Under the midday sun on a busy Bole sidewalk, a group of street cleaners in bright uniforms pause with their brooms in hand—chatting, sweeping, and blending into the city’s rhythm as they quietly shape its face, one piece of litter at a time.
Author: Digital Editor
UPHILL CRUMBLE
At the end of a steep, rocky shortcut near Meshualekya Roundabout, a quiet Sunday market rests, emptied of the weekend’s hustle. Here, affordable clothes and everyday goods offer a lifeline for shoppers looking to stretch tight budgets.
World Bank Injects 253M Dollars into CBE Recapitalisation
The World Bank has disbursed 253 million dollars to the Commercial Bank of Ethiopia (CBE), the first major tranche of a 700 million dollars package intended to stabilise Ethiopia’s financial sector. Over 95 pc of the total, 670 million dollars is allocated to recapitalise CBE and the Development Bank of Ethiopia (DBE), while the remaining funds are designated for technical assistance and regulatory reforms.
The disbursement came with conditions. CBE was required to meet a set of performance benchmarks, including stricter capital adequacy requirements and institutional reforms, in order to unlock the funds. These measures are intended to strengthen the Bank’s balance sheet and rebuild confidence among investors and the public.
The funding follows Ethiopia’s ongoing macroeconomic reform programme, which includes floating the birr, limiting central bank deficit financing, and opening the financial sector to foreign banks. These changes have put added pressure on state-owned banks like CBE, which continue to carry large volumes of legacy non-performing loans, mostly tied to government infrastructure projects.
CBE has recently shown signs of recovery. Over the past eight months, it reported a 344.4pc surge in deposits, reaching 1.51 trillion Br. Total assets rose to 2.03 trillion Br, a 38.3pc increase compared to the previous year. However, challenges remain. Bank President Abie Sano acknowledged an ongoing asset-liability mismatch and revealed that last August’s reforms led to 30 billion Br in foreign exchange losses.
The recapitalisation forms part of the Financial Sector Strengthening Project (FSSP), a broader initiative aimed at stabilising Ethiopia’s financial system. The programme supports key institutions such as the National Bank of Ethiopia (NBE), CBE, and the Development Bank of Ethiopia (DBE), with a focus on regulatory upgrades, governance reforms, and balance sheet recovery.
An additional 400 million dollars is expected to be disbursed before June.
Ethiopia Leads Africas AI Revolution with New Continental Initiative
Prime Minister Abiy Ahmed has launched the “Artificial Intelligence for Africa” programme under the theme “Artificial Intelligence for Africa’s Prosperity and Cooperation.” The event was held at the Addis Abeba International Convention Centre, Summit Square, with Deputy Prime Minister Temesgen Tiruneh, House Speaker Tagesse Chafo, and representatives from several countries in attendance.
Co-organised by the Information Network Security Administration (INSA), the Ethiopia Artificial Intelligence Institute, and co-hosted by UAE Cyber Security, the expo is intended to foster global collaboration and position Ethiopia as a leader in shaping Africa’s digital future.
Abiy stressed that Africa is entering a new era—one that can realise the goals of Agenda 2063 through inclusive prosperity driven by indigenous artificial intelligence. He said Ethiopia is setting an example by investing in AI, digital infrastructure, and skills development through initiatives such as the Ethiopian Artificial Intelligence Institute and the national digital ID programme.
He shared Ethiopia’s progress with platforms like the all-in-one digital system “Moseb” and the “Five Million Coders” programme, saying the country has begun transforming aspirations into tangible, impactful results. Looking ahead to 2030, Abiy said Africa must shape its own AI future—ethically, inclusively, and sustainably—ensuring that no one is left behind.
The expo drew participation from international and local institutions and start-ups, including Topan and Huawei.
“Ethio Telecom is the cheapest and largest telecom company in Africa,” Abiy said, underscoring the country’s growing digital capacity.
He also announced plans to significantly expand the integration of AI technology into universities and relevant institutions over the next year.
“Education is essential for technology,” he added.
Abiy noted Ethiopia’s transition to digital technology services as “a fact we must recognise.”
PROMISED HOMES COME WITH DEBT
In northern Addis Abeba, a neighbourhood known for its vibrant community has become a symbol of relocation, as city authorities push forward with an ambitious riverside development project. Longtime residents who lived modestly in public houses, paying nominal rent, have been abruptly relocated into government-built condominiums, new structures they neither chose nor can afford. Many say they find themselves caught in a daunting financial squeeze, facing hefty down payments of 120,000 Br, an amount far exceeding their compensation for relocation. Across the city, a corridor development work, designed to modernise the city’s congested and ageing neighbourhoods, initially offered displaced families the option to move into similarly affordable public housing or buy new condo flats with government-backed mortgages. But residents say the low-rent alternatives never truly existed, pushing thousands toward unaffordable condominium purchases. The initial 48Km phase of the project, undertaken at the cost of 33 billion Br, relocated approximately 11,000 people, demolishing tight-knit neighbourhoods and replacing them with wide boulevards and modern flats.
Families who reluctantly moved into the new condominiums did so under a promised flexibility. They could occupy units first, delaying initial payments. Now, as deadlines approach, more than 4,000 households face accumulating debt or eviction threats. Many have already spent their meagre relocation stipends, around 85,000 Br, on basic survival, hospital bills, or making their unfinished new homes habitable. With finances exhausted and opportunities limited, eviction has become a very real fear. Experts criticise the city administration’s hurried pace as indicative of poor planning and insufficient consultation. They argue that lower-income residents displaced by development projects deserve to share in the wealth created by increased land values, rather than bearing disproportionate financial burdens alone. The city officials maintain that modernisation is essential to accommodate Addis Abeba’s ballooning population of nearly five million, but critics warn that authorities are trading the city’s cultural identity and social cohesion for mere cosmetic upgrades.
The financial strain extends beyond the displaced residents, now affecting the largest bank, the Commercial Bank of Ethiopia (CBE), which has only recovered 1.9pc of the projected 25.85 billion Br owed from housing bond repayments related to the condo project. This alarming shortfall has heightened concerns over the programme’s viability and casts doubt on whether such aggressive redevelopment truly benefits the city or merely deepens existing social inequalities. As deadlines loom and residents confront mounting debts and possible homelessness, Addis Abeba’s ambitious urban transformation risks alienating the very citizens it purports to serve.
Debt Deadlines Test the Promise of Addis Abeba’s Makeover
Tsiriha Biru, 45, had never imagined that her rhythm of life in Adissu Gebeya, a northern Addis Abeba market hub she had known for three decades, could be broken in a single July afternoon. The mother of four paid less than 100 Br a year for a modest public (Kebele) house and counted on familiar neighbours.
Last summer, a city notice told her and 60 other families that the Addis Abeba’s riverside development project would “transform” their neighbourhood. Wereda officials offered two pathways. Stay in similar low-rent public housing or move into a government-built condominium with a sizable down payment. Tsiriha found the choice nothing but a dilemma.
