The National Bank of Ethiopia (NBE) has introduced a new directive governing imports made under the Franco Valuta system, aiming to modernize the framework and strengthen oversight of foreign currency-free imports. The directive officially took effect on May 29, 2026.
Franco Valuta refers to the importation of goods without using foreign exchange obtained from Ethiopia’s domestic banking system. The NBE says the system plays an important role in supporting trade and investment without putting pressure on the country’s limited foreign currency reserves. However, the central bank noted that the lack of a modern and unified regulatory framework had created risks including misuse, illicit financial flows, and weak institutional coordination.
Related articles
Under the new directive, a wide range of individuals and institutions are now eligible to use Franco Valuta arrangements. These include licensed domestic and foreign investors, diaspora investors and traders, manufacturing companies, strategic development projects, diplomatic missions, NGOs, civic societies, and government institutions.
The directive permits Franco Valuta imports for various purposes such as capital goods, machinery, raw materials, technology equipment, renewable energy projects, temporary imports, trade fair materials, and warranty replacement goods. It also allows diaspora and foreign direct investment (FDI) traders to import goods for wholesale and retail trade under specified conditions.
To improve transparency and monitoring, the NBE has instructed the Customs Commission to integrate Franco Valuta transactions into the Foreign Exchange Monitoring and Orchestration Unified System (FEMoUS). According to the directive, all transactions must now be digitally recorded and traceable.
The new framework also introduces stricter compliance requirements. Users of the system, except for personal effects imports, are required to maintain valid licenses, submit necessary documentation, keep auditable records, and comply with all relevant laws. Mandatory documents include invoices, shipping documents, and trade or investment licenses.
The directive outlines penalties for violations such as false declarations, misuse of the Franco Valuta system, or attempts to circumvent controls. Punishments may include monetary penalties, confiscation of goods, and criminal liability under Ethiopian law.
Additionally, the annex attached to the directive details the categories of goods eligible for Franco Valuta importation, including diplomatic goods, donations, research materials, investment-related imports, medical supplies, trade samples, and personal household effects under specified conditions and value limits.
The move comes as Ethiopia continues broader foreign exchange and trade reforms aimed at improving transparency, encouraging investment, and strengthening control over foreign currency-related transactions.
