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Author: Digital Editor

Birr’s Gentle Drift Shows Banks Divergent Forex Strategies, Market Strain

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In a week defined by whispers rather than shouts, the foreign exchange market revealed a telling duality of centralised moderation by the National Bank of Ethiopia (NBE) and nimble, bank-level manoeuvring in the retail cash market. Cash-rate data from 29 commercial banks charted a portrait of near-static policy anchors alongside pockets of aggressive play for scarce dollars.

Commercial Bank of Ethiopia (CBE) was at the epicentre. The state-owned behemoth was setting what has become, paradoxically, the lowest benchmark in town. CBE posted the lowest rates, buying greenbacks at 124.01 Br and selling at 126.49, about seven Birr below the Central Bank’s weighted average of 132.84 Br on May 10. To keep sellers interested, the CBE added a 10-Br “bonus,” down from 12 Br a few weeks earlier.

The sweetener signals CBE’s status as a policy tool first and a profit engine second.

Oromia Bank played the opposite hand. On May 10, it offered 134.34 Br for a dollar, the highest in town and a full 10 Br more than CBE’s base. Its forex managers may consider that capturing retail inflows can ease interbank pressures in tight times.

Most private banks chose gentler moves. However, Cooperative Bank of Oromia (Coop Bank) swung the widest, lifting its buy quote from 129.06 Br on May 5 to 130.91 five days later; its standard deviation exceeded 0.75 Br, the highest in the pack. Wegagen and Sidama banks nudged rates upward, though neither matched Coop’s mid-week shifts. Siinqee and Zemen banks stood pat, shadowing CBE’s conservative posturing, but, in the case of the first, without the bonus, an approach that may show thin dollar reserves.

Behind the retail dance was the Central Bank’s auction engine. On May 6, it put 60 million dollars on the block, drawing bids from 16 commercial banks at a weighted average of 132.96 Br.

Regulation remained active in the background. The NBE trimmed its spread to 0.16pc on May 6 after opening the week at 0.25pc, widened it to 0.53pc on May 8, then narrowed to 0.10pc for the final two sessions. Market observers say that by oscillating spreads, the Central Bank could be signalling control at the wholesale level while letting the retail market absorb pressure. Too sharp a move could risk panic; too mild invites speculative runs.

However, the challenge for several banks remains that supply, not sticker price, is the fundamental constraint.

The market’s three tiers — the ultra-conservative, the measured adjusters, and the premium acquirers — appear set to persist. CBE, Sinquee and Zemen banks may continue casting low-price anchors; Coop Bank, Sidama and Wegagen could adjust tactically; Oromia and Lion banks may chase volumes with high bids. Unless an exogenous catalyst jolts confidence — be it a fresh dollar inflow or a policy shift — the Brewed Buck’s descent may remain a soft whisper rather than an open admission of weakness.

Ethiopia’s Aid Reckoning Demands a Homegrown Rescue Plan

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Federal legislators recently summoned Shiferaw Teklemariam (PhD), head of the Disaster Risk Management Commission (DRMC), to explain a new bill designed to streamline the country’s response to emergencies. A defining part of the bill is the introduction of a national fund, financed through 17 distinct ways, that promises to boost the country’s capacity to withstand disasters, including drought, floods and locust swarms.

Shiferaw, appearing before members of Parliament’s Standing Committee for International Relations & Peace Affairs, defended the bill as a means of preserving “dignity, independence and sovereignty.” Yet his pitch inevitably reckoned with a far more disruptive act of aid withholding by the United States. President Donald Trump’s January executive order suspending 90 days of foreign assistance was a shock that saw 5,200 contracts cancelled worldwide and froze 83pc of USAID programmes.

Ethiopia, which received 806.5 million dollars in American aid last year, was particularly exposed. Last year’s funding of 1.2 billion dollars made it the largest aid recipient country in Africa, followed by DR Congo and Somalia.

Washington’s waiver system, intended to shield “lifesaving” projects, only compounded the uncertainty. While food aid was exempt, warehouse fees and driver salaries were not; nutrition programmes won approval, but the supply chains for therapeutic foods did not. Even projects granted waivers were throttled when payments stalled. By February, not a single dollar had reached its destination.

The human cost was swift and brutal. In Afar and Oromia regional states, cholera cases surged past 27,000 as water and sanitation schemes ground to a halt. In Tigray Regional State, over 100,000 displaced people went without water. Health bureaus across the country laid off more than 5,000 public workers, including 10,000 data clerks vital to HIV programmes under PEPFAR, an American support programme launched by President George W. Bush. An estimated half a million patients faced interruptions in their antiretroviral treatments.

Non-governmental organisations (NGOs), which rely on USAID for up to 70pc of their budgets, suspended operations. Sadly, early warning platforms such as FEWS-NET went offline, leaving aid workers without the usual maps and data to respond to crises.

This episode revealed the bitter truth that foreign assistance, however generous, can be unpredictable and politically contingent.

Long a linchpin of American humanitarian engagement, Ethiopia found itself abruptly vulnerable. Legislators were thus right to question why a new federal bureaucracy should be layered atop existing agencies rather than streamline and reinforce them.

Since its elevation to cabinet level under a regulation passed in 2015, under Hailemariam Desalegn, the Disaster Risk Management Commission has been tasked with building a national reserve, financing emergencies independently, and even extending aid to neighbouring countries. Its guiding principle, earmarking three percent of the federal budget, roughly 45 billion Br, for disaster responses, sounds ambitious. Yet, it rests on a precarious foundation.

After the largest drought in the mid-2010s, when close to 15 million Ethiopians depended on food aid, the treasury drained 1.4 billion dollars and sacrificed an estimated 16pc of the federal budget, resources large enough to fund every public university for two years. A decade later, the cost of a severe drought has risen to 1.6 billion dollars. Rehabilitating citizens affected by floods demanded 163 million dollars, and fending off locusts another 240 million dollars. Despite this, the Commission’s own reserve is emptied by September each year.