“The houses for low-rent tenants were already occupied,” she recalled. “We’re all pushed into condominiums, whether we like it or not.”
She has been living in a one-bedroom unit at Bole Arabsa Condominium Site 3 for seven months without a lease. Her only concern is a required prepayment of 120,000 Br, which is well beyond her means.
“I never wanted to move into a condominium,” she told Fortune.
She relies on what is left of the 85,000 Br the city paid her for transport costs and “emotional hardship.” The money is nearly gone, and a June 7 deadline looms.
“If I could borrow the rest, I’d pay,” she said. “If not, the street will be our home — me and my children.”
Stories like hers echo across the capital as the city authorities press for a redevelopment that is determined to overhaul Addis Abeba’s identity. For many who support the project, the city is going through “a remarkable transformation;” for others, it is “losing its soul.”
The corridor development project, as it is officially christened, was unveiled by the city administration in February last year. It set out to tear through dense neighbourhoods, replace ageing public rentals, mostly made of mud and tin roofs, with condominiums and re-engineer transport arteries that choke the capital each rush hour. Phase one ran 48Km through Piassa, Arat Kilo, Bole, Megenagna, Mexico and CMC areas, costing the city administration 33 billion Br. It relocated about 11,000 people.
The latest push to modernise the streets promised wide boulevards, better drainage and fresh housing blocks. But, it has also trapped thousands of its longtime residents in financial limbo.
Residents, many paying token rents under the public housing system, were told they could continue as low-cost tenants or buy a flat under the city’s mortgage program where the banks loan 80pc of the equity, after the balance is deposited upfront. In reality, say former tenants, the rentals were full, and officials pressed everyone toward buying condos that millions of low-income Addis Abebans barely imagine covering.
The second phase, now underway, is larger, stretching 132Km across 2,817hct, sweeping Casanchis, Aware and five other districts into the bulldozer’s path. Crowded lanes of sheet-metal shacks and mom-and-pop kiosks have given way to raw earth and half-poured pillars.
According to Tomas Debele, deputy director general of the Addis Abeba Housing Development Corporation, nearly 9,000 units — some for rent, most for sale — were handed over across both phases, but more than 4,000 households have yet to sign sales documents. The Corporation has imposed a deadline of June 7, 2025.
“The residents were given enough time,” Tomas said. “They’re now obliged to sign the contract.”
If they fail, he warns, the Corporation may add interest charges on the Commercial Bank of Ethiopia (CBE) loans that financed construction and, in severe cases, repossess apartments.
“These houses were built using borrowed money from CBE through bond sales,” he said. “We expect to return up to two billion Birr from this. That’s what is at stake.”
For many families, the sums look impossible. Tenants forced from kebele blocks received compensation, usually 85,000 Br for moving expenses and “emotional hardship.” Like Tsiriha, they have to raise an additional 120,000 Br to satisfy the 20pc deposit. The corridor program let families occupy flats before paying, a break from earlier condominium lotteries that required the advance first. What was intended as flexibility has turned into a mountain of unpaid balances and a second eviction threat.
No one feels that squeeze more sharply than Yitbarek Zegeye, 25, who lives in the same compound as Tsiriha in Bole Arabsa.
He remembers how swiftly the wreckers tore down his parents’ house near Shola, three days after the first notice. The shock triggered a health crisis for his mother, and much of the family’s payout went to hospital bills.
“She never fully recovered,” he told Fortune.
They chose a condominium, yet the required down payment now looks unreachable.
A similar story echoes a few blocks away.
During the project’s first phase, Dawit Gebreyesus, a carpenter and father of three, was uprooted from Piassa’s Serategna Sefer. He rented near his old neighbourhood to make his children finish the school term, burning through his compensation. When he finally received keys to a unit in the same Bole Arabsa cluster, he found bare concrete walls, no wiring, plumbing or doors.
“I spent what little I had left to make it inhabitable,” he said.
His income, built on Piassa contacts, has fallen by half, and the sales contract for the condo remains unsigned.
Legal experts say aggrieved tenants have little leverage.
Yared Siyum, principal of Yared Siyum & Associates Law Office, noted that the Corporation still owns the flats without signed contracts.
“They retain full legal rights over the properties,” he said.
He advises families to pay if they can, though he believes the city should offer an administrative fix for those who cannot.
Under the scheme, buyers deposit one-fifth with the Addis Abeba Housing Corporation. The Corporation then transfers title deeds to Addis Abeba Land Development & Administration Bureau which then transfer it to CBE, which collects the remaining 80pc mortgage over up to two decades. Earlier programs barred families from entering flats without paying the first slice. Tomas says relocations under the corridor development are “a special case.”
However, experts who follow this development say the speed at which neighbourhoods are demolished and residents relocate demonstrates a campaign mentality rather than sound planning.
Anteneh Tesfaye, an architect and urban planner, believes corridor makeovers should have been planned over many years, with extensive consultations with residents who could be affected by the process.
“Individuals should have had the opportunity to choose housing options that suited their financial situation and personal preferences,” he said.
He argued that most relocatees are low-income; hence, they should share in the land value unlocked by redevelopment rather than shoulder the cost alone.
The strain is now visible at the biggest lender. CBE’s President, Abie Sano, appeared before Parliament in March this year to report on third-quarter performance. He disclosed that the Bank had collected only 1.9pc of the 25.85 billion Br it projected from housing-bond repayments.
City leaders counter that Addis Abeba should modernise to keep pace with its swelling population, now close to five million, and a road network straining under twice-daily gridlock. They tout new asphalt, drainage culverts and landscaped medians already laid in Piassa and Mexico Square as proof that the upheaval will pay off. But critics say the social ledger is in the red.
To residents, development now resembles progress billed by the month, not a shared civic victory.
In the Bole Arabsa area, residents juggle incomplete infrastructure and rising bills. Water flows intermittently, elevators stall, and the absence of corner shops forces trips to distant markets. Dawit’s piece-work earnings have halved; Tsiriha hires a relative to watch her youngest child while she looks for cleaning jobs. Every Birr saved edges toward the deposit.
With the June deadline seven months away, the housing corporation has opened extra service windows and encouraged micro-finance lenders to offer small loans at interest rates above 15pc, terms many see as another trap. Anteneh recommended tapping the jump in land value to subsidise deposits.
“If you profit from their displacement,” he said, “you should also compensate them beyond a one-time allowance.”
The Mayor, Adanech Abiebie, pledged to push ahead.
“Addis Abeba cannot delay modernisation,” she told a recent city council session.
Tomas echoed that voice: “The houses are not free. People should understand that.”
At sunset, Tsiriha stood on her balcony and watched workers pour concrete for yet another block across a dusty field. She has taped the June notice to her wall next to a fading photograph of her old courtyard. Some nights she rehearsed phone calls to friends who might lend money; other nights she wondered where she would stretch a plastic sheet if officials locked the door.
“I’ve no room for hope,” she said, softly. “Just days on a calendar.”
