, an environmental consultant and PhD candidate at Addis Abeba University, insist that establishing a robust legal framework is merely a first step. According to him, the real challenge lies in implementing the PES model on the ground.

“It’s beneficial for a country to have a robust legal structure supported by law,” Semaw told Fortune.

Semaw urged the need to distinguish between ecosystem products and services to ensure fair valuations and payment mechanisms. He also noted that Ethiopia currently lacks sufficient institutional capacity, particularly technical expertise and human resources, to manage such complex initiatives effectively. Even developed countries encounter difficulties in implementing PES schemes due to complexities in cost determination.

“The biggest problem is determining the cost of the ecosystem,” he said. “You’ve got to know the price to pay for each.”

He pressed for extensive awareness campaigns, stakeholder consultations, and rigorous evidence-based research. Without these elements, he warned, the Authority might face difficulties in implementation. He also noted that existing environmental directives, particularly buffer zone protections around lakes and rivers, are already poorly enforced.

“Even the previously issued buffer zone rules are not being enforced,” he said, citing ongoing violations in resort and lodge construction near water bodies.

Rather than exclusively emphasising payments, Semaw advocated for stronger punitive measures against environmental degradation. Proper penalties for harmful actions such as forest destruction and water pollution would provide clearer deterrents, he suggested. Semaw raised concerns about how the PES system would accommodate traditional pastoralist communities, particularly in regions such as Afar, Somali, and Borana. These communities rely heavily on mobility rather than fixed land usage.

“For them, it isn’t about payment,” he said. “It’s about ensuring the continuity of the ecosystem. Otherwise, over-extraction will continue unchecked.”

Unilever Gains First-Mover Edge as Market Barriers Fall, Fears Rise

Posted on by Digital Editor

Unilever, the British-Dutch multinational, has become the first foreign company licensed to import finished goods directly into the country, following revisions to investment policies. Vaseline petroleum jelly and lotions, sourced from Unilever’s factories overseas, will soon arrive in the local market, marking a shift from the previous practice of importing goods only through third-party distributors.

The General Manager of Unilever Ethiopia, Nesibu Temesgen, confirmed that his company actively lobbied for the policy changes now allowing foreign firms to import and sell finished goods directly. Unilever Ethiopia distributes its products through 53 major distributors serving around 100,000 retail shops. With the introduction of this new directive by the Ethiopian Investment Commission, the company will also expand its sales through wholesale.

Deputy Commissioner Dagato Kumbe disclosed the government’s intention behind the policy shift.

“We believe the new directive will promote investment in the country,” he told Fortune.

According to Dagato, around 100 investors have already received licenses for import, export, wholesale, and retail activities since the directive was adopted.

Unilever’s imports will initially serve as a market test. Over the next three years, the company plans to study product scalability, consumer attitudes, and market acceptance. The research will inform decisions about potential domestic manufacturing. Nesibu stated that a product should generate at least 10 million euros in annual revenue to be considered for local production. Unilever has made its intent to steer clear of retail operations, preferring to focus on brand development and training local workers.

“Our partners have to benefit from the retail value chain,” Nesibu told Fortune.

An official from the Investment Commission, speaking anonymously, admitted that the previous directive had been overly restrictive, discouraging many potential investors. He insisted that a regulatory easing was necessary to attract foreign investment. Drawing parallels to Ethiopia’s experience with industrial parks, initially launched in 2008 but formally regulated two years later, the official argued that easing rules would similarly encourage investment in trade sectors.

The 2024 law, though more open than earlier versions, had still proved restrictive. Foreign investors previously faced stringent requirements. Exporters of raw coffee, for instance, were required to demonstrate at least 10 million dollars in annual procurement over the past three years and a commitment to export similar amounts in their permit year. Comparable restrictions applied to other products such as oilseeds, khat, pulses, and hides. Livestock exports had been an exception, allowing new entrants without prior procurement records if they provided detailed market analysis and purchase orders.