Established in 2000 with 199 million Br, the Prevention & Rehabilitation Programme has depleted half its capital and never been recapitalised. Parliament budgets 1.7 billion Br annually for early warning bulletins, rapid response and reconstruction, while actual spending has averaged 14.7 billion Br, exceeding allocations by more than sevenfold. Last year, the three core relief schemes were budgeted at 26 billion Br but closed at 31 billion Br, topped up by emergency reallocations and donor cheques.

Indeed, grants have averaged 714 million dollars annually over the past decade, spiking above one billion dollars during the pandemic-locust-conflict trifecta of 2021. However, donor appeals remain lumpy and lag behind the crises they seek to address. In the two years beginning in 2021, conflict, drought and floods displaced nearly nine million people; a swarm of locusts stripped more than 400,000hct of crops and pasture. In 2021 alone, 5.38 million people were internally displaced, the highest yearly total ever recorded.

This pattern of hand-to-mouth budgeting has deep costs. Ethiopia spent a fifth of its health budget on emergency nutrition in 2015/16; repeated shocks have shaved an estimated 0.5 percentage points off annual GDP growth, diverting capital from roads, schools and clinics. Donors still foot more than 75pc of relief costs, and funds typically arrive only after a crisis peaks, which is too late to safeguard livelihoods or prevent asset loss.

One notable exception is the Productive Safety Net Programme (PSNP), launched in 2005. Six years later, its contingency window delivered cash and food to eight million people within weeks of drought warnings. Yet, the Programme depends heavily on external funding. Its reserves pale compared to a climate crisis that shows no sign of abating.

Climate models warn that, without adaptation, Ethiopia could lose up to seven percent of its agricultural output by 2030. Meanwhile, the population grows by two million yearly, stretching food imports and draining reserves. Feeling their own budgetary strains, donors trimmed pledges by 450 million dollars in 2024, citing crises from Gaza to Ukraine.

To break this cycle, federal officials hope to raise close to 10 billion Br annually, a tenfold increase on current domestic outlays. Sceptics warn citizens already squeezed by double-digit inflation may baulk at fresh deductions. However, policymakers’ warning that the alternative is far costlier should be understandable. Money, however, is only part of the solution.

Technical capacity lags far behind ambition. Ethiopia boasts Africa’s oldest national early warning system, issuing village-level rainfall forecasts months in advance. In the 2020 drought, warnings reached district offices even as grain lorries remained idle; centralised procurement delayed truck dispatches by six weeks. Regional bureaus, often understaffed and siloed, lack logistics capacity and remain tied to health and agriculture ministries for equipment.

Scaling up the PSNP with parametric insurance, securitising part of the Fund’s revenue, and inviting the diaspora, whose remittances topped 5.6 billion dollars in 2024, to co-invest could be ideas worth exploring. The government’s first Risk Financing Strategy, covering the years between 2023 and 2030, nods to such instruments but lacks concrete deadlines for implementation. The new strategy plans to substitute improvisation with insurance.

Low-cost contingency funds would handle common floods; a World Bank catastrophe deferral credit of up to 317 million dollars would cover medium shocks; sovereign insurance and budget cuts would address megadroughts costing more than 1.5 billion dollars.

Over the past seven years, Ethiopia has spent an average of 31 billion Br annually on disaster responses, more than its external debt interest bill. Every Birr precommitted to drought relief can remain in classrooms, hospitals, and factories. And in a world where aid is no longer guaranteed, domestic financing is not merely prudent. It should be indispensable. The dilemma remains how to finance it.

Four steps could stand out as urgent.

Plug budgetary leaks, requiring each ministry to tag and publish climate-related spending, exposing chronic underbudgeting. This can be complemented by capitalising on the disaster reserve. A one-off injection equal to one percent of GDP, about 1.2 billion dollars, would underwrite average annual humanitarian bills. Buying time with insurance, subsidies can be funded by shaving two percentage points off rehabilitation overspending. Lastly, nurturing the domestic insurance market, boosting reinsurers’ retention limits, establishing an independent regulator and issuing catastrophe bonds can help.

Soaring Rents, Speculative Land Deals Chokes Addis Abeba

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When the first rays of sunlight hit Addis Abeba, they illuminate two very different realities.

In one, glass towers and sleek condos rise from the skyline, telltales to a city on the move. In the other, rows of tin-roofed homes huddle in narrow alleyways, their occupants stoking morning fires that send plumes of smoke into the air. The distant roar of bulldozers hints at yet another transformation of age-old neighbourhoods razed to make way for gated developments.

This city, home to more than five million people – if we go by the city’s administration’s data – and where 70pc of its inhabitants are under 35, was once a battleground over competing and conflicting revolutionary ideals. In 1975, the Derg regime nationalised all urban land, declaring it public property and determined to annihilate landholders. Decades later, that fateful decision has given way to a rigid leasehold system favouring those with little capital and vast connections.

Public land is parcelled out in opaque auctions and leased at rates beyond reach for most young Ethiopians. What was meant to ensure equitable access has instead turned into a speculative marketplace, where political ties can open doors that remain closed to the unconnected.

Rent consumes anywhere from 40pc to nearly 100pc of a young worker’s income in Addis Abeba. For a modest nine-square-meter shelter, a tenant may pay a monthly 5,000 Br and 10,000 Br, rentals that force many into informal arrangements or push them to the city’s periphery. The capital’s housing deficit now exceeds one million units, even as the construction sector grows at nearly nine percent annually and contributes 11pc of GDP.

However, this boom has done little to improve affordability for the majority.

Formal mortgage financing remains out of reach for most Ethiopians. More than half of home purchases rely on savings groups, family remittances or multiple jobs. Goh Betoch Bank, the country’s sole dedicated mortgage lender, is undercapitalised and overstretched. Fewer than one in four homes is backed by a mortgage, ensuring that housing remains a speculative asset detached from its social function.

Almost two decades ago, the federal government launched the Integrated Housing Development Program, a.k.a the Great Condo Initiative, to provide affordable housing for low- and middle-income families. In theory, the lottery-based system would allocate units at subsidised rates. In practice, units were often flipped four or five times their face value within months of allocation. Intermediaries and lottery winners alike profited, turning public housing into a windfall for the few.