Whether the corridor project ultimately eases traffic or fuels resentment may depend less on vehicle counts than on the fate of families like Tsiriha, Yitbarek, and Dawit, who find themselves paying the hidden price of Addis Abeba’s leap toward a shinier skyline.
Revenue Rises Falter Under Weight of Smuggling Surge, Depreciation, Inflation
The federal government collected 653.2 billion Br in tax revenue in the third quarter of the current fiscal year, narrowly surpassing the Ministry of Revenue’s target of 646.7 billion Br but falling short of the Administration’s ambitious goal of 1.5 trillion Br.
While the achievement marks a considerable 74.5pc increase from the previous year, translating into an additional 279 billion Br, it revealed the daunting task ahead as the country struggles to finance annual spending exceeding 1.2 trillion Br.
Aynalem Negusse, minister of Revenue, conceded last week when she appeared before Parliament. She told MPs that the performance was “an over-achievement on our plan, but only a step toward where we need to be.”
According to the Minister, expanding the tax base is necessary due to inflationary pressures and the weakening Birr, both of which diminish the real value of the revenues mobilised.
Domestic taxes contributed 345.9 billion Br, and customs duties accounted for 307.25 billion Br. Of this, 61 billion Br was transferred to regional states, marking a 37pc increase from the previous fiscal year.
Federal officials, including Prime Minister Abiy Ahmed (PhD), have consistently attributed the expansive informal economy to a major barrier to achieving a tax-to-GDP ratio target. The Administration hoped to increase this ratio by one percentage point this year, targeting 10pc, which officials argue would provide vital fiscal space for infrastructure projects, social programs, and debt servicing. Despite these efforts, the informal sector remains pervasive, reducing potential tax revenue and complicating enforcement measures.
The Ministry’s officials face ongoing difficulties from illicit trade, which has intensified considerably over the past year. Customs officials seized contraband valued at 15 billion Br, a 32pc increase compared to last year. Among the illicit items, khat, a popular stimulant crop and a major source of export revenues, is the primary concern. Smugglers have diverted substantial volumes from legal export channels, harming legitimate traders and reducing tax revenues.
Anwar Yusuf, general manager of Kulmuye Trading Plc, a company that exports khat, described the export environment as “unbreathable,” noting a daily volume reduction of up to 400Kg due to the 25pc lower prices of smuggled khat.
A member of Parliament, Debebe Admasu, echoed the alarm about the surge in khat smuggling.
Official statistics disclosed the severe impact of contraband khat on export revenues. The country earned only 180 million dollars from khat exports in the 2023-24 fiscal year, well below the target of 450 million dollars and down from 402 million dollars three years ago. In the most recent quarter, earnings plummeted to 28.3 million dollars generated from 2,580tns exported, representing a 35pc decline. Less than 10pc of the 65,817tns intended for export passed through official channels.
In response, the federal government initiated a relicensing campaign over the past four months, renewing 300 existing licenses and issuing 600 new ones. Yet, industry insiders contend that these measures have had a marginal impact.
Customs Commissioner Debela Kabeta concurred. Attributing khat’s susceptibility to smuggling historically, he disclosed plans to establish a regulated trade centre in Aweday, in Oromia Regional State, to streamline transactions.
The Trade Bureau in the Regional State has also intensified anti-smuggling measures, confiscating contraband worth 485 million Br, including khat, petroleum, livestock, and electronics. Getachew Kopisa, the Bureau’s head, attributed increased smuggling activities to substantial price discrepancies with neighbouring countries and inadequate regional trade integration. Commissioner Debela states that pursuing illicit profits and external pressures further exacerbate the issue.
Federal officials blame tax evasion as an impediment to revenue collection. The Ministry’s officials told MPs they have identified 641 companies with serious irregularities. Investigations revealed more than 2,200 fake receipts, amounting to 3.49 billion Br, and uncovered 19 firms evading taxes on online transactions totalling 5.03 billion Br. According to the Commissioner, 85pc of imported goods were under-invoiced.
Minister Aynalem raised concerns about illegal checkpoints and insufficient federal oversight, especially within the mining sector, notorious for its illicit activities. MPs criticised gaps in digital tax collection, noting that only 35pc of the expected digital revenue had been successfully mobilised. The Minister countered that 60pc of digital tax collections occur through bank transfers, complicating immediate revenue registration.
However, Berhanu Barete, an MP, expressed doubt about the Ministry’s capability to effectively fight tax evasion, particularly in the rapidly growing digital marketplace.
“Your monitoring has weakened,” he told officials during a Parliamentary session.
Minister Aynalem acknowledged shortcomings in collecting revenue, particularly from profit taxes and VAT, attributing challenges partly to limited taxpayer awareness.
The Addis Abeba Revenue Bureau recently introduced a market-based value-added tax system to address these issues, utilising price data from over 2,000 commodities to enhance transparency. However, the reform has met resistance from businesses, particularly those in the textile sector, who have appealed directly to the Ministry of Industry. Parliamentarians have also criticised the VAT imposition on agricultural inputs such as animal feed, arguing it aggravated food inflation despite headline inflation declining from 31pc to 18pc.
For an MP such as Tesfaye Bango, this contradiction unveiled ongoing price hikes for food.
Ministry officials clarified that VAT exemptions were policy decisions beyond their control. Federal legislators have urged the authorities to include domestic workers and security personnel within the formal tax net and revise taxable income thresholds to boost revenue further.
Concerns over fiscal sustainability intensified when lawmakers noted that current tax revenues cover only half of the federal government’s annual expenditures of 1.2 trillion Br. The Minister hopet the reported revenue covers the third quarter, expecting a complete yearly picture to offer better information. However, Berhanu argued that the report failed to account for the impact of currency depreciation. Despite a nominal 74pc increase in tax revenues, he asserted the Birr’s purchasing power had diminished by approximately 150pc.
The Birr has lost ground by nearly 140pc since August last year, when the federal government liberalised the exchange market.
For Commissioner Debela, tax collection is legislatively mandated in Birr, thus dismissing immediate concerns about currency depreciation. However, the Commissioner acknowledged potential future impacts from currency depreciation, expecting their effects to be more apparent in subsequent reporting periods.
For tax experts, the broader implications of rampant contraband and evasion suggest that these activities not only reduce immediate sales taxes but disrupt income tax collection throughout supply chains. According to Biruk Nigussie, a former tax assessment manager for the defunct Revenues & Customs Authority for a decade, and a tax advisor for 15 years, deliberate tax avoidance comes from erosion of public trust and opaque public expenditure practices.
“People pay to avoid trouble, not because they believe in the system,” Biruk told Fortune.
He also cautioned that VAT exemptions should be judiciously determined based on thorough economic analysis to avoid exacerbating inflation.
Ministry Pushes Auto Policy Shift as Industry Hits the Brakes
Federal officials have drafted a sweeping policy for automotive development, aspiring to turn Ethiopia into an assembly hub that can join South Africa and Morocco. The text, prepared with input from domestic manufacturers, promises incentives for electric, hydrogen-powered and liquefied-petroleum-gas vehicles, a clampdown on used-car imports, and a new loan scheme meant to put more vehicles within reach of taxi drivers and small businesses.
