Ethiopia’s capital markets are lighting the way for economic transformation, fueled by pioneering investment banks, bold reforms, and strategic global partnerships. This week’s updates highlight breakthroughs in private investment banking, agricultural exports, and regulatory advancements, despite challenges like forex constraints and illicit financial flows. Here’s the latest roundup based on key developments.
Macroeconomics & Fiscal Policy
2018 Federal Budget Approved
The Council of Ministers approved Ethiopia’s 2018 fiscal year budget, nearing two trillion birr, on May 28, 2025. Aligned with the Ten-Year Development Plan, it supports national security, boosts production, aids disaster-affected citizens, and funds Sustainable Development Goals. The draft has been forwarded to the House of People’s Representatives for ratification. Read here
Foreign Exchange Auction Results
On June 5, 2025, the National Bank of Ethiopia announced the results of its latest Foreign Exchange Auction, with a weighted average rate of 134.9519 Birr per USD. Twelve banks received their requested allocations, with the next auction scheduled in two weeks. NBE
Development Financing
HPR Approves Loans for Youth and Health
On June 3, 2025, Ethiopia’s House of People’s Representatives approved a $49.55 million loan from the Arab Bank for Economic Development in Africa (ABEDA) to fund agricultural industrial parks and irrigation projects on 8,000 hectares, creating youth jobs. Disbursed in two phases ($20M and $29.55M), it offers a five-year grace period and 20-year repayment term. A separate International Development Association (IDA) loan will enhance technology-assisted health services for women and girls. Read here
Afreximbank Allocates $1 Billion for Ethiopian Businesses
Afreximbank is encouraging Ethiopian businesses to utilize $1 billion allocated over the next year for trade, manufacturing, and infrastructure projects. At a June 2–3, 2025, roadshow in Addis Ababa, the bank highlighted its $4.7 billion in trade facilitation over five years and urged deeper engagement to support Ethiopia’s reforms and currency convertibility. Capital
Financial Sector & Capital Markets
Wegagen Capital Pioneers Private Investment Banking
Wegagen Capital Investment Bank S.C. launched on June 4, 2025, as one of Ethiopia’s first private investment bank with ETB 385 million in capital. Licensed by the Ethiopian Capital Market Authority (ECMA) on March 21, 2025, and registered as an ESX trading member on May 14, 2025, it offers IPO underwriting, mergers advisory, and brokerage services. Read here
CBE Capital Joins ESX
CBE Capital Investment Bank, S.C., launched on March 22, 2025, secured Ethiopian Securities Exchange (ESX) membership on June 4, 2025. This enables expanded brokerage services for equity and fixed income securities, bolstered by local and diaspora talent, supporting Ethiopia’s growing financial ecosystem. Read here
CFA Institute Programs Launch in Ethiopia
On June 4, 2025, UNDP Ethiopia’s Innovative Finance Lab joined the launch of CFA Institute Programs with ECMA, ESX, and CFA Society East Africa. UNDP Ethiopia sponsors the CFA scholarship program, fostering ethical finance professionals to strengthen Ethiopia’s capital markets. CFA
Innovation & Startups
Startup Draft Proclamation Approved
The Council of Ministers approved the Startup Draft Proclamation on May 28, 2025, to foster Ethiopia’s startup ecosystem. It enables startups to leverage technology, produce innovative products, and access funding. The draft is now with the House of People’s Representatives for review. Read here
Agriculture & Exports
Agricultural Exports Hit $3 Billion
Ethiopia’s agricultural exports generated over $3 billion in ten months, with coffee contributing $2 billion from 400,000 tons. The Green Legacy Forestry Program prepared 7 billion seedlings, and 24 million tons of fertilizer were procured. Challenges like soil acidity and pest outbreaks are being addressed through aerial spraying and 28 new feed processing plants. EBR
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Investment & Trade
New Investment Incentives Unveiled
The Ministry of Finance issued a directive offering tax holidays of up to 15 years for Special Economic Zones outside Addis Ababa and 10 years within the city, alongside customs duty exemptions for local procurement. The law promotes transparency with quarterly Tax Authority reports and supports sectors like manufacturing and tourism. Capital
Disaster Risk Management
Parliament Repeals Salary Levy for Disaster Fund
On June 5, 2025, Ethiopia’s Parliament repealed a clause mandating salary deductions for the Disaster Risk Response Fund, citing financial burdens on workers. The fund will rely on government budgets, donor contributions, and levies on services like telecoms and digital banking. Birrmetrics
Cryptocurrency Regulation
Ethiopia Prepares to Regulate Crypto Transactions
Despite a ban on virtual currency trading, the Financial Intelligence Service is training experts to monitor unauthorized transactions. Preparations are underway for potential future legalization, with a focus on combating terrorism financing and money laundering, in collaboration with the UN and ESAAMLG. Capital
Illicit Financial Flows
Africa Loses $40 Billion Annually in Extractive Sector
The Economic Commission for Africa reported that Africa loses $40 billion yearly to illicit financial flows in the extractive sector, hindering development. Deputy Executive Secretary Antonio Pedro emphasized local content, resource-driven industrialization, and global collaboration to address this, as discussed at the 2025 Africa Dialogue Series. ENA
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— Written by the StockMarket.et Newsroom
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