Even those who secured a condominium often found themselves on the city’s outskirts, facing long, costly commutes and limited access to schools or health clinics. Utility bills and transport expenses frequently eclipse the savings on rent, leading some residents to sublet their units or default on payments altogether.

The impact of Addis Abeba’s master plans and corridor developments manifested a recurring theme. When local voices are sidelined, the result is disruption rather than progress. In 2014, the city’s master plan sparked widespread protests when it failed to adequately consult residents of densely populated neighbourhoods like Lideta and Bole.

Expanding boulevards and shiny new districts often come at the expense of corner shops, social ties and the urban fabric that gives the city its character and soul. Amnesty International argued this year, that relocating communities without proper alternatives violated human rights standards. Ironically, similar patterns persist.

However, more inclusive approaches are possible.

Housing cooperatives can receive state-backed credit and legal protections, allowing residents to co-lease land and build collectively. Legislators can pass laws prohibiting evictions unless alternative housing is provided, offering a safeguard for vulnerable communities. These models demonstrate that state intervention and social equity can work in tandem. They have already imposed a levy on vacant houses, hoping to generate revenue for public housing.

Policymakers can refine the leasehold system to serve public interests, restructuring lease terms to favour longer tenures and more transparent allocation processes. Speculative resale could be capped to discourage immediate flips. Legal recognition of community land trusts could empower residents to safeguard their neighbourhoods and invest in incremental improvements without fear of eviction.

Strengthening public housing, especially in centrally located districts, would help bridge the gap between ambition and reality. Streamlining access to credit and expanding the capacity of institutions like Goh Betoch Bank could broaden mortgage availability. Microfinance schemes tailored to housing investments, coupled with technical support for self-building in informal settlements, could harness grassroots creativity.

In the shadow of the high-rises, the walls of informal dwellings bear witness to a land that was once declared public but now feels out of reach. Nonetheless, the story need not end there. By marrying state oversight with community-driven solutions, policymakers can craft a housing policy that honours its revolutionary origins while embracing the demands of a youthful population. The city that was not made for everyone can still become the home its people deserve.

Out of Addis, Digital Dreams Rise

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Two years ago, to the day, a Joy Hack event organised by iceAddis brought together young coders in a creative sprint to design computer games and draft accompanying articles. Held over three days on the fifth floor of a nondescript building, the hackathon drew participants aged 16 to 25, who were confined to the venue for the duration of the challenge. Meals, a kitchenette, and sleeping arrangements were provided to simulate an intensive, retreat-like environment conducive to innovation.

The ambiance, part startup bootcamp, part mountain shelter, encouraged collaboration and creative risk-taking. Among the standout efforts were attempts to recreate the Battle of Adwa as a game. One group, in particular, presented promising animation, graphics, and storyline that promised a bright future: showing early signs of creative depth and technical capacity.

About a year ago, I found myself drawn into the world of blockchain-based gaming, a subculture that was quietly gaining traction in Addis Abeba. The entry point was unexpected. A young colleague, reserved, often glued to his phone, introduced me to a deceptively simple game called Hamster Kombat. What appeared at first to be a routine distraction turned out to be part of a much larger ecosystem of decentralised gaming platforms powered by cryptocurrency.

He urged me to download the game, along with others like it, and my initial curiosity soon gave way to a deeper fascination. These games, often dismissed by outsiders as idle time-wasters, were in fact gateways into a parallel digital economy, one where players earned tokens, unlocked rewards, and navigated sophisticated play-to-earn mechanisms that blurred the lines between leisure and labor.

At the time, I wrote briefly about this trend in a July 2024 column, but the scale of what I encountered warranted a closer look. To my surprise, there were half a dozen Amharic-language tutorials on YouTube dedicated to these games, each with thousands of views and active comment sections. These were not fringe curiosities. They represented a growing, digitally native subculture operating quietly on the margins of mainstream media and public discourse.

This virtual face of Addis was not easily visible. It thrived in bedrooms, cafés, and shared apartments, anywhere with a stable internet connection. Young people spent hours behind screens, deciphering game logic, strategizing token accumulation, and chasing digital fortunes with a seriousness rarely attributed to play.

To ignore this world simply because it is not visible on city streets or in headlines is to underestimate the quiet evolution of how youth engage with technology, finance, and community. In retrospect, my glimpse into the crypto-gaming landscape revealed not a passing fad, but an emergent digital economy with its own rules, risks, and rewards; arguably as complex and consequential as the offline world it mirrors.

It was within this context that I came across a game titled Rise of the Fearless, themed around the historic Battle of Adwa, I was struck with excitement. I assumed, perhaps too quickly, that it must have been developed by one of the two brilliant young programmers I had met at a recent Hackathon, both of whom had been working on a project under the same name. Their coding skills were impressive, and it made perfect sense that they would attempt to turn a national legacy into a digital experience.

But a quick online search told a different story. The game had been developed by Kanessa Muluneh, a tech and finance entrepreneur with ambitions to raise over 700,000 dollars to launch the game globally. That figure alone was staggering, hinting at a level of scale and vision that is rare in the local gaming scene. My curiosity shifted, who was this woman who dared to mount such a bold venture?

It became clear that my initial assumption had been misplaced. As technically gifted as the Hackathon kids were, they remained newcomers to the global business arena. Their talents in programming were not in question, but the mechanics of fundraising, intellectual property, and international market penetration remained elusive, gateways often controlled not by skill, but by access.

Ironically, when I tested both versions, the Hackathon demo and Kanessa’s published game, the technical quality felt strikingly similar. The difference was not in code, but in context. Kanessa, with her international exposure and entrepreneurial background, operated in a different league. The disparity highlighted a fundamental barrier faced by many local talents: the lack of visibility and access to capital platforms where ideas are scaled into enterprises.