“The goal is to make local manufacturing the backbone of Ethiopia’s automotive future,” said Kedilmagist Ibrahim, an adviser to Alemu Sime, minister of Transport and Logistics, who is steering the project.
Charging equipment for electric vehicles will be exempt from tax, and a roadmap for battery disposal is in the works even though, as Kedilmagist conceded, “there are no global precedents” to follow.
Duties already tilt heavily against imported cars. A 2021 study put tariffs and levies on new vehicles between 46.75pc and 67.45pc, while used models face rates from 156pc to 765pc. The draft policy widens that gap by imposing an additional 20pc excise duty on every new passenger car or light commercial vehicle that lands fully built at the port. Importers will also have to present emissions and road-worthiness certificates before shipment, and the customs service is to revise its tariff schedule to reflect the tighter differentiation.
The Ministry wants to close another gap between consumers and lenders by introducing an asset-based vehicle loan. Banks usually tie auto financing to personal credit, shutting out many potential buyers. The change is designed to let buyers pledge the car as collateral, a move officials hope will expand ownership and spur assembly volumes.
Financing snags tripped up taxi owners earlier this year after city officials ordered fleets to replace ageing vehicles.
Multiverse Enterprise Plc, run by businessman Seid Negash, stepped in with a proposal, teaming up with the Defence Engineering Industry Corporation to assemble and finance about 5,000 diesel and electric taxis. The state-owned Commercial Bank of Ethiopia (CBE) endorsed the plan, earmarking 17pc of a 35-billion-Br fund for down payments. Multiverse wants to swap 15,000 cabs and claims to have supplier credit in forex, yet Seid remains uneasy.
“The policy is welcome,” he said, “but the limited liquidity in banks is still a concern.”
Quality rules will toughen alongside the tax measures. Salvaged or flooded vehicles will be barred, as will cars lacking an original equipment manufacturer destination certificate. The authorities want to see models cobbled together from spare parts out, and imports to carry microdot markings to defeat tax evasion and fraudulent registration.
The government intends to set up a dedicated automotive park, steer assemblers into existing industrial zones, and help others secure land through public-private partnerships. Ethiopia counts 14 active assemblers; they would need the extra room if output expands toward the policy’s target of at least 5,000 units a year per plant.
Applicants for the planned incentives will have to show factory addresses, original equipment manufacturer (OEM)- supplied equipment lists, and production lines with four workstations, utilities, and quality-control kits. Only global OEMs, their licensed partners, or contract assemblers under OEM supervision can register. They should also import semi-knockdown (SKD), wholly knockdown (CKD), or fully built kits that qualify for duty relief.
According to Kedilmagist, the Ministry conducts price studies to ensure taxpayers do not prop up inefficient players.
“If local assemblers cannot perform under these supportive conditions, we must rethink the incentives,” he said.
The targets are steep. Ethiopia’s rated capacity is 63,900 two- and three-wheelers, 14,900 cars, 1,200 light trucks, and 3,500 minibuses and buses. Electric-vehicle capacity is 84,000 units, yet fewer than one in 10 production slots is used. Assemblers built 21,800 vehicles last fiscal year, including over 2,000 electric cars. Imports swamp local lines, with more than 25,000 EVs shipped in during the first half of the current year alone.
To narrow that gap, the Finance Ministry issued a directive last month telling government offices to favour locally assembled electric cars in tenders, offering a 15pc price preference when local value added exceeds 35pc.
“There are many policies, but implementation is lagging,” said Semereab Serekeberhan, deputy board director of the Ethiopian Automotive Industries Association and a 20-year veteran.
He recalled writing to the Industry Minister six months ago to protest a 20pc customs duty increase on CKD and SKD kits and a 10pc surtax. Officials brushed off the complaint, he said, arguing that the market should move away from fuel-powered vehicles anyway.
“The population’s purchasing power has already declined,” he said. “Raising prices does not guarantee sales.”
Plant utilisation has fallen sharply. Five years ago, many factories ran at 10pc to 30pc of capacity; now, even 10pc is hard to reach. Semereab blames shifting rules, citing an earlier decree that companies win at least 35 million Br in contracts over four years to qualify for procurement tenders, a threshold most local assemblers could not clear.
The Chinese manufacturer Lifan Motors has laid off more than 250 employees and is faced with a threat of closure. Critics argue that investors and customers hesitate when taxes change without forewarning.
Moges Negash, an automotive engineer who sells vehicles at Moges Motors, contends that some firms abuse assembler licenses to import fully built cars under more generous terms.
“Unknown taxes and rules inflate prices and disrupt the market,” he said.
He warned that high volume alone will not save the sector.
“Customers should believe in the product first,” he told Fortune.
The draft’s export section eyes the African Continental Free Trade Area (AfCFTA), which began lowering duties among 54 member states in 2021. Ethiopia wants to join South Africa and Morocco as the continent’s leading car producers. To do so, it plans to toughen emission and safety standards, expand the Ethiopian Standards Agency and lay out long-term export strategies. Manufacturers able to meet those rules would, in theory, gain a tariff-free gateway to a market of 1.4 billion people.
However, the promised boom depends on execution. Officials say an electric-battery disposal policy and a scrappage plan for obsolete cars are “underway,” but they remain in draft form. Kedilmagist insisted that the Ministry will consult stakeholders before final approval. Leaders of the Automotive Association are pushing for revisions, arguing that taxes inputs discourage local content and favour imports despite the headline incentives.
Seid Negash, whose Multiverse deal rests on bank financing and supplier credit, still backs the program. He expects the policy “could improve customers’ purchasing power,” provided banks overcome their liquidity problems.
Worker Turnover, Export Slump Test Industrial Parks
Labour churn erodes the flagship industrial-park experiment, unsettling managers who hoped the zones would anchor an export-led industrialisation drive. During the first nine months of the current fiscal year, 36,600 workers were recruited, but 37,000 walked out, managers of the state-owned Industrial Parks Development Corporation (IPDC) told Parliament last week.
A sharp export slump mirrors the labour flight. Factories inside the special economic zones shipped goods worth only 83 million dollars, 65pc of the 127 million dollar target for the period.
“The export market still hasn’t recovered from Washington’s suspension of the African Growth & Opportunity Act,” Fesseha Yitagesu, CEO of the Corporation, conceded at the hearing.
The trade benefits were revoked in January 2022 over alleged human rights violations during the civil war in northern Ethiopia. The loss of duty-free access has left a hole that the Corporation’s management and investors have yet to patch.
A study by Habtamu Worku, an economist at the National Bank of Ethiopia (NBE), quantified the scars. At the programme’s 2019 peak, the industrial parks exported 3.23 million kilograms of apparel and footwear worth 30 million dollars a month to the United States under AGOA’s duty-free terms. Earnings collapsed to 11.3 million dollars in 2021 after the Biden Administration revoked market access, while shipment volumes fell to 2.31 million kilograms.