Further barriers existed for import and retail trade permits. Importers had to be manufacturers themselves or agents of manufacturers, or existing Ethiopian manufacturers exporting over 50pc of their output. Alternatively, they had to commit to importing at least 10 million dollars worth of goods annually. Retail investors were required to establish infrastructure, such as supermarkets or hypermarkets, with a substantial minimum floor area.

Under the new law, these barriers have largely disappeared. Foreign investors may now freely export previously restricted commodities like coffee, oilseeds, khat, pulses, hides and skins, forest products, and livestock, provided they submit due diligence reports affirming their financial integrity and absence of illicit connections. They can also participate in import trade (excluding fertiliser and petroleum) and wholesale markets previously reserved exclusively for domestic businesses.

Retail trade has also been opened to foreign investors, although specific financial conditions still apply. Foreign retail businesses should possess a minimum paid-up capital of 2.5 million dollars in cash and assets, validated by a professional valuation. On a case-by-case basis, the Commission may approve reputable single-brand retailers with less capital.

“We’re also the first foreign company to secure a license to export coffee from Ethiopia,” Nesibu revealed.

Unilever established its local presence as a manufacturer in 2014, producing 32 items, including well-known brands such as Lifebuoy, Omo, Knorr, Sunlight, and Signal, at its plant in the Eastern Industrial Zone near Modjo. The company employs around 7,000 people, and pays over two billion Birr annually in taxes.

Nesibu, appointed last April as the first Ethiopian CEO, aspires to triple Unilever’s annual sales in Ethiopia to 200 million euros within five years. His appointment follows a recent trend among multinational companies, including Coca-Cola Beverages Africa and Pepsi International, to appoint local leaders to spearhead growth.

Despite these bold objectives, product innovation has encountered obstacles. Unilever had set a target to generate 20pc to 30pc of its revenue from innovative products. However, two recent product introductions, Knorr Shiro and Sunlight Bar Soap, failed during local market testing. Sunlight bar soap was discontinued two months ago. According to Nesibu, the market had easy access to homemade bar soaps, and consumers primarily associated Sunlight’s brand with clothing and skincare rather than sanitation.

Knorr Shiro, a traditional dish repackaged for export, also faced challenges. Nesibu believes that because shiro is traditionally homemade, converting it into a branded product proved unprofitable. Export efforts faced further complications.

Tewodros Y. Bishaw, founder of TYB LLC, recounted receiving six tonnes of Knorr Shiro by air to the US, arranged through Unilever’s discounted pricing. However, the shipment was damaged at customs and had a shelf life of less than a year, which is inadequate for proper market distribution. The product expired before it could reach consumers effectively, forcing TYB LLC to recall stock across various US states.

Tewodros has since sought compensation for damages, logistical issues, and disposal costs. Unilever acknowledged errors and promised compensation. Nonetheless, Nesibu maintained that Unilever’s liability was limited. According to him, the shipment was initially intended for local markets and was indirectly sold to TYB LLC. Unilever agreed to refund only the initial purchase cost of approximately 3.5 million Br.

“We agreed out of goodwill, not out of responsibility,” Nesibu said.

Not everyone views these new developments positively.

Dawit Kejela, a tax consultant with 10 years’ experience at Ethiopia’s Ministry of Revenue, voiced concerns. He warned that the directive could threaten local businesses, particularly importers and retailers, allowing large multinational corporations to dominate the market, which could potentially lead to capital flight and weaken domestic production.

“Local businesses could be left struggling without adequate support or training,” Dawit warned.

He argued that the minimum investment threshold would primarily attract large foreign entities, effectively sidelining smaller local competitors. Dawit recommended implementing safeguards, such as a transfer pricing tax, to ensure the government captures a fair share of the profits of foreign companies. He argued that direct exports by foreign firms should be restricted, mandating value addition within Ethiopia to support local manufacturing.

“Without safeguards, the country risks becoming a dumping ground for foreign companies,” Dawit said.

