Good morning!
Siinqee and First Addis joined the ESX as trading members six and seven, the pipeline of investment banks now reads like a queue rather than a wishlist. But while the second engine of Ethiopia’s economy keeps revving up on the trading floor, the first one is still carrying the debt: USD 51.8 billion of it, as Finance Minister Ahmed Shide told parliament this week. Add a fuel price jump, inflation slipping back into double digits, Visa planting a regional flag in Addis, Safaricom Ethiopia’s revenue up 58.3 percent, and Ethiopian Airlines walking off with another best-in-Africa award, and you have a week that captures the paradox of this moment perfectly: the reforms are working, and the bills are coming due.
Grab your buna. There’s a lot on the plate this morning.
Capital Market Spotlight
ESX onboards Siinqee and First Addis as 6th and 7th trading members
The Ethiopian Securities Exchange officially onboarded Siinqee Investment Bank and First Addis Investment Bank as its 6th and 7th trading members, marking another step in the gradual deepening of Ethiopia’s capital market. The onboarding ceremony was held at the ESX trading floor in Addis Ababa, with regulators, market participants, and financial institutions in attendance.
ESX CEO Dr. Tilahun Kassahun described the development as a significant milestone, noting that reaching seven trading members signals growing market maturity and investor participation. He stressed that the expansion is not only about numbers but about creating competitive options for investment banks, which strengthens efficiency and choice within the market ecosystem.
ECMA Director General Hanna Tehelku struck a more cautious note. She acknowledged that the foundational milestones have been hit, but flagged that investment account numbers remain very low, a reminder that supply of brokers is now running ahead of demand from retail investors. For commercial banks with investment subsidiaries, she said, leveraging existing infrastructure can support faster integration into the capital market. But accountability, she stressed, remains central.
First Addis Investment Bank CEO Michael Addisu described the onboarding process as “flawless” and credited the regulator and ESX for the support. “To make things happen, we need to collaborate to make the market happen,” he said.
Economy & Debt
Ethiopia’s debt bill hits USD 51.8 billion as domestic borrowing pressure mounts
Finance Minister Ahmed Shide delivered the week’s heaviest number when he presented the Ministry’s nine-month performance report to the House of Peoples’ Representatives Standing Committee on Planning, Budget and Finance. Ethiopia’s total public debt now stands at USD 51.8 billion: USD 33.5 billion external, USD 18.3 billion domestic.
The breakdown matters. Of the external debt, USD 22.1 billion sits on the federal government’s books, with the remaining USD 11.5 billion held by state-owned enterprises. On the domestic side, the federal government carries USD 17.5 billion, while SOEs hold about USD 0.8 billion, a deliberately small number after the macroeconomic reform of July 2024 imposed strict limits on SOE borrowing.
The Minister said foreign exchange inflows are expected to improve in the coming months, citing positive responses received at the recent IMF and World Bank Spring Meetings around budget support, disaster response, and fuel reform financing. He also confirmed that despite the suspension of U.S. aid, which has created pressure on health, education, agriculture, and capacity-building programmes, Ethiopia recently signed an MoU with the U.S. government for more than USD 1 billion in annual mobilisation. Source: Birrmetrics
Double-digit inflation returns
The disinflation story took a hit. Ethiopia’s headline inflation rose to 11.7 percent in April, up from 9.4 percent in March, breaking back into double digits for the first time since December 2025. Food inflation accelerated to 13.5 percent, while non-food inflation reached 9.1 percent.
The reversal is being driven by two forces working together. Globally, the ongoing Middle East conflict has disrupted energy markets and shipping routes, raising import costs for fuel-dependent economies like Ethiopia, which imports 100 percent of its petroleum products. Domestically, those higher prices have been passed straight through to retail fuel rates, which then ripple through transport, logistics, and food distribution.
Transport prices were up 13 percent year-on-year, with housing, water, electricity, gas and other fuel-related costs also rising sharply. Food, which accounts for more than half of the CPI basket, is the heaviest weight on household budgets, with prices climbing across meat, vegetables, edible oils, dairy, sugar, coffee, and non-alcoholic beverages.
The reform-era stabilisation isn’t reversed, inflation is still well below the 20-plus percent levels of the recent past, but it’s clearly fragile.
Fuel prices adjusted upward, twice
The fuel pass-through was sharp and fast. On April 1, white diesel rose to 163.09 birr per litre and gasoline to 142.41 birr. By early May, white diesel hit 180.46 birr per litre and gasoline 167.50 birr. Kerosene and jet fuel jumped too. Two upward revisions inside five weeks is the clearest sign yet that Ethiopia’s pricing formula is now tracking global oil markets closely, with limited buffer for households or businesses.