After a brief uptick to 12.9 million dollars in early 2022, monthly receipts slid again, landing at 10.6 million dollars by mid-2024.
Habtamu argued in this paper that the macroeconomic shock was “smaller than many feared,” yet far from trivial. The Corporation saw the loss of 18 companies, 11,400 jobs, and 45 million dollars in revenue. Volumes dropped 32.3pc, and values fell 13pc. Ethiopia’s goods sold to the U.S. in 2021 totalled 276 million dollars, 90pc of them garments once sewn in the gleaming sheds that dot the parks.
Profit remains elusive. Between July and March, the Corporation projected three billion birr from renting factory units, leasing cultivated land and providing auxiliary services. It collected three billion Birr, about 65pc of the plan, leaving a sizable cash-flow gap. Net profit followed suit. A forecast of 951 million Br dwindled to 192 million Br, barely one-fifth of the goal. Fesseha blamed tenants who “aren’t paying rent as stipulated” and noted that bills fall due quarterly.
Despite financial strains, investment is a comparatively bright spot. The parks attracted 689 million dollars in fresh capital, 86pc of the target, spreading across 98 approved projects. Nine are bona-fide foreign direct investments (FDI), one is a joint venture, and the remaining 88 involve domestic investors, a reversal of earlier patterns. Local investors now supply 60pc of new money, up from roughly 10pc four years ago. Once assembly lines start humming, planners expect 22,614 jobs, though the recent high turnover shows that hiring is no guarantee workers will stay.
Import substitution, long hailed by federal officials as a path to preserve scarce foreign exchange, has been less convincing.
Birhan Eshetu, an international trade-policy analyst, argues that import substitution remains vital for Ethiopia’s growth trajectory. But, he noted that the current programme concentrates on textiles while the country’s import bill is dominated by food and beverages. For him, quality is a sticking point.
“Local goods often fail to meet market expectations,” he said, even though park operators still enjoy duty exemptions on imported machinery and a seven-year tax holiday.
To accelerate scale-up, Birhan called for extended tax holidays, duty relief on inputs and modernised logistics, including port procedures so containers clear in days rather than weeks.
The Corporation’s management disclosed that factories supplied 115 million dollars in goods to the local market during the past nine months. However, several federal lawmakers complained output is slipping, especially at Hawassa, where a substitution has slumped to 37pc as the zone shifted to logistics.
Fesseha pinned part of the blame on the stop-start pattern of textile contracts.
“Military uniforms are produced only every two years,” he said, insisting the dip is temporary.
Park tenants paint a different picture.
“High taxes and cheaper prices have robbed import substitution of its allure,” said Hibret Lemma, head of the Hawassa Industrial Park Investors’ Association.
Lines that once spun T-shirts for retailers abroad are now running at only 30pc to 40pc of capacity, even though Hawassa boasts “the highest human-resource footprint in the sector.” Hibret expects to “double our capacity in human resources by December” as orders stabilise.
He is betting on exports instead of the home market. European buyers are being courted, and he remains “hopeful about the U.S. market,” arguing that Washington’s recent decision to lower tariffs on some goods from Ethiopia has made products from rival suppliers less competitive. Hawassa is also branching into solar-cell exports, a diversification Hibret says will strengthen investors’ bargaining muscle in Addis Abeba.
Still, he frets that a new crop of companies is joining mainly to tap subsidised infrastructure rather than to build a coherent cluster.
Members of Parliament’s Budget Standing Committee shared some of that anxiety as close to 75pc of the Corporation’s revenue flows from only two streams, mainly rent and service charges. MPs warned that relying on a narrow base leaves the Corporation vulnerable when tenants fall behind. Executives assured them they are scouting for new income lines, including value-added logistics and agro-processing hubs, but such initiatives will take time.
Land, not money, is the pinch point that threatens expansion plans. The Corporation initially mapped estates covering 17,000hct but has held title deeds to 3,000hct.
The Corporation oversees parks in Bole Lemi, Qilinto, Kombolcha, Hawassa, Jimma, Mekelle, Semera, and the Dire Dawa Free Trade Zone. Together, the sites cover 115,918hct, and investors have lodged requests for 22 factory sheds, more than the 18 initially planned. Management says an additional 888,000hct of land will be needed to supply raw materials such as cotton, hides, and oil seeds if all the spinning and tanning lines go live.
The crunch is especially acute at Bole Lemi, on the southeastern edge of Addis Abeba, whose attraction lies in its 15-minute truck run to Bole International Airport. Residents who have taken compensation packages refuse to leave, creating a standoff.
“Meddlesome men are causing us trouble,” Fesseha told lawmakers.
The gridlock is stalling private capital. An investor who asked to remain anonymous said he received a promise eight months ago for a parcel in Bole Lemi. Expecting a turnkey facility, he borrowed half a million dollars from the Development Bank of Ethiopia (DBE) to buy machinery. When he visited the allotted plot, he found “roads and empty land.” Erecting basic sheds and utilities will cost at least another 200,000 dollars, which he had not budgeted.
Rent was initially pitched at 15,000 Br a hectare; the draft contract now demands 20 million Br.
“Foreign investment is untenable at that price,” he told Fortune.
Security tops the ledger of unexpected costs. Executives say that unrest on trade corridors has pushed premiums higher, while firms at Dire Dawa now route containers through Djibouti under armed escort. The extra outlays, together with rising energy bills, narrow margins already squeezed by softer export prices.
Seleshi Kore (PhD), deputy chairman of Parliament’s Standing Committee on Urban Development, Construction & Transport, urged managers to review “the effectiveness and productivity” of every tenant, intensify land acquisition and verify that investors have the financial muscle to deliver promised jobs.
“Find an in-house solution, as the minimum-wage regulation is not being enforced right now,” he said on the labour crunch, warning that high turnover can repeal any wage savings.
According to the expert, reforms are urgent as Ethiopia inches toward membership in the World Trade Organisation (WTO).
“Domestic businesses should be supported before the deal is signed,” he said, cautioning that lower tariffs without local capacity could widen the trade deficit. “They have to compete globally.”
Avocado Boom Faces a Bitter Harvest Despite Lofty Promises, Fragile Supply Chains
Federal officials have unveiled a three-pronged allocation strategy for this year’s anticipated avocado bonanza. Of the record 18.1 million tonnes forecasted, half is earmarked for export, 40pc for domestic consumption, and the balance for industrial processing. The government’s ambitious vision stakes the country’s hopes on a fruit that accounted for less than a tonne of exports last year, revealing a deep disconnect between aspiration and infrastructure.
At face value, the sheer scale of the leap — from 781Qtls exported last year to a 10,000Qtls target this season — is unprecedented. Yet, this optimism belies logistical bottlenecks, capacity constraints, and structural inefficiencies that plague the nascent avocado value chain.
“We’ve plans to export most of the avocado harvest,” said Mohammedsani Amin, deputy head of the Oromia Bureau of Agriculture. “Production is scaling up as we collect avocados from smallholder farmers organised in clusters.”
