Good morning!
There is a number under almost every story this week, and it is a price. The central bank sold half a billion dollars in a single sitting to pull the birr back from a record low, and the market read the size, not the signal. Inflation answered with 15.3 percent. Official creditors blessed the Eurobond deal but flagged the warrant buried inside it. And while the bill was landing at home, Ethiopia spent the week shopping abroad, weighing an equity stake in a refinery in Kenya, signing $340 million of export contracts with Chinese buyers, closing its tenth WTO bilateral, and watching Chinese contractors line up for a $12.5 billion airport it still has to find $9 billion to pay for.
Reform has moved past the announcement phase. Everything on the table now has a number attached and someone who has to fund it.
Now grab your buna. There’s a lot on the plate.
Currency & Monetary Policy
The NBE spends four auctions’ worth of dollars in one afternoon
On Thursday the National Bank of Ethiopia allotted USD 500 million at a Special Foreign Exchange Auction, clearing at a marginal rate of 160.2121 birr per dollar, 0.79 birr below the cut-off recorded just eight days earlier. The sale was four times the size of Auction No. 25 on 12 August, which offered USD 125 million and cleared at 161.0050. In one sitting, the NBE matched the entire USD 500 million it had allocated across four bi-weekly auctions for the whole first quarter.
The rate finally moved the other way. The weighted average of successful bids came in at 160.2144, against 161.7994 on 12 August, down 1.585 birr, or 0.98 percent, reversing a run that had taken the auction-cleared rate from 157.00 in late June to a record high a week ago.
But read the bidding, not the headline. Total bids rose 51 percent to USD 710.14 million, yet because the offer quadrupled, bid-to-cover collapsed from 3.76x to 1.42x, the loosest cover since demand began accelerating in July. The spread between the weighted average and the cut-off, 0.7944 birr on 12 August, effectively vanished to 0.0023 birr: banks bid at the clearing price, not above it. The bid range compressed from 4.0074 birr to 0.7497 birr, and the highest bid on Thursday, 160.2500, sat below the previous auction’s cut-off. No bank was willing to pay what winners had paid eight days before.
Allocation broadened sharply: participation fell from 28 banks to 22, but successful bidders rose from 9 to 21, lifting the win rate from 32 percent to 95 percent. Unmet demand still totalled USD 210.14 million.
The auction sat outside the published calendar, and the NBE described it as a monetary policy operation. It follows a period of visible strain, the birr had touched a record low days earlier, and Bloomberg has reported the central bank spending roughly USD 2.2 billion this year defending the currency.
A large enough injection can move the clearing rate. Whether it holds is the open question. The compression of the bid range and the near-zero premium over the cut-off suggest banks read USD 500 million as a supply ceiling for the day, not a change in the underlying balance.
Inflation hits 15.3 percent, the highest since January 2025
The cost of the plate keeps climbing. Annual inflation accelerated to 15.3 percent in July, up from 13.9 percent in June, a fourth consecutive monthly increase and the highest print since January 2025.
Food inflation reached 15.7 percent, with sugar, jam, honey and chocolate up 39.4 percent, meat 21.6 percent, and oils and fats 20.3 percent. Non-food moved faster still, jumping to 14.8 percent from 12.2 percent, led by alcoholic beverages and tobacco, restaurants and hotels, furnishings, and clothing. On a monthly basis prices rose 2.6 percent, against 1.0 percent in June, the sharpest month-on-month move since March 2025.
Sovereign Debt
Official creditors clear the Eurobond deal, and put the warrant on notice
Ethiopia moved a step closer to exiting default. The Official Creditor Committee, co-chaired by France and China, confirmed that the agreement in principle reached with private bondholders in June complies with comparability of treatment and with the terms of the restructuring memorandum, clearing the way for implementation on the USD 1 billion Eurobond that matured in 2024 and went into default in 2023.
The caveat is a New Money Warrant. It gives bondholders the option to participate in a future Ethiopian issuance of up to USD 1 billion at a market-linked rate, with Ethiopia able to settle in cash subject to a USD 90 million cap. Official creditors warned that if the warrant ends up delivering benefits beyond what bilateral lenders receive, they may need to revisit their own terms, and stressed the instrument sets no precedent. Bondholders still have to approve formally.
