Your weekly dose of Ethiopia’s sharpest business, economic, and finance news.
Grab your buna and catch up on what’s moving Ethiopia’s markets and economy this week.
SMEs & Finance: Ethiopia’s $4.2B Credit Gap
Ethiopia’s small and medium-sized enterprises (SMEs) are facing a formidable $4.2 billion financing shortfall, according to a recent landscape study by ACE Investment Advisory and the Global Steering Group for Impact Investment.
The report highlights that around 2.2 million SMEs, particularly women- and youth-led businesses — remain critically underfunded despite strong growth potential. The barriers? Exclusionary lending practices, weak enforcement of supportive policies, and gaps in regulatory frameworks.
Nasreen Mohamedamin, CEO of ACE Investment, described this credit squeeze as a “critical bottleneck” limiting the country’s startup ecosystem and overall competitiveness. In response, a public–private task force is being formed to design national-level reforms to unlock financing for these underserved businesses.
The findings also cast a spotlight on Ethiopia’s new startup proclamation and a pledged 2 billion birr allocation, questions remain on whether these funds are effectively reaching entrepreneurs. Stakeholders emphasize that unlocking inclusive growth will require stronger regulation, better data, and deeper cross-sector collaboration. Encouragingly, early signs suggest the institutional groundwork for an impact investment ecosystem is beginning to take shape. Source: Birrmetrics
Insurance & Aviation: Awash Insurance & Ethiopian Airlines Partner
In a first-of-its-kind digital integration, Awash Insurance and Ethiopian Airlines have teamed up to allow passengers to purchase travel health insurance directly via the airline’s mobile app.
The agreement, signed by Lemma Yadecha, Ethiopian Airlines’ Chief Commercial Officer, and Jibat Alemneh, CEO of Awash Insurance, aims to make travel insurance more accessible, convenient, and reliable. Passengers traveling abroad for business, tourism, or study can now secure coverage for medical conditions and health-related incidents using their mobile devices.
Awash Insurance also shared its financials, reporting 4 billion birr in subscribed capital, 3.5 billion birr paid-up capital, and total assets exceeding 13 billion birr. This partnership is part of a broader push toward digital financial services integration in Ethiopia’s aviation and insurance sectors.
Banking & Central Banking: NBE & Dashen Bank Updates
NBE Appoints New Chief Officers
The National Bank of Ethiopia (NBE) continues its financial sector reform journey by appointing two senior executives:
- Weynshet Zeberga – Chief Markets & Operations Officer. Formerly part of NBE’s Monetary and Financial Analysis Directorate, Weynshet played a key role in laying the groundwork for Ethiopia’s capital market development, including the launch of the Ethiopian Securities Exchange. She is now tasked with strengthening market operations and institutional efficiency.
- Robel Tesfaye – Chief Technology Officer (CTO). Joining from the Ethiopian Customs Commission, where he led major digital initiatives like the Electronic Single Window system, Robel will oversee technology strategy, digital infrastructure, payments systems, cybersecurity, and IT governance at NBE.
The appointments are effective immediately and reflect NBE’s commitment to operational excellence and digital transformation.
IFC Boosts Dashen Bank SME Lending
The International Finance Corporation (IFC) has committed a $10 million unfunded risk-sharing facility to help Dashen Bank expand SME lending in Ethiopia. The facility allows Dashen to extend up to $20 million in loans, with IFC covering 50% of the credit risk on a targeted portfolio, focusing on agribusinesses and women-led enterprises.
The program is supported by the IDA18 IFC-MIGA Private Sector Window (PSW), which provides a first-loss guarantee to mobilize private investment in challenging markets. IFC also continues its advisory support to strengthen Dashen Bank’s SME strategy, underwriting, and risk management framework. In FY2025, IFC committed $605 million to Ethiopia, targeting sectors including agribusiness, telecom, manufacturing, infrastructure, and housing, positioning SMEs as central drivers of inclusive growth.