Yet, hard data remain scarce. A Ministry survey pegs domestic demand at roughly 80,000tns a year, a reminder that market knowledge is thin.
The year’s export targets are more than a dozen times last year’s shipments. However, variety remains a problem.
“We currently export only one of the seven varieties we grow,” Mohammedsani said, noting that foreign buyers want fruit that most growers do not yet produce in quantity.
Since 2005, the U.S. Agency for International Development (USAID) and Israel’s MASHAV have worked with the Ministry of Agriculture to spread the Hass variety, favoured worldwide for its creamy flesh and thick skin. The program has reached about 2,600 farmers over the past four years and plans to help them export 100tns of Hass this September. It has rolled out modern nurseries and handed out improved seedlings, encouraging early results.
For researchers such as Abayneh Melkie of Debre Markos University, the weak link is post-harvest handling.
“Farmers don’t know how to handle avocados after harvest,” he said. “This contributes to quality loss.”
He urged government-led awareness drives, more investment in refrigerated transport, expanded cultivation of export-friendly varieties and better packaging.
Officials are carving out cultivation clusters of 200hct to 300hct. On one 172hct block in the Ada’a and Lume districts southeast of Addis Abeba, in Oromia Regional State, 1,088 smallholders were tending trees supplied by public nurseries. The seedlings are free, and the farmers received subsidised soil and water tests. Those who want extra saplings can buy them for 50 Br to 120 Br from donor projects or private nurseries prized for reliable quality.
Farmers already feel the problem.
“Seedlings are expensive, and the current varieties need heavy watering and compost,” said Mengistu Tesfaye, manager of the Southern Ethiopia’s Kayu Fruits & Vegetables Cooperative Union. “We also don’t have enough variety to meet market needs.”
According to Mengistu, intermediaries often dump ripe and unripe fruit together in flimsy sacks, bruising the crop.
“It ruins the fruit and sometimes damages future harvests,” he told Fortune.
Transport is another headache. Avocados travel best in cold trucks, but refrigerated vehicles are scarce. Even so, Mengistu said the Union has sold 55,000Kg this year, including 33,000Kg to a company operating in one of the industrial parks, and hopes to hit 70,000Kg by December. National shipments remain small but are inching up.
“Our exports have grown from eight to 14tns in two years,” said Wale Getaneh, project coordinator at the Ethiopian Horticulture Producer Exporters Association.
Prices rose to 5.7 dollars a kilogram from 3.6 dollars. An eight-tonne sea consignment recently left for Rotterdam, the Netherlands, to test the waters. The trip took 36 days, slowed by delays in securing refrigerated containers, but the reception in Europe was positive.
“I advise the private sector to invest in avocado exports,” Wale said. “The government should offer incentives to make this sector attractive.”
Nonetheless, exporters with more than hope have found the path rocky.
Rahewa Mohammed, who has been in the trade for three years, sources most of her fruit from Mizan Teferi in the South West Regional State and Addis Abeba, shipping mainly to Dubai and other Middle East markets. She is active nine months of the year; February, March, and April bring no crop.
“Payment issues and amendments are my biggest challenges,” she told Fortune. “Sometimes, I ship 4,000Kg but receive less than that. I don’t find out until it arrives.”
It takes months for her to settle the difference. Documents travel with the fruit; she risks losing her investment if anything goes wrong. At times, she said, she is not paid at all.
Elias Gulilat left the business after a year. His Turkish buyer came to Ethiopia but left empty-handed because he did not get the variety he wanted.
“Even worse, we shipped to people who disappeared after receiving our produce,” he said.
Finding rogue buyers can be slow, even when organisations such as the Addis Abeba Chamber of Commerce & Sectoral Associations intervene. According to Zekarias Assefa, the deputy secretary-general, the Chamber steps in by contacting embassies or foreign chambers to track down errant buyers.
Ethiopia’s wager on avocados is bold, and the potential rewards are large. Demand for the fruit has surged worldwide, and the country’s highland soils and mild climate can yield three harvests a year. But bridging the gap between orchard and overseas supermarket will require better roads, cold storage, trustworthy trade partners and the overlooked skill of delivering a ripe avocado without bruises.
Backers of the new strategy say it can work if every link in the chain — from nurseries to shipping lines — tightens up. The government is betting that a humble fruit can mint millions in hard currency and still leave enough on local plates.
Addis Abeba’s Parking System Goes Cashless
Addis Abeba’s municipal authorities are rolling out a digital overhaul in urban transport infrastructure, targeting what has long been a cash-heavy, allegedly graft-prone parking system. Through the Addis Abeba Traffic Management Authority (TMA), a new cashless payment platform has been launched in 10 parking lots, eliminating manual paper receipts and laying the foundation for a fully digitised parking ecosystem.
“This’ll completely remove cash handling from the process,” said Mulugeta Degefu, the Authority’s technology officer, who administers the new platform.
The digital parking system operates through a mobile application developed internally. Drivers should first register their vehicles to access the service. Upon entering a parking lot, they log their license plate number into the app. When leaving, they re-enter their number, triggering an automated system to retrieve the parking duration and fees charged. Drivers then receive text messages confirming entry, exit, and the amount payable.
Fees are set at 20 Br for half an hour, with an additional daily interest charge of five percent for late payments made beyond a 24-hour grace period. Payments are exclusively processed through the Commercial Bank of Ethiopia (CBE), using either CBE Birr, CBE Plus, or in-person transactions at bank branches.
The TMA say the new system is designed to boost revenue while also eliminating the millions of Birr spent annually on printing paper receipts, a major channel for alleged embezzlement. They hope that automation ensures transparency and accountability, addressing longstanding irregularities in parking revenue management. The Authority struggled with issues such as unpaid invoices and widespread under-collection by service providers.
“It’ll save the entire cost of printing paper,” Biniam Getachew, director of Parking Traffic Infrastructure Management said, estimating annual savings of between four million and six million Birr.
Last year, the Authority collected eight million Birr from parking associations, but with the new digital platform, they anticipate revenues to double or even triple.
Over 600 digital tablets have been distributed to traffic officers to issue electronic penalties. Over the last nine months, the TMA has collected over 700 million Br from parking fees and traffic penalties combined.
Under the old system, parking charges varied widely, ranging from 10 Br to 20 Br an hour, subject to arbitrary discretion by local parking associations and their members. The new digital model standardises rates, although pricing may vary based on location, with higher fees in central city areas and lower charges in suburban districts.
Biniam disclosed that Addis Abeba currently has 353 parking associations, with over 2,800 operators involved. Each operator has been provided with a smartphone and training to facilitate the implementation of the digital payment system, restricted exclusively to registered locations.
The shift to a digital system aspires to meet the federal government’s broader financial modernisation strategy, the National Digital Payments Strategy (NDPS), to create a cash-lite and financially inclusive economy. However, the digital parking platform currently excludes vehicles registered outside Addis Abeba, as their information is not captured in the local database.
