Good morning!
Somebody has to go without. That is the sentence underneath almost every story this week.
The state power producer looked at the water coming into its dams, decided a dry period was on the way, and cut its single largest revenue-generating customer by 75 percent before the shortage arrived. The central bank sold 125 million dollars to two banks out of five that showed up. The interbank market spent two weeks pinned to the floor and then, in one week, banks were paying above the policy rate for cash that had been free the fortnight before. The Treasury took cheap money because banks had nowhere better to put it. And in kitchens across Addis, the rationing happened quietly, in grams: same plate, same price, less on it.
Rationing is what an economy does when the constraint is real and the queue is longer than the supply. What a country reveals in that moment is its order of priorities. This week Ethiopia published hers, over and over, in megawatts, in dollars, in basis points, and in the weight of a loaf of bread.
Now grab your buna. There’s a lot on the table.
Energy & The Grid
EEP cuts data mining by 75 percent, and says the people come first
Ethiopian Electric Power has cut electricity supply to data mining operations by roughly 75 percent, delivering only about 23 percent of contracted volumes against a Power Purchase Agreement commitment of 98 percent, chief executive Ashebir Balcha told the corporation’s annual performance briefing in Addis Ababa on Friday.
The decision was pre-emptive rather than reactive. Hydro supplies 95 percent of EEP’s generation mix, and inflows peak in July and August, with the Grand Ethiopian Renaissance Dam’s own peak falling in August and some flow continuing into September. Forecasts over recent months pointed to incoming water levels falling by at least 20 percent, so EEP moved early, and has since lowered both its revenue and supply projections for the year ahead. As reservoirs draw down, the physics does the rest: the corporation loses up to 50 megawatts of capacity per generating unit.
Ashebir was blunt about the pecking order. Data mining and energy exports are secondary; public and domestic industrial supply is primary. Affected clients have complained. EEP’s answer is that it will not restore their power while leaving Ethiopians in the dark. It will reassess in October, once the new water year’s generation picture is clearer.
Hold that against the money. Data mining generated 50.37 billion birr in the past fiscal year, more than any other customer category on EEP’s books. This is a state enterprise voluntarily switching off its best-paying customer, in hard currency, ahead of a shortage that has not yet arrived.
It also explains a number that looked odd in EEP’s own annual report: capacity utilisation fell to 60 percent against a 67 percent target, even as installed capacity grew 23 percent to 9,730 MW. You can build the plant and still not sell the power, if the water isn’t there and the load you’d sell it to is the one you’ve decided to cut. Source: EBR
The other half of the EEP story: a profit, finally
The briefing carried better news too. EEP collected roughly 119 billion birr in revenue for 2025/26, up 57.8 percent year on year and 92 percent of its 129.8 billion birr target, with a gross profit near 39.5 billion birr, its first meaningful profit declaration after years of losses. The turnaround owes as much to the balance sheet as to the meter: a restructuring shifted some 263.3 billion birr of EEP-related debt off the utility’s books, and the phased quarterly tariff reform launched in September 2024 has been steadily closing the gap between what power costs and what it sells for.
Both halves of that reform are visible in this week’s coverage. The tariff path has drawn real anger from households and businesses watching bills multiply. And the corporation has now shown it will forgo hard-currency revenue when the alternative is domestic load shedding.
For years the critique of EEP was that it built world-class dams on debt it could never service and sold the output below cost. This year it posted a profit and turned down money. Whether that holds through a dry season is the test. Sources: Addis Fortune
Monetary Policy & The Central Bank
Auction No. 27: five banks show up, two go home with dollars
The National Bank of Ethiopia allocated USD 125 million at its 27th foreign exchange auction on 26 August. Total bids reached USD 170.51 million, oversubscribing the offer by USD 45.51 million. Five banks participated. Two were successful. The marginal cut-off, which was also the weighted average of successful bids, settled at 160.2070 birr per dollar, with the highest bid at 160.2071 and the lowest at 160.1833.
The rate is the boring part. The participation is the story. Twenty-eight banks bid at the 12 August auction. Twenty-two bid at the special 500-million-dollar sale on 20 August. Five bid on 26 August, and only two cleared. Demand for dollars has not disappeared, but the birr to chase them with has thinned dramatically inside two weeks.
Read this alongside our deep dive below. A bank that committed a large birr balance at a half-billion-dollar auction six days earlier has less to bid with today. The FX window and the money market are the same plumbing seen from two ends.
The NBE names on hawala
In a public notice issued on 28 August, the central bank warned customers, the diaspora and the general public against unlicensed money transfer agents and illegal hawala networks, publishing a list of unauthorised operators and urging senders to check any provider against the official register of licensed Money Transfer Agents before moving funds. Transactions through unauthorised channels, the NBE said, can result in financial loss, payment delays, account restrictions and regulatory or legal action, against recipients and their families as well as senders.
The timing is not incidental. The notice explicitly cites rising remittance volumes during this period, and remittances have become one of the most important lines in Ethiopia’s external accounts since the float pulled the official rate closer to the street.
Every dollar that arrives through hawala is a dollar the formal system never sees, never counts, and cannot auction. The enforcement drive and the FX auction are the same policy: pull the dollar economy inside the perimeter.
Capital Market
Deloitte becomes Ethiopia’s ninth investment bank
The Ethiopian Capital Market Authority granted an Investment Bank licence to D and T Ethiopia Management Consulting PLC, better known as Deloitte Ethiopia, following completion of its application assessment. The firm previously operated as a Securities Investment Advisor. It is now authorised to provide non-brokerage investment banking services, including facilitating mergers and corporate reorganisations. ECMA was careful to note the licence does not permit it to act as a securities broker or dealer.