International Partnerships
Italy-Ethiopia trade grows as Rome bets on reform
Italy is going long on Ethiopia, and the numbers are starting to back it up. In an interview with Capital Ethiopia, Claudio Pasqualucci, Trade Promotion Commissioner at the Italian Embassy in Addis Ababa, said bilateral trade in 2025 did not quite reach €400 million but is on a clear upward trajectory, with Rome’s stated goal of doubling exports within two to three years.
Italian engagement now spans multiple layers. SACE (export credit) and SIMEST (joint venture incentives) are active again in Ethiopia after pulling back during the COVID-era instability. The bilateral debt restructuring agreement signed in March 2026 has materially shifted risk insurance premiums for Italian firms. Italy is publicly supporting Ethiopia’s WTO accession. And the opening of Ethiopia’s banking system to international circuits, allowing investors to repatriate revenues, is what Pasqualucci described as a game-changer.
Big Italian names are already lining up around Bishoftu Airport (the USD 12.5 billion aviation project) and the Koysha Hydroelectric Project, with SACE and Cassa Depositi e Prestiti (CDP) reportedly ready to anchor the financing structures. Over 20 Italian companies participated in Big 5 Construct Ethiopia 2026.
The bigger picture: Ethiopia is no longer just receiving Italian aid or hosting Italian conferences. Italy is now embedding capital, financing institutions, and supply chains into the country’s reform programme. Source: Capital Ethiopia
Ethiopia, Nigeria sign commodity finance pact
The Ethiopia Commodity Exchange signed a cooperation agreement with the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) on May 7, aimed at deepening agricultural financing, modernising commodity trading systems, and strengthening cross-border trade links between two of Africa’s largest economies.
The MoU establishes a framework for collaboration in warehouse receipt financing, commodity quality assurance, risk management systems, and digital trading infrastructure. It also includes technical knowledge exchange and efforts to improve market transparency and liquidity.
ECX CEO Mergia Bayissa said the partnership would support the upgrading of commodity exchange systems and warehouse receipt financing. NIRSAL, backed by the Central Bank of Nigeria, was created to reduce lending risks in agriculture and encourage commercial banks to extend credit across Nigeria’s agricultural value chain.
The agreement matters in a regional context: African commodity institutions are increasingly seeking integration under the AfCFTA framework, and this is a step toward sophisticated cross-border financing mechanisms to reduce post-harvest losses, improve farmer access to credit, and grow intra-African agricultural trade. Source: Birrmetrics
Manufacturing & Industry
Over 57 billion Birr of arrangements at ‘Made in Ethiopia’ Expo
The 4th “Made in Ethiopia” Expo 2026 at the Addis International Convention Center wrapped up the previous week with over 57 billion birr in marketing arrangements between manufacturers and 16 government institutions, according to Industry Minister Melaku Alebel.
More than 350 industries participated across the five sectors, including 20 start-ups encouraged to display alongside established firms. 22 industries showcased innovative products, and more than 12,000 marketing arrangements were concluded between manufacturers.
The Minister framed the expo as a showcase of the government’s attention to the manufacturing sector, declaring that self-sufficiency is “a matter of survival and sovereignty” and that leveraging artificial intelligence for productivity and innovation is key to the future. He also announced a decision to improve financial access for actors in the sector, an acknowledgment that financing remains the sector’s biggest constraint. Source: ENA
Telecom & Tech
Safaricom Ethiopia revenue jumps 58.3% as customer growth and data usage accelerate
Safaricom Ethiopia delivered one of its strongest performances yet in the financial year ended March 2026. Revenue rose 58.3 percent to KShs 14.1 billion (about USD 109 million), customer numbers grew significantly, and EBITDA losses narrowed by 64.8 percent year-on-year, the clearest sign yet that the Ethiopia operation is approaching a commercial inflection point.
In local-currency terms, the picture is even more striking. Strip out the 23.7 percent depreciation of the birr against the U.S. dollar, and service revenue grew 130.9 percent in ETB terms. Three-month active customers reached 13.6 million, up 54.2 percent, supported by a stronger network now covering 60 percent of the population through 3,504 sites.
Mobile data has emerged as the backbone of the model: 67.9 percent of service revenue now comes from data services, with voice contributing 21.4 percent. The shift away from voice-centric telecom is one of the clearest data points anywhere on Africa’s leapfrog into digital services.