Yet there was something else that set Kanessa’s project apart, a layer of innovation that extended beyond aesthetics or playability. Rise of the Fearless was tied to a blockchain-based algorithm, embedding the game in a digital asset economy. It was not just a game; it was a product with financial architecture, capable of offering players token-based incentives and staking mechanisms. This added dimension elevated the game’s value proposition, transforming it from a historical simulation into a venture-ready digital asset.

Her approach revealed a level of resourcefulness and vision that merited closer examination.

Kennesa’s entrepreneurial journey began in the healthcare sector. As a medical student in the Netherlands, she conducted a study on absenteeism among hospital staff, finding correlations with the lack of affordable childcare. In response the professor posed a challenge in two words: “Solve it.”

She did. She proposed a remote-work platform aimed at reducing absenteeism among mid-income mothers. The platform was eventually acquired for over one million euros by an insurance company, reportedly more interested in eliminating potential disruption than scaling the product.

Her trajectory has since evolved across sectors, from garments to gaming, with a strategy that appears grounded in identifying bottlenecks and offering platform-based solutions. Based in Dubai, where she lives with her family, Kanessa now oversees ventures valued in the millions.

Her public persona straddles entrepreneurial flair and continental aspiration. In interviews, she has emphasized the pan-African vision behind Rise of the Fearless, noting the inclusion of landmarks like the pyramids as a symbolic gesture of shared heritage. While some may debate the cultural implications of such inclusivity, it speaks to a broader trend of reframing African history in digital formats for wider consumption.

Thinking outside the box and pursuing unconventional ideas appear central to Kanessa’s approach. When asked about the source of her creativity, she described it in practical terms: “I look for problems that are headaches for everyone, and then I try to solve them.” This pragmatic focus on solving inefficiencies has shaped much of her work in product and business development. It stands in contrast to a marketplace often saturated with replicated models and safe bets, even if her methods also come with their own set of assumptions and advantages.

Kannesa’s work raises timely questions about the digital divide, both within African countries and between diaspora-led initiatives and homegrown innovation. The juxtaposition of her blockchain-powered gaming platform with the promising but resource-constrained efforts at Joy Hack highlights the growing gap in access to capital, infrastructure, and global visibility.

Her career, while marked by significant achievements, also points to the structural disparities that continue to shape who succeeds in tech entrepreneurship, and who remains overlooked. As more young innovators emerge from local programs and hackathons, their long-term success may hinge not only on their technical skills but on how effectively ecosystems like ICEAddis can bridge them to broader markets.

Sharia-Compliant Banks Lose Ground as Interest-Free Windows Sweep the Market

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Global Islamic finance, rooted in the prohibition of interest (riba), risk-profit sharing, asset backing, and socially responsible investment, grew to roughly 3.1 trillion dollars last year, growing by about 10pc annually. Sadly, Ethiopia’s experiment with fully-fledged Islamic (Sharia-compliant) banking has fallen short of its promise.

The National Bank of Ethiopia’s (NBE) directive issued in 2019 to license “interest-free banking (IFB) business” finally opened the door to Sharia-compliant lenders, long anticipated by the country’s sizable Muslim population. Yet, three years after ZamZam Bank became the first such financial institution to open its doors in April 2021, followed by Hijra and Rammis, these newcomers are struggling to match expectations.

The Central Bank’s Financial Stability Report for 2024 revealed that conventional commercial banks operating interest-free windows had amassed 73.4 billion dollars in deposits and disbursed 37 billion dollars in financing. Excluding the state-owned Commercial Bank of Ethiopia’s CBE Noor division, the IFB arms of five medium-sized private banks, categorised as such in the 2024 Financial Stability Report, mobilised 73.4 billion Br in deposits and disbursed 37 billion Br in financing as of June 2024. Notably, the IFB arms of Bank of Abyssinia, Cooperative Bank of Oromia, and Dashen Bank each raised more funds individually than all full-fledged Islamic banks combined. The Coop Bank alone mobilised 18.6 billion Br in deposits and provided 14 billion Br in financing, surpassing the aggregate performance of ZamZam, Hijra and Rammis.

Industry insiders attribute this gap to several factors. Conventional banks that launched interest-free windows enjoyed a “first-mover advantage,” drawing customers before full-scale Islamic banks entered the market. New entrants have been unable to lure those customers away. Full-fledged Islamic banks operate under the same regulatory framework as interest-based institutions, a mismatch that inhibited their liquidity management.

The Central Bank’s recent rule allowing short-term interbank lending is interest-based and thus “inaccessible to IFBs,” cutting off a vital funding mechanism.

Behind the scenes, product homogeneity has eroded the appeal of dedicated Islamic banks. Globally, such financial institutions offer a broad suite of instruments from profit-and-loss sharing partnerships, to Sukuk bonds, and trade-financing structures. In Ethiopia, however, Murabaha (cost-plus markup) financing accounts for more than 95pc of all Islamic financing activities. Other products promoted on bank websites “exist only in theory.”

Depositors seeking Sharia-compliant investment vehicles that preserve capital against inflation have little to choose from.

The shortage of skilled talent compounds these limitations. Successful Islamic banks require staff versed in Islamic jurisprudence and modern finance. They lack professionals capable of structuring complex Sharia-compliant offerings, managing risk, and educating customers. Yet, full-fledged IFBs have prioritised religious credentials over technical competence, leaving them short on the product development and marketing expertise needed to compete.

The regulator’s strategic dilemma should be the underperformance of Islamic banks. The law issued in 2019 was undoubtedly a landmark move designed to promote financial inclusion, transparency, and entrepreneurship. The regulator now faces pressure to rethink its approach. Several market players argue that bespoke rules are needed to reflect the operational realities of interest-free institutions. Such guidelines might include targeted liquidity facilities or Sharia-compliant interbank instruments.

Full-fledged Islamic banks are considering consolidation, considering the impending NBE’s requirements for a minimum capital threshold set to take effect in June 2026. Smaller banks face a clear choice between raising fresh equity in a market that has yet to embrace them or merging with peers to achieve scale. The prospect of a merger could unlock synergies in product development, back-office operations, and brand-building.