“They can only pay in cash once,” Mulugeta told Fortune, disclosing the mandatory registration requirement.
The Authority has registered over 700,000 vehicles and more than one million drivers in the capital.
According to Biniam, the system is already demonstrating benefits despite initial irregularities, including operators allowing unauthorised vehicles without issuing receipts or fully reporting collections. Payments are now swiftly deposited into operators’ accounts within days, encouraging compliance and timely reporting. He noted the digital approach addresses recurring issues tied to parking associations’ two-year permits. After two years, associations claim insufficient funds and lose interest.
“This system solves that problem,” he told Fortune, “ensuring steady revenue flow and accountability.”
According to Mustofa Abdella, an economist from Zafer Plus Business & Investment Consultancy Services, while no system is completely fraud-proof, the digital platform substantially curtails malpractice through automated time tracking, centralised payments, vehicle licensing integration, and real-time monitoring. He recommended regular security updates to address potential vulnerabilities.
Behailu Tamiru, economist and vice president at St. Mary’s University, echoes his views. He believes past issues of a lack of structured documentation can be addressed through drivers and operators held to account, with the increasing prevalence of digital payment systems in sectors such as document authentication. While recognising reasonable revenue projections from the digital transition, Behailu was reluctant to see the merit of payments limited to the CBE.
“This may pose challenges for users,” he said. “They may eventually seek alternative options.”
Hussen Ahmed, a supervisor at Master Trading Plc, oversees digital parking operations in various areas. He transitioned from human resources and joined the company five months before the digital shift.
“People want the payment system to be available beyond the CBE,” he told Fortune. “They prefer the option to use other banks.”
Meseret Alemu, a driver who has worked for an NGO for over a decade, frequently uses multiple parking areas daily. He recalled an incident two weeks ago at the Merkato Maslemiya area, where confusion over unclear parking rates led to a heated dispute. He remembered paying 30 Br.
“The parking attendant began cursing and left the money,” he said.
The next day, Meseret discovered his car’s tyre had been punctured.
“If there were a fixed rate, this wouldn’t have happened,” he told Fortune, welcoming the digital system, praising its potential to establish consistent and transparent pricing.
Biniam assured that unauthorised attendants would be phased out and that marked parking areas would be designated. Already, parking spaces along major city roads have been visibly demarcated.
Among the private companies active in the digital initiative is Master Trading Plc, managing over eight parking locations with 150 attendants in areas including Bole, Japan, Skylight, and Qebena. The company secured its management contract from TMA through bidding. Its General Manager, Abdulselam Jirga, whose company draws from international experiences such as in Canada, commended the digital payment and smart parking initiative for enhancing customer confidence.
“There were constant disputes over payment amounts,” he said. “Improved lighting and camera installations further improved safety and operational order.”
Further changes include the Authority’s preparations to install electric vehicle (EV) charging stations in prime locations across the city.
“We’re identifying the locations,” disclosed Biniam. “Selections will be based on traffic flow analysis and strategic accessibility.”
Abdulselam confirmed his company’s early involvement. Four EV charging stations have already been installed and are awaiting transformers to begin operations.
Addis Abeba hosts 150 smart parking facilities either operational or under construction. These government-developed spaces offer integrated services, combining parking and EV charging capabilities in one hub. Biniam described these as comprehensive “all-in-one” parking solutions.
The traditional street parking system, often chaotic and unauthorised, is being gradually phased out. High-traffic streets, such as Mexico, Bole, and 4 Kilo, will entirely prohibit roadside parking. Designated street parking would follow official standards, and a steep fine of 3,000 Br would be imposed for violations.
The economist Mustofa viewed the digital parking system as a step toward reducing cash-based transactions and preventing revenue leakage. Praising savings on substantial operational costs, he observed that the platform addresses the discrepancy between vehicle density and historically low parking revenue. However, Mustofa pointed out challenges such as high initial setup costs, technical vulnerabilities, and adjustment difficulties among users and operators.
“The system’s success depends in large part on reliable digital connectivity, given inconsistent infrastructure in some city areas,” he told Fortune.
Siinqee Bank Accelerates Growth, Struggles to Convert Scale into Profit
Siinqee Bank has burst confidently from microfinance trenches into the competitive commercial banking industry, posting an impressive profit surge that outshone many peers. Its net profit jumped by 82.7pc during the financial year ending June 30, 2024, displaying a rapid growth trajectory that few of its generational counterparts could match.
Nevertheless, while its deposit base grew explosively, Siinqee Bank’s lending operations faced substantial limitations, mainly due to the National Bank of Ethiopia’s (NBE) regulatory credit growth ceiling. This has turned what could have been an expansive lending opportunity into a delicate liquidity balancing act.
“We’re dominating interbank and open market operations now,” said founding President Neway Megersa, pointing to how Siinqee has adapted creatively to these lending constraints.
The Bank is increasing its activities in the emerging money markets, turning policy-induced constraints into new revenue streams.
Deposits nearly doubled from the previous year, reaching a substantial 46.8 billion Br. This surpassed the 37.5 billion Br mobilised by Tsedey Bank, a direct competitor in the same generational bracket. Yet, Siinqee Bank’s loan portfolio did not keep pace with this deposit growth, increasing only by 12.3pc to 27.73 billion Br. By contrast, Tsedey’s loan book stood substantially higher at 43.1 billion Br.
Siinqee Bank allocated roughly 38pc of its new loans to agriculture, a performance that is in line with its original microfinance mission. According to its Board Chairperson, Tolessa Gedefa, this aligns with Siinqee’s broader mission of inclusive finance. Though Tsedey Bank reached over one million microfinance clients during the same year, Siinqee served a substantial 200,000 during the same year, demonstrating its continued commitment to smaller-scale financing.
Despite these challenges, Siinqee Bank experienced remarkable scale growth. Total assets increased by more than 72pc year-over-year (YoY), reaching 59.7 billion Br. The Bank’s extensive network now includes 544 branches, second only to the Cooperative Bank of Oromia, and boasts 6.25 million depositors, making it increasingly important in the financial sector.
However, beneath these impressive headline numbers, the Bank’s conservative lending approach has stifled capital productivity. Its loan-to-deposit ratio fell sharply from 96.9pc to 55.1pc, well below industry averages of 70pc to 80pc. Industry analysts say this represents an underuse of available resources, potentially affecting long-term profitability.
Neway acknowledged these limitations but spoke of the strategic decision to shift towards bonds and treasury securities during lending restrictions.
Interest income rose sharply by 56.1pc, totalling 5.01 billion Br, reflecting a strategic shift toward treasury securities. Bond holdings increased from zero to 2.12 billion Br, and treasury bills climbed dramatically to 6.8 billion Br from 1.34 billion Br the previous year.
Siinqee Bank increased its cash and cash equivalents to 15.34 billion Br, representing nearly 26pc of its total assets, up from 20.7pc the previous year. While this buffer helped Neway and his team manage liquidity risks, analysts warn that the strategy might undermine profitability unless the Bank strategically deploys these funds.