Safaricom Group CEO Peter Ndegwa said Ethiopia is “now starting to become a material part of our group with a 15 percent contribution to the group revenue growth in FY26.” Management has set a concrete target: EBITDA break-even in Ethiopia in FY27. Real net profitability is still two to three years out, but the trajectory is clear.
Visa opens new office in Ethiopia, expands regional role
Visa inaugurated a new office in Addis Ababa, signaling a deeper commitment to Ethiopia and a broader strategic push across East Africa. The Addis Ababa office now serves as a regional hub for six East African markets, joining Nairobi and Dar es Salaam as one of Visa’s key physical hubs in the region.
Yared Endale, Visa’s head of Eastern Africa, said the new location marks “an important next phase” in how Visa engages with the market. Michael Berner, Visa’s head of Southern and Eastern Africa, described it as a reflection of Visa’s strengthened footprint across the region.
The timing isn’t coincidental. Ethiopia’s financial ecosystem is gradually opening, digital payments are growing, foreign banks are being licensed, and the capital market is live. For a global payments network, that combination is the moment to plant a regional flag, not maintain a representative office. Visa’s move is one more vote of confidence from a global institution that Ethiopia’s reform programme is durable enough to plan around.
Aviation
Ethiopian Airlines wins Best Airline in Africa at 2026 APEX Passenger Choice Awards
Ethiopian Airlines was named Best Airline in Africa at the 2026 APEX Passenger Choice Awards on May 4, an accolade based entirely on independently verified passenger feedback through TripIt, drawing on more than one million ratings across 600-plus airlines worldwide.
Group CEO Mesfin Tasew said the recognition holds particular significance because it comes directly from passengers rather than from industry juries. The airline serves more than 160 passenger and cargo destinations across five continents and continues to anchor its Vision 2035 strategy of becoming a top-20 global aviation group.
In a sector where reputation drives load factors and load factors drive cash flow, the APEX win is more than a PR moment. It feeds directly into the airline’s premium positioning at exactly the time it’s expanding its long-haul fleet (six new 787-9 Dreamliners ordered the previous week) and pushing toward the Bishoftu mega-airport project.
Agriculture
Ethiopia’s quiet paradox: the sector that feeds the nation but can’t feed itself
A new analysis based on Ministry of Finance data lays out a structural fault line that has been hiding in plain sight. In FY 2023/24, Ethiopia’s agricultural sector, responsible for nearly a third of GDP, employing almost two-thirds of the population, and generating close to 80 percent of export earnings, received just 2 percent of the credit it actually needs.
The data initially looks less alarming. Between 2020 and 2025, about 8 percent of total loans went to agriculture. But nearly 70 percent of all agricultural lending in 2023/24 came from a single channel: a fertilizer financing scheme run by the Commercial Bank of Ethiopia. Strip that out, and what remains is a thin, stagnant stream of credit, barely reaching farmers, agribusinesses, or the broader value chain.
In other words, much of what looks like agricultural finance is not financing production, innovation, or growth. It is simply financing inputs. And that distinction matters.
The timing is sharp. Total domestic credit grew by over 23 percent in 2024/25, and SME lending nearly doubled. The sector that employs the majority of Ethiopians has been largely left out of that expansion. The Ministry of Finance does not frame this as a minor imbalance, it calls it a structural problem at the heart of Ethiopia’s economic future.
Deep Dive of the Week
Why Bank-Only Financing Is Holding Ethiopia Back and How Capital Markets Change Everything
Ethiopia’s economy has long depended almost entirely on banks for financing, limiting access to capital for startups, innovators, and long-term projects. Banks naturally prefer collateral, established borrowers, and lower-risk lending, leaving much of the private sector underserved.
The launch of the Ethiopian Securities Exchange marks the beginning of a second financial engine. Capital markets allow companies to raise long-term funding through shares and bonds, distribute risk among investors, improve transparency, and create opportunities for ordinary citizens to invest.
Since the exchange launched in 2025, listings such as Wegagen Bank, Gadaa Bank, and Awash Bank, alongside Ethio Telecom’s IPO, have begun introducing an investment culture to Ethiopia. The market is still small and faces challenges like low liquidity and limited investor awareness, but it provides something banks alone cannot: financing based on future potential, not just collateral. Read more
That’s your Monday Breakfast Stories for this week. Two new investment banks at the ESX, a USD 51.8 billion debt bill at parliament, inflation back in double digits, Italian capital piling in, Visa setting up a regional hub, Safaricom Ethiopia closing in on break-even, and Ethiopian Airlines collecting yet another trophy. The second engine is running, but the first one is still carrying the weight. Both have to work for this to land.
Keep your coffee strong and See you next Monday. ☕