NBE FX Auctions & Monetary Policy
The National Bank of Ethiopia continues its foreign exchange reform with two key updates:
- Regular FX Auction (Auction No. 18):
- Exchange rate settled at 155.12 birr/USD
- $70 million offered; $145.31 million in bids received — oversubscription signals continued strong FX demand
- Participating banks: 31; allocated FX: 21
- Special $500M FX Auction:
- $455.29 million allotted; $44.71 million remained unallocated
- Marginal rate: 152.0079 birr/USD; Weighted average: 153.2503 birr/USD
- Thirty commercial banks participated
The central bank is gradually building a market-based FX allocation system, though structural foreign exchange shortages persist due to import demand, limited export diversification, and external financing pressures.
NBE Strengthens Monetary Policy Committee (MPC)
To deepen analytical rigor and evidence-based policymaking, NBE has appointed two external members to the Monetary Policy Committee. The newly appointed economists bring strong academic and public policy experience, aligning with international best practices emphasizing independent, technically grounded input. Their inclusion comes as Ethiopia navigates exchange rate reforms, inflation management, and financial sector restructuring.
Dashen Bank Opens New Share Sale
Following approval from the Ethiopian Capital Market Authority (ECMA), Dashen Bank has launched a new share offering. Investors can subscribe via the bank’s head office or through ECMA-licensed brokers. The subscription window is open until March 7, 2018 E.C. Dashen Bank advises prospective investors to review the full prospectus and seek independent financial guidance.
Energy & Mining: Arjo Coal Plant Inauguration
Prime Minister Abiy Ahmed inaugurated the Arjo Coal Processing Factory, marking Ethiopia’s complete replacement of imported coal with domestically produced supply. Local coal will now supply cement, steel, ceramic, and other energy-intensive industries, reducing foreign exchange pressure.
The Arjo facility boasts a production capacity of 200 tons per hour, meeting international standards. The Ministry of Mines credited the success to stronger private-sector participation and government focus on mining. Similar localization efforts are underway in ceramic manufacturing and iron ore development, aimed at reducing FX dependency and strengthening industrial self-sufficiency.
DEEP DIVE: The Day Ethiopia Rebuilt Its Financial DNA
Ethiopia had no stock exchange for five decades. Capital allocation was administrative, banks dominated financing, and private markets were absent. That changed with the creation of the Ethiopian Securities Exchange (ESX) a structural shift redefining how capital is raised and allocated.
The Architecture:
- ECMA: Regulator overseeing licensing, IPO approvals, disclosure, and investor protection
- ESX: Marketplace structured as a public–private partnership; government ownership capped at 25%
- NBE: Hosts the Central Securities Depository (CSD) linking settlements to monetary operations
The exchange launched fully digital: electronic trading, delivery-versus-payment settlement, and dematerialized securities.
First Stress Test: The flagship Ethio Telecom IPO aimed to raise 30 billion birr by floating 10% of the company but only achieved 3.2 billion birr subscriptions. This under-subscription exposed pricing and operational challenges, testing investor confidence.
FX Reform & Monetary Policy: The July 2024 birr float created the structural foundation for a functioning capital market. NBE can now conduct genuine open market operations, moving away from purely administrative monetary controls.
Regulatory credibility, liquidity concentration, IPO valuation discipline, and currency volatility remain risks. Infrastructure exists; now trust and market discipline must compound. Read more
Telecom & Digital: Ethio telecom Launches teleStream
Ethio telecom has unveiled teleStream, a new fiber-based streaming platform, alongside a “Zero-Touch” fixed broadband system. This rollout is part of the Next Horizon: Digital & Beyond 2028 strategy.
teleStream Features:
- 60+ live TV channels, 350+ VOD titles
- Accessible via fixed broadband or SIM
- Works through a Set Top Box (STB) for non-smart TVs
- Runs on local telecloud infrastructure, integrated with telebirr
Fiber Expansion & Digital Ops:
- 14,413 km of metro fiber deployed, capacity for 1.2 million customers
- 79,000+ users migrated from copper to fiber
- Fiber to the Room (FTTR) for high-speed in-room connectivity
- Full digital operations through telebirr SuperApp
The initiative supports households, hotels, schools, healthcare, and government institutions — paving the way for remote learning, digital libraries, and smart city integration while reducing FX dependency.
Stay tuned for next week’s insights, where we unpack more sectoral trends and policy moves shaping Ethiopia’s future.
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