Ethiopia began restructuring under the G20 Common Framework in 2021 and remains the only country still inside the process.
Capital Market
Wegagen Capital turns a profit in its first full year, and keeps all of it
Ethiopia’s first private investment bank posted ETB 140.99 million in revenue and ETB 46.58 million in profit before tax for the year ended 30 June 2026, its first full year of operations, in results presented to shareholders at Kuriftu Resort in Bishoftu. That implies a pre-tax margin near 33 percent for an institution that only began trading in mid-2025.
Shareholders then approved capitalising 100 percent of distributable profit through a rights issue, with a cash dividend option retained, a reinvestment-first posture rather than an early payout. The firm cited progress in advisory and brokerage and work on governance, technology, risk and market capabilities, but did not disclose net profit, EPS, or revenue by business line.
Context matters here. Wegagen Capital was licensed by ECMA on 21 March 2025 and became the ESX’s first registered trading member on 14 May 2025, founded with ETB 385 million in paid-up capital and 75 percent owned by Wegagen Bank, under NBE Directive SBB/92/2024. Its reporting year spans the exchange’s move from launch to real activity, including Ethio Telecom’s May listing as the first state-owned enterprise on the board. Competition is arriving: ECMA has since licensed Nigeria’s United Capital as the market’s first foreign investment bank.
This is the first full-year P&L any Ethiopian investment bank has ever published, and it answers a question the market has been asking since January 2025: can an intermediary actually make money in a market this thin? At ETB 141 million on 385 million of capital, the answer is a cautious yes.
Banking & Islamic Finance
The NBE starts building a safety net interest-free banks have never had
At the sixth International Interest-Free Banking and Takaful Forum in Addis Ababa, Firezer Ayalew, the central bank’s director of supervision, said the NBE is developing Sharia-compliant liquidity instruments, including a lender-of-last-resort facility and deposit insurance, so interest-free banks can manage liquidity on terms comparable to conventional lenders. A central Sharia advisory board and a broader Sharia governance framework are also in the works, alongside a customised regulatory framework for activities conventional rules cannot handle. All of it sits inside the first National Interest-Free Finance Strategy, still in draft, with another stakeholder consultation planned before it goes live.
The gap being closed is real. Ethiopia’s interbank money market is interest-based and therefore unusable by Islamic banks, which has left them with no Sharia-compliant route to the central bank in a liquidity squeeze. By June 2025 the sector counted nine fully fledged interest-free institutions, four banks and five microfinance institutions, plus 48 conventional providers running windows, with deposits under interest-free services at 379.1 billion birr and takaful premiums at 299.8 million.
Deposit growth was never the constraint on Islamic banking here, plumbing was. A segment holding 379 billion birr of deposits with no lender of last resort and no compliant interbank instrument was carrying a structural risk nobody had priced. This is the regulator finally building the back-end for a sector it already licensed. Source: Birrmetrics
Fintech & Payments
Sybrin enters Ethiopia, and picks a local partner with 800 people
South African financial technology firm Sybrin announced an Ethiopian market entry aimed at the country’s digital payments modernisation, partnering with Moti Engineering, Ethiopia’s largest systems integrator and ATM supplier, with more than two decades in market, over 800 staff, and presence across 105 cities and towns.
The framing is telling. Sybrin’s leadership described the opportunity not as building payment rails, which largely exist, but as the next phase: operational excellence, workflow automation, fraud resilience, digital onboarding, and infrastructure optimisation. The move is explicitly aligned to Ethiopia’s National Digital Payments Strategy 2026–2030.
Ethiopia has spent five years laying rails, EthSwitch, telebirr, instant payments, Fayda. The vendors arriving now are selling what comes after the rails: reconciliation, fraud tooling, onboarding, uptime. That shift, from building infrastructure to optimising it, is a more reliable maturity signal than any transaction-volume headline. Source: Capital Ethiopia
Energy & Regional Investment
Ethiopia weighs a stake in Dangote’s $17 billion Lamu refinery
Ethiopia is among several East African states considering an equity investment in Aliko Dangote’s proposed refinery at Lamu, Kenya, according to Bloomberg. Dangote Group has offered the region a combined 30 percent stake; Kenya is expected to seek about 10 percent, valued near USD 500 million, with Ethiopia and Rwanda also interested. All three participating would put roughly USD 1.5 billion of regional money into the project.