For stakeholders committed to ethical finance, the Ethiopian case offers cautionary lessons. Islamic banking should do more than remove interest to provide real alternatives that meet customer needs. Islamic banks have succeeded in markets from the Middle East to Southeast Asia by pairing traditional products with digital innovation, tapping global capital markets for Sukuk issuances.

Ethiopia’s financial ecosystem, still dominated by conventional lenders, now holds the keys to whether the experiment in interest-free banking will flourish. Policymakers, regulators and practitioners should collaborate to craft a vibrant and inclusive model, one that goes beyond Murabaha markups and leverages risk-sharing frameworks to spur entrepreneurship. Without such interventions, full-fledged Islamic banks risk remaining marginal players while conventional banks continue to dominate the interest-free space.

The Ethiopian chapter has only begun for a financial segment valued in the trillions of dollars globally.

Who Benefits From a Global Dollar?

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President Donald Trump thinks America is only for Americans. The US Dollar, by contrast, is for everyone. Should the BRICS grouping of emerging economies create a new currency, Trump has tweeted, or “back any other currency to replace the mighty US dollar,” they will face 100pc tariffs.

The Chairman of Trump’s Council of Economic Advisers, Stephen Miran, disagrees. On April 7, he told the Hudson Institute that the global use of the dollar has “caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits.” Miran is not the only MAGA (“Make America Great Again”) economist to hold that view. Michael Pettis, not of the administration but influential within it, recently wrote a commentary in the Financial Times, titled “The U.S. would be better off without the global dollar.”

Worldwide demand for greenbacks increases their value. Trump thinks this is a good thing, because strong countries should have strong currencies. But he has surrounded himself with advisers who worry that a strong dollar makes American industry uncompetitive and sends jobs abroad.

Who is right?

When Filipinos, Malaysians, Saudis, Nigerians, Colombians, and pretty much everyone else use dollars to save and invest, they sustain what Valéry Giscard d’Estaing, when he served as finance minister to Charles de Gaulle, testily described as an “exorbitant privilege” for the United States, not an exorbitant cost, as Miran and Pettis believe.

Almost every government issues currency to help pay its bills. Locals accept pieces of paper in exchange for goods and services. Economists call this fragile arrangement “seigniorage.” Consumer prices skyrocket when people lose faith in the local currency and try to dump it, as has happened in countries from Argentina and Venezuela to Sudan and Zimbabwe.

The US is unique in that people everywhere wish to hold greenbacks, so it collects seigniorage on the whole world. The Federal Reserve estimates that foreigners hold more than one trillion dollars, or 45pc of the total currency in circulation. This is a source of cheap funding for the US.

Imagine an American abroad who pays for a hotel room with dollars. A year later, the foreign hotelier uses those dollars to fund his own visit to America. If US prices rise during that year, this amounts to a loan with a negative interest rate Americans get from the rest of the world.

That is not the only way the US obtains funds on the cheap. All over the world, American bonds, and especially the Treasury bills issued by the US government, are used as collateral in financial transactions. Because of this convenience, foreigners are willing to hold Treasuries even if the interest rate is lower than that of other government bonds of equivalent risk and maturity (economists call this gap the convenience yield).

At the end of 2024, foreigners held nearly 8.6 trillion dollars in US federal debt. If its role as collateral means the interest rate on US debt is 0.5pc lower than it would have been otherwise, Americans are saving 43 billion dollars a year. And there is more. If the convenience yield drives the interest rate on Treasuries below the economy’s growth rate, then the US enjoys a free lunch. It can issue government debt without ever having to repay it.

Before speaking to the Hudson Institute, Miran acknowledged that “demand for dollars has kept our borrowing rates low,” and then proceeded to ignore this crucial fact in the rest of his speech. Nor did he consider another advantage of the global dollar. When the US gets into trouble (for instance, after the Vietnam War, or in the tumultuncompetitiveuous weeks following Trump’s April 2 declaration of a tariff war), the dollar’s value declines, and so does the burden of the dollar debts it owes to the rest of the world.

Other countries that borrow in their own currency must pay an interest rate that compensates for this devaluation risk. The US does notd.

Is America’s gain the world’s loss?

Not quite. People around the world benefit from having safe, dollar-denominated assets in which to save and invest. No other economy can provide the same service today.

Europe is the obvious alternative, but its capital market is far more fragmented than that of the US, since only in the last few years has the European Union (as opposed to individual member states) begun to issue debt instruments. China also has a large economy, but its authoritarian political system and widespread capital controls mean that the world is not lining up to hold renminbi-denominated assets.

The dollar is a global currency because American policies and institutions have historically been more reliable than those of most other countries. If MAGA economists think this is a problem, then their boss has a ready-made solution. By imposing tariffs that violate international treaties, speculating about the invasion of allies like Canada and Denmark (to take over Greenland), ignoring court rulings, and threatening to seek a constitutionally prohibited third term, Trump is making the US more like weak-currency, high-inflation countries.

The world’s reaction to Trump’s “Liberation Day” tariffs was unambiguous. The dollar lost nearly seven percent of its value against the euro while the yield on 10-year Treasuries rose by almost half a percentage point. The currencies of emerging and developing countries also plunged, because higher tariffs and a slowing world economy dim their growth prospects.

It is not easy to devise a policy that hurts almost everyone, but MAGA economists have managed this feat. If the global dollar goes down the drain as a result, it will have many mourners.

Mothers’ Cry Echoes Across Borders as the Emirates Step In

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Where traditional birth attendants light a small lamp to guide expectant mothers through the dim corridor, in a country that has cut its under-five mortality rate in half over the last two decades, the fragile progress can be undone by a shortage of clean water, a lack of skilled care or a single bout of malaria in a newborn.

Against this backdrop, Abu Dhabi’s philanthropic circles are quietly advancing what they call a “Beginning Fund,” a United Arab Emirates (UAE)-backed initiative devoted to maternal and child health in some of the world’s most challenging environments.