However, profits benefited notably from its expanded scale. Gross profit rose to 677 million Br, up 85pc, while after-tax profits climbed to 520 million Br.
“It’s a windfall likely to please shareholders,” said Abdulmenan Mohammed (PhD), the London-based financial analyst.
Return on equity (RoE) improved to 7.75pc, and return on assets (RoA) reached 1.43pc, marking substantial growth from the previous year. However, these figures remain far behind those of industry leaders.
Siinqee Bank’s capital-heavy yet profit-light profile is evident. It recorded a net margin of 9.2pc and asset turnover of 9.4pc, coupled with a high equity multiplier of 6.65 times, resulting in a relatively modest return on equity of under six percent. According to industry analysts, this pointed to leverage, rather than operational efficiency, as primarily responsible for its improved profitability.
Siinqee Bank notably allocated considerable loans to major projects such as Belema Resort, Ovid Real Estate, Kegna Beverages, and Kegna Agricultural Machineries. However, the overall slow growth in loans pulled the crucial loan-to-deposit ratio, leading experts to state concerns of idle capital.
Operational efficiency remains another challenge. Personnel costs now account for 43.5pc of total expenses, with administrative overheads adding another 21.2pc. Together, these consume nearly two-thirds of the Bank’s cost structure, which could pose vulnerabilities if revenue growth slows. Profit per employee stood modestly at over 53,000 Br, uncovering productivity issues despite a 21pc increase in staffing.
Abdulmenan raised particular concerns over rapidly rising wage costs and operating expenses.
Neway defended the rise in wages and benefit adjustments as necessary during Siinqee Bank’s critical transition period from microfinance to commercial banking. He remained optimistic that expenses would stabilise as the Bank matures.
Impairment losses on non-loan assets notably surged to 135.7 million Br from eight million Birr previously, although impairment losses on loans improved, dropping from 205.9 million Br to 135.1 million Br.
Analysts warn that the sharp rise in impairment losses on non-loan assets should signal deeper balance sheet vulnerabilities. Auditors have also raised concerns over asset quality, particularly citing unresolved IT migration balances totalling 1.56 billion Br within “Other Assets,” now totalling 12.4 billion Br, a dramatic 550pc increase. This issue resulted in a qualified audit opinion, casting doubts over internal controls and risk oversight.
According to Neway, the difficulties of transitioning from microfinance include the Bank having cleared considerable “microfinance baggage” and structural deficiencies and writing off remaining problematic loans.
“It was not a green field,” Neway said, recalling the transition period from microfinance institutions.
He disclosed that the team has done commendable work in clearing out bad loans and structural deficiencies.
“It’s cleared up now,” he said.
Neway disclosed that the Bank’s sharp annual deposit growth, from five billion Birr to 23 billion Br and 46.8 billion Br since then, is evidence of strong forward momentum.
“We don’t even want to remember last year’s numbers,” said Neway confidently. “You should see what’s coming.”
Savings deposits rose notably, marking a 64pc increase to 25.63 billion Br, making up 54.7pc of total deposits. Demand deposits accounted for nearly all of the remainder, at 44.9pc, with fixed-time deposits marginal at 0.4pc. Siinqee’s international banking operations generated 49.85 million dollars in foreign currency, a 334pc increase from the prior year, though constrained by limited correspondent banking access and a stubborn parallel market.
Securing government accounts also provided Siinqee Bank with vital stability. Of the 49 institutions within Oromia Regional State, 11 transferred their accounts to the bank.
“We’ve crawled on our knees to get these accounts,” Neway told Fortune, hoping more state institutions would soon follow suit.
The Bank traces its origins to the mid-1990s, when it was incorporated as a savings and credit institution and evolved into Oromia Microfinance Institution. It became a fully fledged commercial bank in April 2022. The transition, spearheaded by Neway, previously a board chairman, was complex but rewarding.
“It’s hard and messy,” Neway recalled. “But, it’s worth it.”
Neway, an economics graduate from Mekelle University with postgraduate degrees from Addis Abeba University, began his banking career at Nib Bank and later served at Oromia Bank, where he worked in strategic management and business development for eight years under Abie Sano, now president of Commercial Bank of Ethiopia (CBE). He also played an instrumental role in launching several regional enterprises under the “Oromo Economic Revolution.”
According to Bogale Feleke, a board director, the difficulties faced during the transition were particularly in meeting regulatory standards and sourcing qualified personnel. He urged regulators to provide special consideration to newly transitioned banks.
Siinqee Bank’s paid-up capital rose modestly by 2.9pc to eight billion Birr, impressive given the regulatory requirement of five billion Birr by 2026, a goal many veteran banks still struggle to meet. Neway acknowledged that the current capital suffices operationally but might limit aggressive growth once regulatory constraints ease.
“I’ve explained it to shareholders,” he said, noting plans to raise subscribed capital in the coming year.
About 70pc of Siinqee Bank’s shares are held by public companies under the Oromia Regional State.
The Bank’s asset growth remained robust, with total assets expanding by over 72pc to nearly 60 billion Br. Notable investments include renovating its headquarters on Tito Street and financing a 15-storey building near the Damu Hotel on Africa Avenue (Bole Road). Premium branches opened within the Oromia Regional Government compound, and new branches emerged across strategic locations such as the Sheger City Administration. Sub-branches were also launched in Sebeta, Holeta, Sululta, Lege Tafo, Sendafa, Dukem, and Asella.
The Bank’s branch network grew by 77 during the year, reaching 544. Its workforce increased by 21pc to 9,760 employees.
One of these staff members is Aschalew Tesfaye, manager of the Ali Birra Branch near the Sar Bet area. He and his team focused on customer service and deposit growth. Despite initial market penetration challenges, Aschalew credited digital banking solutions with easing transactions and appealing to younger, tech-savvy customers.
“Digital tools have helped ease transaction congestion and build customer loyalty, especially with younger, tech-savvy clients that expect real-time banking,” Aschalew told Fortune.
Siinqee Bank’s growing digital capabilities, including adopting Oracle FLEXCUBE core banking and integrating with mobile platforms like TeleBirr, demonstrated an investment in infrastructure. Mobile banking users more than doubled to nearly 282,000, and interest-free banking through Siinqee’s IHSAN grew by over 100pc.
“We’re done with digital advancement,” Neway stated confidently. “It doesn’t get better than this.”
Yet, digital growth alone does not guarantee profitability, particularly amid narrowing industry margins.
Siinqee Bank plans to establish an investment bank and enter the emerging capital market. However, its domestic focus limits its foreign currency base primarily to remittances, constraining income diversification. Its rapid deposit growth and grassroots base, particularly in the Oromia Regional State, present a robust foundation. However, maintaining this trajectory requires addressing lending diversification, balance sheet transparency, and enhancing operational efficiency. Without such strategic shifts, analysts warn, Siinqee Bank risks remaining a high-growth yet modestly profitable financial institution amid evolving regulatory pressures and growing industry competition.
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