The refinery is planned at up to 700,000 barrels per day, with construction costs of USD 16–17 billion and a wider project value near USD 20 billion including port and infrastructure. It would process Kenyan and Ugandan crude and supply refined products across East Africa.
Ethiopia’s relationship with the group is already deep: Dangote is behind a USD 2.5 billion fertilizer complex in the Somali Region, a project later projected to exceed USD 4 billion, tied to a separate 25-year gas supply agreement worth about USD 4.2 billion drawing on the Calub gas field. Ethiopia’s participation at Lamu has not been confirmed.
Dangote’s refinery lines up $1 billion ahead of what could be Africa’s largest IPO
In the same week, Dangote Petroleum Refinery & Petrochemicals confirmed a USD 1 billion underwriting programme ahead of its planned listing: a completed and funded USD 600 million tranche within the refinery’s private placement, underwritten by Pan-African Refinery Investment SPV, plus a further USD 400 million commitment that activates when the IPO launches. Marob Strategies and Consulting DIFC and Lilium Capital Group structured the programme as co-financial advisers, and are now distributing participation across African and Caribbean sovereign wealth funds, governments and institutional investors. Reuters has described the listing as a potential contender for Africa’s largest IPO.
Two Dangote stories in one week, and together they describe how large African assets are now being financed: regional governments taking equity upstream, African institutional capital underwriting the listing downstream. Source: Reuters / Semafor
Infrastructure
Chinese firms take 15 of 33 shortlist slots for the $12.5 billion Bishoftu airport
Chinese state-owned companies have emerged as leading contenders for construction contracts at Bishoftu International Airport, taking 15 of 33 shortlisted positions across 10 groups, including China Communications Construction Company, China Road and Bridge, CCECC and Beijing Urban Construction Group. Ethiopian Airlines closed prequalification on four packages in April: main terminal and airport facilities, airfield works, supporting infrastructure, and offsite transport links.
No major independent US contractor made the list. The only US-based name is Connecticut’s Lane Construction, owned by Italy’s Webuild, appearing in three packages through a joint venture with Webuild and Türkiye’s IC İçtaş. Washington has been pressing for a bigger American role, pointing to opportunities for Boeing and GE Aerospace as the airline expands.
Contractor selection has slipped from August 2026 to early January 2027 after bidders asked for more time on proposals and financing. Group CEO Mesfin Tasew said the timeline is unaffected.
The financing picture is the harder number. Ethiopian Airlines plans to fund about 30 percent from its own balance sheet, leaving more than USD 9 billion to raise externally. Lenders have signalled interest of around USD 8.5 billion, but nothing major is signed. The African Development Bank is mandated lead arranger with a potential USD 500 million commitment subject to appraisal; the US DFC, EXIM and JPMorgan have shown interest; and Bank of China, China Exim, ICBC and China Development Bank are in separate talks with the airline and the Ministry of Finance. The airport is planned to open in 2030 at 60 million passengers a year, rising to 110 million at full build-out.
Trade
$340 million of Chinese purchase orders, signed in a room in Addis
Ethiopian exporters and Chinese importers signed 33 business-to-business agreements worth more than USD 340 million at the launch of the Export to China forum, organised by the Ministry of Trade and Regional Integration with the Chinese Embassy. The deals cover coffee, sesame, soybeans, textiles and minerals. Trade Minister Kassahun Gofe (PhD) framed the forum as connecting Chinese buyers directly with Ethiopian producers for large-scale purchases, while China’s Ministry of Commerce signalled readiness to buy Ethiopian goods at scale.
Ethiopia signs its tenth WTO bilateral in five months, this one with the UK
Ethiopia and the United Kingdom signed a bilateral market access agreement this week, making the UK the tenth WTO member to sign and the eleventh to conclude negotiations since Addis restarted its accession push. Trade Minister Kassahun Gofe signed for Ethiopia, Ambassador Darren Welch for Britain. The UK joins China, Russia, Argentina, Türkiye, Brazil, Japan, India, New Zealand and Thailand, with India, New Zealand and Thailand all concluding in May, June and July. Ethiopia’s bid has run 23 years; the government is targeting membership by end-2026, and by its own count seven bilateral partners remain.
