Ministry Shifts Gears as Number Plate Change Fuels Debate

Oct 12 , 2025. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

For decades, roads have hosted a vibrant mix of 17 different coloured license plates, each signifying a unique region or category. That palette is now being pared to three standardised colours. Officials say the change will curb fraud, trim costs, and advance regional integration under the African Continental Free Trade Area (ACFTA) agreement, even as they acknowledge that the rainbow of plates reinforced local identity.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PUBLISHED ON Oct 12,2025 [ VOL 26 , NO 1328]