Leikun Berhanu, Rising from Clerk to Financial Patriarch, Dies at 80

Posted on by Digital Editor

Behind a gate painted grey and black, an unassuming villa sits hushed near the Saris neighbourhood in the southern outskirts of Addis Abeba. On its veranda, two empty chairs stare out at a yard once alive with the noise of children and the measured voice of Leikun Berhanu, the banker who guided the financial sector for half a century.

Leikun’s rise tracked the country’s turbulent politics. In the early 1970s, as Emperor Haile Selassie’s reign faltered, he was employed by Addis Abeba Bank, a private bank in the pre-Derg period. Born in Gimbi, Oromia Regional State, in 1945, he graduated in managment from Haile Selassie University, now Addis Abeba University. The Bank where he started work was nationalised and merged with the Commercial Bank of Ethiopia (CBE); he was transferred there and eventually ascended to become its Chief Executive Officer (CEO).

Banking during a socialist command economy demanded obedience to party edicts, but it also required caution. Lend too freely and foreign currency evaporated; lend too little and factories idled. Colleagues recalled that he weighed every decision twice and preferred to under-promise. Such restraint enabled him to endure the years of revolutionary suspicion.

The storm intensified in 1991 when the Derg collapsed, the war ended, and the Ethiopian People’s Revolutionary Democratic Front (EPRDF) marched into Addis Abeba, promising markets and pluralism. The new rulers promptly appointed him the sixth Central Bank Governor. For four fraught years, he tried to reconcile inflationary spending, bare coffers and a Birr weakened by drought and conflict. He opted for incremental currency adjustments, tighter reserve targets and a fledgling inter-bank money market. These were small moves, yet daring in a country moving from rationing to relative openness.

The measures steadied prices and prepared the ground for financial-sector liberalisation during the mid-1990s.

That reform unleashed private banking. Later on, Awash International Bank (AIB), among the first entrants, lured him to its presidency. There he spent more than 14 years knitting together a branch network, nudging risk officers toward prudence, and persuading wary savers to trust a start-up institution.

Tsegaye Kemtsi, who ran Awash Insurance for 25 years, often shared coffee and counsel with him.

“He was knowledgeable and immensely personable,” Tsegaye recalled.

The partnership with Tsegaye proved fruitful. Together, they co-piloted the growth of the twin Awash firms, which became mainstays in the nascent private sector. For investors, Leikun’s presence was a comfort. He understood the ministerial accents of the Central Bank, yet could still speak the language of competition.

Success bred pride but not ostentation. The villa remained modest, the garden neat but ungilded. In the evenings, he sat outside, reading bank statements or the day’s papers while children raced across the lawn. Once in a while, someone produced a one-Birr note, bearing his signature from his years at the National Bank. He laughed that the relic was worth more at collectors’ auctions than in shops.

In November 2010, however, the mood changed. Awash Bank’s Board, acting on instructions from the Central Bank, ordered him to take forced leave after regulators alleged breaches of foreign-currency rules. The Bank, investigators claimed, had parked 28.9 million dollars, later revised to 25 million dollars, in reserve above legal limits between December 2009 and January 2010. The numbers were small by global standards but eye-watering in a country starved of dollars.

The success seemed to confirm the gospel of caution, until it did not. The episode shocked Addis Abeba’s financial district.

In November 2010, Awash Bank’s board told him to take forced annual leave after the Central Bank alleged breaches involving letters of credit and foreign currency rules. Investigators claimed the Bank had parked 28.9 million dollars, later revised to 25 million, above the legal ceiling in the brief window between December 2009 and January 2010. In a country where hard currency is treasure, the charge was dynamite.

The matter went to court. In August 2011, judges presiding at the Sixth Criminal Bench of the Federal First Instance Court at Arada found him and eight former Awash Bank executives guilty of mishandling foreign exchange. He was sentenced to one year and three months in prison and fined 10,000 Br, yet remained free on bail while appealing.