The Emirates have long made global health a focus of soft-power efforts. Behind the scenes, the Reaching the Last Mile (RLM) program has marshalled millions of dollars to wipe out polio and neglected tropical diseases in Asia and Africa. Senior advisers in Abu Dhabi now whisper of a new vehicle, one expressly devoted to mothers and children, the most vulnerable among us. The idea is to deploy money, know-how and technology in tandem, addressing the stubborn causes of maternal mortality, including haemorrhage, sepsis, hypertensive disorders, and the infectious killers of infants, from pneumonia to diarrhoea.

Such a fund could change lives in places like Ethiopia, a country of over 100 million souls where the maternal-mortality ratio is around 400 deaths for a 100,000 live births, and the under-five mortality rate remains stubbornly at 47 per 1,000 according to a 2023 data. Barriers to healthcare in rural and conflict-torn regions are more than distances on a map. Poor roads, weak supply chains, and seasonal floods each act like toll booths on the road to survival.

Ethiopia’s government has laid out its ambitions in the Health Sector Transformation Plan, a five-year blueprint that stresses antenatal visits, skilled birth attendance and community nutrition programs. However, when famine strikes near the Sudanese border, or fighting displaces thousands in Tigray Regional State, the best intentions can evaporate. Health posts often lack basic medicines; midwives float between posts on motorbikes, carrying nothing more than a handful of oxytocin ampoules and a stethoscope.

In Addis Abeba, where public-sector reforms have expanded urban hospitals, the contrasts are evident. Well-staffed delivery wards stand in sharp relief to clinics farther afield. For many rural mothers, a trip to town means a day lost to travel, and for those in more remote villages, it can mean risking exposure. A “Beginning Fund” tailored to such challenges would need more than dollars. It would have to shore up roads, power generators and data networks, alongside the health workers themselves.

UAE planners are said to be interested in partnerships with established actors, including the World Health Organisation (WHO), UNICEF, UNFPA, and even the Gates Foundation, which has co-funded numerous vaccination campaigns in Ethiopia. The idea is to avoid redundant projects duplicating what is already underway. Instead, fund managers would zero in on the “1000-day window,” from conception through a child’s second birthday, when nutrition and medical care have the most tremendous lifetime impact.

Among the first interventions would be micronutrient supplements for pregnant women, therapeutic feeding for malnourished toddlers, and improved cold-chain systems for vaccines.

Yet, alignment with the national strategy will be critical for Ethiopia’s health policymakers. Programs must fit within our existing structures and respect our priorities. Nothing works if we build parallel systems, without training local midwives, and embedding supply-chain improvements into the government’s own machinery.

Ethiopia’s Health Extension Program already depends on paid volunteers; an influx of outside money could professionalise those roles and ensure that every health post has at least one trained midwife on call. If Ethio telecom can be coaxed into zero-rating health apps – that is, waiving data charges for medical-related traffic – the ripple effects could extend far beyond hospitals, into schools and villages where health literacy remains low.

Still, risks loom. Ethiopia’s unpredictable weather patterns and years of drought followed by flash floods regularly disrupt supply lines. Conflict zones pose even graver threats, where humanitarians warn that access can evaporate overnight when militants or security forces clamp down. Fund managers who fail to design for volatility may find their interventions washed away, literally or politically.

The spectre of inequity also hangs over any large-scale program. Urban centres and moderately accessible regions attract attention, while nomadic pastoralists in Afar or Somali regional states slip through the cracks. To its credit, the UAE’s last-mile programs have tried to map every settlement, helicoptering in supplies where roads do not exist. But that kind of effort can swallow vast sums, and only the most disciplined accounting can ensure that money reaches mothers, not intermediaries.

However, if Abu Dhabi can apply the same rigour to maternal and child health that it applied to its polio campaigns, where global incidence fell by 99pc, then the “Beginning Fund” could prove transformative. Foreign grants often spark domestic budget increases. Under pressure to match high-profile donors, the federal government may find itself allocating more of its own revenues to rural health posts, an outcome long sought by public-finance experts.

More broadly, the health story is a microcosm of Ethiopia’s development aspirations. A generation ago, only one in five rural births occurred in health facilities; today, the figure is closer to one in three. Each percentage point of improvement translates into thousands of lives saved and a healthier workforce. When mothers survive childbirth and infants live past their first year, families build on a foundation that lifts entire communities.

For Mohamed bin Zayed Al Nahyan’s (Sheikh) donors, the stakes are deeply personal and geopolitical. In speeches at the United Nations, UAE leaders have framed their aid as a moral duty. Last year, the President declared they are guardians of fellow human beings. He told the summit that “when a child’s cry goes unheard, we fail in our greatest mission.”

In practice, the “Beginning Fund” would be a test of that mission.

If it unfolds as envisioned, Ethiopia gains more than injection kits and mosquito nets. It could acquire a blueprint for health-system resilience that weathers shocks and adapts to local realities. In so doing, it would offer the UAE a proving ground for an emerging brand of strategic philanthropy, measuring its value not in headlines or photo ops but in years of life saved and futures secured. In the rough and tumble of global health, that may be the most accurate measure of success.

Manufacturing-Led Export Strategies Still Make Sense

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With the spectre of deglobalisation looming large, developing economies are scrambling to devise new growth strategies. The most effective path to development in recent history – specialising in export-oriented, unskilled labour-intensive manufacturing – now appears to be blocked. The model that once propelled the economies of South Korea, Taiwan, Singapore, China, and Vietnam is becoming less accessible for countries in South Asia and sub-Saharan Africa.

What made the traditional development model so successful was its reliance on exports, which enabled countries like South Korea to tap into virtually unlimited global demand, freeing them from the constraints implied by narrow domestic markets. Exporting also fueled supply-side efficiency, and reliance on unskilled labour meant that the benefits of growth were widely shared.

Another key strength of the manufacturing-led growth model was that it ensured productivity gains were aligned with available labour resources, largely owing to the learning-by-doing dynamic that enabled countries to boost efficiency within existing sectors while gradually moving up the value chain. Economies could start with low-productivity exports and, as the workforce became more educated, shift to more skill-intensive and sophisticated export sectors.