What the deal does not do is open a closed market. The UK has granted Ethiopia duty-free, quota-free access on nearly everything but arms since August 2022 under the Developing Countries Trading Scheme, covering 99 percent of tariff lines. What it buys is a seat inside the rules, locking in the tariff and services commitments Ethiopia is offering the whole membership, and a partner positioned to support the accession package at the multilateral vote.
The underlying trade is moving anyway. Two-way UK–Ethiopia trade in goods and services reached £865 million in the four quarters to end-2024, up 32.7 percent, with UK exports to Ethiopia up 82.5 percent to £427 million and Ethiopian exports up 4.8 percent to £438 million. Coffee remains the single largest Ethiopian export line to Britain; flowers add over £13 million a year.
Ten down, seven to go, and four of the ten signed since May. That pace is the story, WTO accession has gone from a 23-year background process to something with a visible finish line. The asymmetry in the trade numbers is worth flagging: UK exports to Ethiopia grew seventeen times faster than Ethiopian exports to the UK. Preferential access has been sitting there since 2022; the constraint is supply capacity, not market entry. Source: Kana TV
Diaspora
A US judge clears the way to end TPS for more than 5,000 Ethiopians
US District Judge Brian Murphy in Boston lifted the remaining judicial block on the Department of Homeland Security’s termination of Temporary Protected Status for Ethiopians, following a June Supreme Court ruling that narrowed lower courts’ ability to halt such terminations. TPS was granted to eligible Ethiopians in 2022; DHS announced the termination in December. Murphy had blocked it in April, faulting the process, but rejected the argument that DHS lacked authority under the 1990 statute, consistent with rulings involving South Sudan, Myanmar and Somalia. He did allow plaintiffs to continue pursuing claims that the decision was driven by racial or national-origin discrimination. African Communities Together, which joined the challenge, said conditions in Ethiopia remain unresolved.
The City
NASA-backed study finds Addis black carbon 4–9 times US metro levels
A newly published study supported by NASA’s MAIA project, analysing data from 10 ground stations between 2022 and 2025, found Addis Ababa’s three-year average PM2.5 concentration at 30 micrograms per cubic metre, more than triple the US EPA standard, with black carbon 4 to 9 times higher than in monitored US metros including Los Angeles, Atlanta and Boston.
The pattern tracks daily life: rush-hour traffic and fossil-fuel combustion drive daytime spikes, while nighttime levels stay high from household charcoal and solid fuels, with sharp temporary surges during holiday bonfires. Araya Asfaw of Addis Ababa University, the project’s lead Ethiopian collaborator, noted that emissions persist overnight even as traffic thins. Ethiopia was among the first countries globally to ban internal combustion engine vehicle imports, in 2024, alongside bicycle lane and EV investment.
Source: The Reporter Ethiopia
📘 From the Publications Desk
Ethiopia’s Economic, Financial and Capital Market Reforms, Fiscal Year 2018 E.C.
Our new white paper pulls the reform year into a single document: the macroeconomic and FX overhaul, the financial sector changes, and the build-out of the capital market, sequenced, sourced, and set against what actually shipped versus what was announced.
If this week made anything clear, it is that Ethiopia’s reforms have entered the phase where they are judged on numbers rather than intentions. This is the reference for how the country got here.
📖 Read or download it: Ethiopia’s Economic, Financial & Capital Market Reforms | FY 2018 E.C.
🎧 On the Podcast
A new episode is live, on how ordinary savers can get into real estate without a large upfront cheque.
Ethiopia spent this week finding out what things cost. USD 500 million to steady the birr for an afternoon. USD 9 billion still to raise for an airport whose contractors won’t be chosen until January. A warrant that could reopen a debt deal that took three years to close. A possible half-billion-dollar equity cheque for a refinery in another country, while inflation at home printed 15.3 percent.
And against that, the receipts: a first profitable year from a domestic investment bank, USD 340 million of signed export orders, a tenth WTO bilateral, and a regulator finally building the plumbing under a 379-billion-birr slice of the banking system.
Neither column cancels the other. That is the actual state of the reform, a country that has stopped debating whether to build the market and started paying for it, in instalments, in public.
Keep your coffee strong. See you next Monday. ☕