The conviction ended his formal leadership overnight and dimmed his standing among the very regulators he had once commanded. His special adviser, Mitiku Abeshu, was also swept into the dock. Critics argued that the scandal revealed the limits of private-sector discipline in a system that remained state-dominated. Admirers countered that the losses were trivial compared with the value he had added through decades of institution-building.

Neither side could deny the irony. A man feted for prudence felled by a breach of prudential regulation.

Leikun retreated to his veranda. Each morning, he read newspapers, sipping strong coffee; each afternoon, he welcomed old protégés who came seeking counsel or solace. The chair on which he sat now stands unused. Its carved arms are a silent reminder of the banker who once balanced ideological extremes with technocratic calm.

His methods were rarely flamboyant but always deliberate. At CBE, he modernised ledger systems without frightening party cadres. As Governor, he nudged ministries toward accepting treasury bills (T-bills) and cautioned against raiding compulsory reserves. At Awash Bank, he insisted that credit officers test clients’ cash flow projections three ways.

“Decisions taken behind a desk,” he warned juniors, “ripple far beyond four walls.”

The injunction survives him in staff manuals. Yet, he was never fully at ease with the rougher side of commerce. Those close to him say the 2010 furore stemmed from misplaced trust in subordinates, not personal greed. However, courts care little for motives. What remains is the record. His record stands as an unbroken ascent from imperial Ethiopia through Marxist rule to market liberalisation, followed by an unfortunate descent, and finally quiet redemption in family life.

Today, private banks show double-digit deposit growth, mobile-money platforms proliferate, and credit reaches towns once served only by travelling cashiers. None of this can be attributed to a single person, but many processes began during his tenure. His notes and memos from the early 1990s, preserved in the Central Bank’s archive, still guide trainees.

The assessment of his life is split between admiration and admonition. Supporters insist on the institutional structures he built: reserve ratios, open-market desks, and prudential guidelines drafted in nights lit by kerosene lamps. Detractors dwell on the foreign-exchange debacle and ask how a guardian of rules could misread them so badly. Both camps agree on his influence. Without his early reforms, the financial sector might have lurched from dirigisme straight into crony chaos. With them, the country gained a chance, still not fully taken, to marry growth with stability.

Measured in numbers, Leikun’s career spans four decades, three defining posts, and one conviction.

“He took the country with him,” his daughter, Ethiopia, said in grief.

She meant the weight of responsibility that never left his shoulders, even after the courts did.

It captured the feeling that a chapter had come to a close. The generation that bridged monarchy, socialism, and markets is passing, and the institutions it built now stand or fall on their own.

What would he have made of the current ferment, with digital wallets sprouting and policymakers reeling from the tremors of forex regime liberalisation?

He would probably have urged patience.

“Small steps,” he once muttered to a colleague after watching a minister unveil an ambitious scheme, “are harder to trip over.” Those small steps, accumulated over decades, helped Ethiopia build a banking system that moves billions of Birr each day. Whether it can keep its footing without him remains to be seen.

The veranda chairs await new occupants, perhaps grandchildren studying business administration or merely curious about a grandfather whose signature once travelled in every pocket. They may learn that integrity and pragmatism need not be enemies, that caution can be a virtue until it becomes a vice, and that even the steadiest banker cannot insure against the future. In a country where institutions are young and memories long, that is lesson enough.

Leikun died in May 2025; yet, few Ethiopian technocrats have left a more profound imprint on a crucial industry. He is survived by his wife, Selus, and eight children, 17 grandchildren, and a great-grandchild.

Behind Forex Stable Averages, Banks Signal a Coming Liquidity Crunch

Posted on by Digital Editor

The tightly managed currency market looked calm last week, yet beneath the surface, banks were jockeying for position in ways that unveiled deeper pressures ahead.

Over the six trading days beginning June 9, 2025, the Birr (Brewed Buck) slipped only marginally against the Dollar (Green Buck), holding to an average buying rate of 132.26 and an average selling rate of 134.66. However, these midpoint figures could disguise a widening rift between banks using divergent strategies to cope with scarce foreign exchange.