Consequently, growth was both rapid and inclusive, and thus more sustainable.

But, those days are long gone, or so it seems. As the world braces for an era of protectionism and deglobalisation, two alternative development strategies have come to the fore. The first, proposed by Rohit Lamba and Reghuram G. Rajan suggests that developing countries – India in particular – should focus on skill-intensive exportable services.

While Lamba and Rajan’s proposal retains some of the advantages of the old manufacturing-led model – tapping into global demand and promoting efficiency – its biggest drawback is that only a minuscule fraction of the workforce can directly benefit from it. Even India, the poster child for this strategy among developing countries, employed less than 2.5pc of its workforce in the sectors that could be considered skill-intensive and tradable in 2024.

For most poor countries, where skilled labour is scarce, such a strategy is simply not viable. And even where it is, pursuing it risks exacerbating inequality rather than promoting economic inclusion.

The second strategy, proposed by Dani Rodrik and Rohan Sandhu, contends that the window for labour-intensive exports has narrowed dramatically, and that emerging technologies like AI and automation will further erode manufacturing’s ability to generate new jobs. In response, they advocate focusing on productivity gains in non-tradable services. Since the bulk of economic activity and employment in developing countries is concentrated in these sectors, this approach has the potential to foster more inclusive growth.

The limitations of such a strategy are twofold.

For starters, new technologies are just as likely to displace workers in non-tradable service sectors as they are in manufacturing. As we have shown in previous research, non-tradable services are not uniformly low-skilled. Some sectors, such as telecommunications, finance, and real estate, are highly skilled and productive. By contrast, sectors like retail trade and caregiving are more accessible to unskilled workers but tend to have limited potential for productivity growth.

This dynamic, famously captured by Baumol effect, means that non-tradable services are unlikely to become engines of sustained, inclusive economic growth in the way that manufacturing once did. To be sure, there may be some exceptions: construction and tourism, for example, are labour-intensive sectors that could become more productive. But these gains typically depend on adopting new technologies that are inherently labour-displacing, thereby limiting their capacity to drive inclusive development.

Where does this leave developing countries?

Surprisingly, while the traditional manufacturing-led strategy is not as effective as it once was, it remains a viable path for today’s poor countries, provided that middle-income countries vacate the export space they currently dominate.

Simple arithmetic helps illustrate this point.

For example, Brazil, China, South Korea, Taiwan, and Mexico account for about two-thirds of low and mid-skilled manufacturing exports, which amounted to about 5.3 trillion dollars in 2023. Over the coming decade, rising wages and geopolitical shifts – especially growing anti-China sentiment – will likely push these countries to move up the value chain or reduce their reliance on exports altogether.

Such a shift could open up space for low-income countries to step in. If they were able to capture even half of the vacated export markets, along with a share of China’s growing domestic demand, which we estimate to be at least half a trillion dollars, they could more than double their current exports to 2-2.5 trillion dollars.

And if low-income countries can do this, it could create 50 million to 60 million jobs in their economies, even if the employment potential of export-led manufacturing is only half of what it once was due to labour-displacing technological change. For perspective, China’s manufacturing workforce of roughly 150 million helped lift the living standards of the country’s 1.4 billion people. Similarly, expanded export opportunities could improve the fortunes of up to half a billion people in today’s poorest countries.

Admittedly, the path has become more challenging, particularly for countries that rely heavily on the United States as a trading partner. But that does not make the manufacturing-led growth model obsolete. Instead, it underscores the need for strategic adaptation. Poor countries should diversify their trade relationships and engage more with middle-income economies to nudge them to vacate the export markets that low-income economies could enter.

Deglobalisation and technological change have accelerated the search for viable alternatives to export-led development. However, a sober assessment reveals a difficult trade-off: high-skilled exportable services may offer dynamism or durability but not broad inclusion, while non-tradable services offer inclusion but limited dynamism. Even if the growth miracles of China, South Korea, and Taiwan can no longer be fully replicated, the traditional strategy of focusing on unskilled, labour-intensive manufacturing exports remains a promising path, and may still offer the best chance of achieving shared prosperity in the world’s poorest regions.

Raising Builders, Not Spenders

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Raising Builders, Not Spenders

Over lunch recently, my husband and I sat with a young friend from one of Ethiopia’s wealthiest families. She was launching her own business, an ambitious venture, not a vanity project, despite having access to a family fortune worth billions of birrs.

Her parents urged her to take a comfortable seat in their sprawling empire. Instead, she is choosing a harder, riskier path: building something of her own. She accepted seed money, yes, but not as a cushion. It was a launchpad. She is working to earn her name, not just inherit one.

Despite being surrounded by vast family wealth, she is not waiting for a slice of the inheritance pie. She is grateful for the foundation her family laid, but she wants to write her own chapter in the family story; one built on vision, sweat, and personal conviction.

My friend enjoyed immense comfort growing up. She attended elite schools and studied abroad. But she was shielded from the hard decisions and risks her parents faced. Business conversations stayed behind closed doors. Her parents believed shielding their children from that pressure was an act of love. They assumed the wealth would be enough.

But she disagreed. Instead of living in the shadow of comfort, she chose ambition. She taught herself the value of work, risk, and persistence. She knows her privileges, access to capital, connections, and insight, but she wants her success to be earned, not assumed.

She is determined that the old saying, “shirtsleeves to shirtsleeves in three generations”, will not become her story. One generation builds, the next enjoys, the third often squanders. Not because the money disappears, but because the mindset that created it was not passed on.

She shared something that stuck with me: children born into wealth often grow up inside a curated world of luxury homes, private jets, and powerful networks. But if this environment is not paired with responsibility, it breeds an illusion that wealth is permanent, effortless, and deserved.

That illusion creates entitlement. And entitlement kills initiative.

When heirs grow up expecting wealth instead of earning it, they often become passive consumers rather than active builders. They inherit dividends but not discipline. They sign documents but do not understand the business behind them. When inevitable crises hit, recessions, competition, failure, they lack the grit to respond.