At one end of the spectrum was Oromia Bank, which kept its six-day average buying quote at 134.89 and its selling quote at 137.59. In a market where most lenders live by a uniform two percent spread, the Bank’s pricing adds an unmistakable premium.

The move revealed either a scramble for dollar deposits to shore up reserves or a calculated bid to lure exporters and remittance flows away from rivals. By paying in foreign currency, Oromia Bank was betting that the Birr would continue to weaken and that the extra margin would compensate for the cost.

Anchoring the opposite pole is the state-owned Commercial Bank of Ethiopia (CBE). With average quotes of 131.51 Br to buy and 134.13 Br to sell, CBE remains well below the industry mean, a position consistent with its dominant share in the interbank market. The Bank’s flat line throughout the week demonstrated a disciplined detachment from auction-driven fluctuations, reinforcing the sense that official guidance, not competitive zeal, sets its course.

Between these poles, the market was shifting. Dashen Bank and Bank of Abyssinia, both long counted among the market’s heavyweight price setters, edged toward the lower end on Saturday, June 14, posting buying rates under 132 Br. The rare alignment with newer fourth-generation lenders, such as Gadaa, Goh Betoch, Hijra, Siinqee, Tsedey, and ZamZam, disclosed a recalibration of risk appetite.

Whether the shift proves fleeting or structural remains to be seen, but it is an unmistakable sign that even legacy players feel the gravitational pull of tighter Birr liquidity.

The National Bank of Ethiopia (NBE), whose indicative rates serve as the market’s benchmark, exhibited the most volatility among all market players. It opened the week buying dollars at 134.42 Br, slipped to 134.13 by June 13, then steadied. On the selling side, the Central Bank lifted its quote to 134.91 Br midweek before easing to 134.66 Br.

Its spreads swung from 0.02pc on June 9 to 0.65pc on June 10, collapsed to zero by June 12, and rebounded to 0.40pc by week’s end. Market watchers saw these erratic moves signalling policy experimentation, as the authorities test how far they can guide prices without jolting inflation or upsetting the auction system now in place.

Ahadu Bank registered a more subtle shift. Its buying quote rose from 131.96 Br to 132.26 Br last week, while the selling quote jumped to 134.95 Br on June 12 and held there, nudging the spread to 2.03pc. The tweak appears to be a defensive response to rising demand or liquidity stress, an attempt to preserve margin amid a tightening supply of hard currency.

Coop Bank, by contrast, barely budged. It maintained a 131.86 Br buying rate, almost unchanged, and a steady 134.49 Br selling rate, deviating only briefly on June 13 when its spread hit 2.04pc, before reverting.

The week displayed a marketplace quietly segmenting into tiers.

On one tier are the aggressive banks, mainly Oromia Bank, with Awash and Zemen edging in, that were willing to pay above the pack to secure dollars. On another tier sit conservatively priced banks led by CBE and now, at least temporarily, Dashen and Abyssinia. Their quotes mirrored those of Coop Bank on June 14, all clustering at about 131.98 Br to buy.

The convergence unveiled a new clearing level favoured by banks that prefer caution over competition.

Underlying these tactical manoeuvres is the auction mechanism introduced to tame the parallel market. Banks submit bids under the ceiling set by the Central Bank, which hopes disciplined spreads will prevent a spiral of depreciation.

In practice, however, the market has created room for winners and losers. Banks with better access to official supply can afford to quote lower rates to customers, confident they will replenish dollars at auction. Those shut out or short on liquidity offer higher prices to attract inflows, widening their spreads or rolling the dice on future depreciation.

For corporate treasurers and ordinary savers, the week’s numbers may appear academic. The Birr’s midpoint barely moved, and spreads were kept at the two-point benchmark. However, the underlying shifts matter because they signal where the next bout of volatility might erupt.

If aggressive banks like Oromia Bank lock in more dollars, liquidity in the rest of the system could tighten further, forcing reluctant players to follow their lead. However, if the Central Bank throttles supply to cool bidding wars, the premium could jump to the parallel market, widening the very gap officials hope to close.

Saturday’s pattern captured the tension neatly. As CBE, Coop, and Dashen anchored at 131.98 Br, the Central Bank and Oromia Bank posted rates above 134 Br for buying a dollar, stretching the corridor despite official efforts to hold it. That divergence revealed the risk that policy and market forces could soon come into conflict.

Should the Brewed Buck weaken too quickly, import costs could spike, testing inflation-control efforts. If it remains too rigid, exporters may balk, remittances could bypass formal channels, and the parallel market premium might widen anew.

For now, uniformity still dominates, and official guidance keeps most banks in line. But the façade of calm relies on a delicate balance. A few basis points here or there, a skipped auction, or a sudden surge in demand could tip the scales.

In such an environment, the stirrings seen last week may mark only the opening chapter of a broader realignment, one likely to grow more visible as the broader economy responds to debt talks, infrastructure needs, and shifting global capital flows.

Digital Credit Surges as Mobile Lending Bakes Opportunity, Brews Risk

Posted on by Digital Editor

Hana Surafel spent years behind the counter of her uncle’s traditional cloth stall in Merkato, listening to customers haggle over fabric patterns. The 29-year-old mother of three earned a “respectable wage,” yet each long day ended with the same unfulfilled wish. She was adamant to open a neighbourhood bakery in Gulele, near Addisu Gebeya, where the scent of fresh bread would rise with the morning sun.

Lacking a property, a vehicle, or any other conventional collateral, she relegated the dream to quiet evening conversations. That is, until a taxi ride to work changed her fortunes.

A radio spot crackled through the minibus speakers, advertising no-collateral loans available through Telebirr, the mobile-money arm of the state-run Ethio telecom. Hana pulled out her phone, curious. Within weeks, she was seated inside a branch of the Commercial Bank of Ethiopia (CBE). Four months later, she received word that a 50,000 Br loan had been approved and automatically linked to her Telebirr wallet and CBE account.

Adding the funds to savings of 85,000 Br, she scraped together 135,000 Br and rented a cramped storefront a few steps from her front door. Last week, her ovens fired before dawn, supplying crusty rolls to a growing queue of neighbours.

“Access to finance used to be for those who already had something,” she said as trays cooled on a wooden rack. “Even someone like me can open a business and stand on her own with digital tools like Telebirr.”

Sales are strong enough to cover family expenses and monthly debt payments.

Phone-based credit is reshaping the financial ecosystem, where more than 80pc of adults still live outside the formal banking system.

Hana is one of the roughly 95pc of borrowers who repay on schedule. The same technology that helps individuals like Hana, however, is producing cautionary tales. Defaulters face steeper consequences.

“If the amount is not settled within the agreed period, the case may proceed to court,” said Tamiru Taba, a customer-service officer at Telebirr. “The service is inclusive but also makes clients accountable.”

Company officials confirm the platform can block services for delinquent borrowers.

Bayush Ejara, a mobile-money specialist at Telebirr, described the platform as a “financial marketplace” that enables rural and urban clients to borrow and save without visiting a branch.

“We’re shifting from asset-based lending to opportunity-based inclusion,” Bayush said.

Transaction patterns, including frequent transfers, steady digital deposits, and verification through the national ID database, primarily determine eligibility.

However, the twin impulses — widening credit while enforcing repayment — are animating a wave of digital lending partnerships between telecom operators and commercial banks. Telebirr has struck deals with CBE, Dashen, and Siinqee banks alone.

Telebirr offers two loan products in partnership with the CBE. The first, “Enderas”, targets short-term cash gaps. Borrowers can take between 100 Br and 4,000 Br for no less than 10 days at a 1.25pc facilitation fee; up to 10,000 Br for 25 days at 2.5pc; or as much as 15,000 Br for 60 days at 6.5pc. The second product, “Adrash,” caters to salaried workers whose paychecks flow through Telebirr. Customers may tap up to 600,000 Br, capped at 25pc of their monthly income for one month at a four percent fee, with repayments stretching over four months of salary repayable over a year.