We have all heard stories: the disinterested heir who mismanages the family company into bankruptcy. The spender who sells off properties to fund an extravagant lifestyle. The empire that crumbles because no one knew how it was built.

That is what my friend is determined to avoid.

She understands that wealth, no matter how vast, is fragile. Without vision, discipline, and purpose, it fades quickly. That is why she believes wealth is not just about money, it is a mindset. And instilling that mindset must start early.

It is easy to give children comfort. It is harder to teach them how to create value. But if we want wealth to last, not just in accounts, but in capacity and contribution, we need to raise capable adults, not just rich kids.

That does not mean denying access to resources. It means giving with expectation. Children of wealth should be encouraged to launch their own ventures, businesses, foundations, creative projects. Even if family capital is the starting point, they must be the ones to shape it, grow it, and learn from the process.

Entrepreneurship, she says, is the best teacher. It demands decision-making, resilience, and humility. It shows you what failure tastes like, and how to rebuild after it. Whether the venture succeeds or not, the lessons are priceless.

Even those not inclined toward entrepreneurship can still add value, by innovating within the family business, expanding into new markets, or driving meaningful social impact. Whatever the path, the key is contribution. Do not just take. Build.

She believes children should be included in the story of how the wealth was built. Taken to factories, meetings, and back offices. Shown the sleepless nights and high-stakes decisions. Told the stories of failure and recovery. That is how they learn wealth is not magic, it is earned.

While studying abroad, she interned in companies to understand what made businesses tick. That exposure shifted her mindset. She deleted her flashy social media. She cut back on luxury spending. Not out of guilt, but clarity. She realized the real flex is not what you buy. It is what you build.

We need to start celebrating young people like her; not for spending wealth, but for multiplying it. That is the legacy worth applauding.

Because wealth is a tool. It can liberate, or it can entrap. It can empower a generation, or ruin it. The difference lies in whether we pass on not just assets, but the ability to create value.

If we want generational wealth to endure, not just in bank balances, but in purpose, skill, and contribution, we must teach the next generation not just to inherit it, but to earn their place within it.

The greatest inheritance is not money. It is mindset.

When a Comment Cuts Deep, Thank the Shadow

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There are moments when a comment from a friend, partner, or colleague strikes a nerve, not with casual irritation but with a jolt of anger or defensiveness. The instinct may be to argue, dismiss, or counterattack. Yet beneath the immediate emotional surge, there often lies an unsettling recognition: the remark may have touched on something uncomfortably true.

This is a classic moment in the drama of human psychology, and it is something brilliant, sometimes bewildering.

Psychologist Carl Jung referred to this hidden terrain of the psyche as the shadow. Rather than being a collection of purely negative or sinister traits, the shadow encompasses all the aspects of the self that have been suppressed or denied. These may include socially undesirable qualities such as envy or selfishness, but also forgotten strength, creativity, assertiveness, or desire that were never allowed expression. The shadow exists as a counterpart to the carefully curated persona presented to the world.

Tucked away in the unconscious, these parts of the self-do not simply vanish. Instead, they surface indirectly, often through projection. Traits disowned within the self may be perceived, exaggerated, or condemned by others. For example, frustration with another’s arrogance may stem from unacknowledged feelings of inadequacy or a buried wish for recognition. Projection is a defense mechanism, one that obscures the source of discomfort by externalising it.

The most disorienting kind of projection, the one that often sparks that defensive fire, occurs when someone else reflects a part of the shadow back, often unintentionally. This is more than an internal reaction; it is an external trigger that activates a deeper, hidden conflict. When a particular comment causes disproportionate irritation or emotional resistance, it may indicate that an unresolved truth has been named. Such remarks can threaten the self-image and challenge the integrity of the persona, prompting instinctive defensiveness.

These flare-ups often reveal more about the receiver than the speaker. A criticism from one individual may be shrugged off, while the same observation from another cuts deeply. The difference lies not in the delivery, but in its resonance with something buried. Emotional defensiveness is a signal that a vulnerable or disowned part of the self has been exposed.

Anger and defensiveness often serve as automatic mechanisms for shutting down psychological discomfort. These reactions act as protective barriers, shielding the carefully constructed self-image from disruption. When an external observation lands too close to an unacknowledged truth, the impulse to reject it outright, “That’s not accurate!”, can be swift and forceful.

Yet beneath that surface response, there may be a quiet, uneasy recognition of its validity. Such moments are profoundly unsettling because they suggest that the identity presented to the world, the curated version of the self, may be incomplete, or even fundamentally flawed.

Jung regarded these moments as invitations rather than threats. Although painful, they mark opportunities for greater self-awareness. That intense reaction, that flash of anger; it is a signpost. Instead of dismissing discomfort, it becomes possible to ask: What part of the self is being defended? What fear or wound lies beneath this reaction?

Not every critique deserves acceptance, many comments are inaccurate or ill-intentioned. However, when a comment strikes with unexpected force and provokes an intense urge to reject it, the reaction may indicate that it touches on a concealed aspect of the self. Such responses can serve as clues, suggesting the presence of unresolved or repressed traits that have not yet been consciously acknowledged.

Ultimately, leaning into these moments, however awkward or painful, is part of the journey toward becoming more whole. By engaging with these reactions rather than repressing them, the process of integrating the shadow begins. This does not involve erasing discomfort or eliminating undesirable traits but rather acknowledging and reclaiming what has long been disavowed. Over time, this work can lead to a more authentic and grounded sense of self, one less easily shaken by external reflections.

Greater familiarity with the shadow makes its disruptions less threatening. When the unseen becomes seen, the need to react with defensiveness or denial begins to fade. And with that, the insights offered, however uncomfortably delivered, become tools for growth rather than sources of shame.

1,058,000,000

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The cash reserve in Birr held by Ethiopost in the fiscal year 2023/24, registering a staggering increase of 259pc from the previous year. However, such an increase was disproportionate to the Enterprise’s operating cash flow (200 million Br) and net income (139 million Br). The supporting cash flow statement does not clearly reconcile how such an enormous increase materialised, particularly as financing activities netted a negative flow of 58.6 million Br.