Siinqee Bank, one of the lenders that spun out of the micro-finance industry, integrates its “Wabi” micro-credit window with Telebirr. Loans range from 100 Br for five days to 30,000 Br for 45 days. Employees whose wages pass through Siinqee may borrow the equivalent of five months’ pay, from 1,000 Br to one million Birr, and settle over 14 months.

Dashen Bank offers its “Mela” and “Mela Medaresha” lines through Telebirr, with sums from 100 Br to 36,000 Br on daily, weekly, or monthly cycles. Facilitation fees run between one percent and 10pc; late payers incur daily penalties of 0.11pc to 0.5pc.

An outlier to this trend is the Bank of Abyssinia (BoA), which pursues a branch-free strategy. Its digital platform, also available on a mobile app, Apollo is a standalone platform marketed to the diaspora and urbanites weary of paperwork.

Its director for digital customers, Abay Sime, likens Apollo to “a full bank in your pocket.” Prospective borrowers are required to upload an ID, a selfie, and a recent transaction history. The app conducts a liveliness test to verify that the applicant is human. Behind the screen, a credit-scoring model ranks risk, enabling disbursements deemed “high-risk but manageable.”  Until last week, the Bank had issued, through Apollo, 2.2 billion Br to more than 60,000 users.

“Our biggest job is awareness,” Abay told Fortune. “We constantly remind clients not to violate the rules.”

The Cooperative Bank of Oromia (Coop Bank) entered the arena two years ago with “Michu,” a suite of products designed for business people who have been shut out of collateral-based lending. Ashenafi Abate, who heads the platform, divides Michu into three channels. Michu Wabi serves micro-sized firms that require 50,000 Br to 100,000 Br at an eight per cent interest rate and fees. Michu Guya caters to informal traders and street vendors known as “gulit,” who are not required to produce business licenses, advancing 5,000 Br to 15,000 Br for a seven-day period. Michu Kiyya focuses on women, advancing up to 30,000 Br at a 3.5pc rate.

“It’s our way of supporting women who are making a tangible impact,” said Ashenafi.

Coop Bank’s digital push has opened 1.5 million accounts, of which women hold 1.1 million. Loans totalling 25 billion Br have coursed through Michu, and women have secured 7.9 billion Br, evidence, Ashenafi says, of an intent to “include previously marginalised groups.” He finds repayment to be “commendable,” though clients who drift into arrears receive text nudges before legal steps are taken.

Ethiopia’s leap into mobile credit mirrors a broader African trend. In Kenya, Safaricom’s M-Pesa began parcelling out phone-based microloans more than a decade ago, spawning a cottage industry of fintech apps. Regulators in Addis Abeba watched warily until 2021, when officials granted Telebirr a license to operate under the telecom monopoly. Private competitors are now lobbying for entry, a shift that could drive rates lower and encourage banks to offer larger, unsecured products.

For lenders, the attraction is data. Phone records, digital payments, and geo-location trails provide near-real-time insights into a borrower’s cash flow, enabling credit algorithms to replace land titles or car deeds as collateral proxies. For borrowers, the pitch is speed. Applications that once required days of queuing and notarised documents can be approved in minutes. That convenience, however, comes with a different form of leverage. A handset can be switched off, or a wallet can freeze at the first missed payment.

According to economists, the fledgling credit-scoring regimes remain opaque. They warn that if the model overestimates repayment ability, defaults will climb quickly. Telebirr insists that its repayment success rate demonstrates the effectiveness of the screening process, but critics note that the loans are still relatively small. The real test, they say, will come when platforms push farther into higher ticket sizes like Adrash’s 600,000 Br ceiling.

Clients like Hana have little time for debates about risk models. Hana slips on plastic gloves each evening, kneads dough, and arranges loaves for predawn baking. Her three children, once crowded into the back of her uncle’s shop after school, now sweep crumbs off the bakery floor while homework waits.