Nine licensed investment banks now serve an exchange with six listed securities. That ratio looks strange until you look at what the pipeline actually is: registration statements, prospectuses, capital raises and, increasingly, restructurings. The advisory work exists whether or not a ticker does.
A Big Four firm converting from advisor to licensed investment bank is a vote on where the fee pool is going. Watch the M&A mandate specifically, it is the first sign that Ethiopian corporate transactions are heading for a regulated market rather than a private handshake.
Enat Bank registers 6.79 million shares, and iCAPITAL hits its fifth
ECMA approved the registration of 6,785,310 existing Enat Bank S.C. shares in a notice issued on 27 August, under Article 75 of Capital Market Proclamation No. 1248/2021 and Articles 4 and 29 of the Public Offer and Trading of Securities Directive No. 1030/2024.
The advisory side of that transaction is its own milestone. iCAPITAL Investment Partners says Enat is its fifth completed ECMA registration, after Awash Bank, Zemen Bank, Bunna Bank and Global Insurance. Across those five, the firm counts 82.38 billion birr in subscribed capital, 141.07 million registered shares and 63,778 shareholders brought into the regulated fold.
There is a second thread here worth watching. The registration lands shortly after Enat partnered with I Capital Africa Institute and FSD Ethiopia to structure what is billed as Ethiopia’s first private-sector gender bond, covering structuring, regulatory approval and investor engagement.
The register and the bond are the same strategy at two maturities. Get the equity into a disclosed, regulated system; then use that credibility to issue debt with a thesis attached. A bank that can do both is what a capital market is actually for.
Banking & Governance
The NBE rejects Global Bank’s choice of acting president
Regulators have refused Global Bank S.C.’s nomination of Sahlemichael Mekonen as acting president, amid an investigation into financial irregularities at the lender. Global Bank’s board put his name forward last month after the suspension of president Tesfaye Boru (PhD), which followed an inquiry into hundreds of millions of birr in irregular withdrawals tied to a time deposit account. A letter from Gemechis Dugasa, head of licensing at the NBE, told the board the candidate does not meet requirements under NBE law and directed it to nominate someone else.
The specific bar is a bank president needing at least 12 years of industry experience, five of them as a senior executive officer, plus a graduate degree from an accredited institution. Sahlemichael’s public profile lists over 21 years across CBE, Addis International Bank and Global Bank, and a graduate degree in accounting and finance. As of Friday, the bank’s own website still listed him as acting president.
Context on scale: Global Bank generated over 5.5 billion birr in income and 1.17 billion birr in gross profit in 2024/25, up 33 percent, with profit after tax of 756 million birr against 486 million the year before. It remains among the country’s smallest commercial banks. Source: The Reporter
Fiscal & Debt
The Treasury borrows cheap because banks have nowhere else to go
Ethiopia’s Treasury bill market has been transformed inside twelve months. The weighted average yield at the 22 July auction came in at 9.181 percent, down roughly 61 percent from 15.36 percent in July 2025, and the fiscal year’s opening auction on 8 July raised 30.71 billion birr at an average 9.2 percent, returning T-bill rates to single digits after an extended stretch of expensive borrowing. The Ministry of Finance plans to raise 197.2 billion birr across seven auctions in the first quarter of 2026/27, with roughly 330 billion birr of the 2.3 trillion birr federal budget to be financed domestically, mostly through bills. Birrmetrics reports banks piling in to the tune of 133 billion birr as borrowing costs fall.
The mechanism is uncomfortable if you are a borrower. The credit cap came off in July, banks are theoretically free to lend, and they are still buying government paper, because a risk-free 9 percent beats an unsecured loan they have to underwrite. Crowding out did not end when the ceiling lifted; it just stopped being compulsory.
Falling yields are usually read as confidence. Read them the other way too: the government is getting cheaper money because the private sector still cannot compete for it. The number to watch is not the yield, it is private credit growth alongside it. Sources: Capital
Five reforms stand between Ethiopia and the World Bank’s remaining 500 million dollars
The Second Sustainable and Inclusive Growth DPO, approved in July 2025, is a one-billion-dollar package: a 650-million-dollar IDA grant plus a 350-million-dollar concessional credit. Five hundred million of the grant went out as a first tranche. The remaining grant and the entire credit sit in a second tranche, released against prior actions spanning financial sector restructuring, trade and investment liberalisation, fiscal sustainability and transparency, and social resilience.
Tranching is the point, not a technicality. The Bank designed the disbursement schedule to move at the pace domestic institutions can actually absorb complex reform, rather than paying up front and hoping.
Half a billion dollars, conditional on a checklist. That is a useful frame for reading almost every Ethiopian reform headline this year: someone is watching, and the money arrives after the law does. Source: Birrmetrics
Ethiopia is restructuring billions, and still isn’t in the borrowers’ club
The Borrowers’ Forum launched at the UN’s financing-for-development conference in Sevilla in July 2025, one of eleven recommendations from the Secretary-General’s Expert Group on Debt, with UNCTAD as secretariat. It convened as a Borrowers’ Platform on the margins of the IMF-World Bank Spring Meetings in Washington on 15 April, chaired by Egypt’s finance minister Ahmed Kouchouk. The premise is simple and, to anyone who has followed Ethiopia’s file, familiar: creditors negotiate as a bloc and debtors negotiate alone.
Ethiopia has spent nearly five years inside the G20 Common Framework, reached an agreement in principle with official creditors covering billions in external debt, and watched its Eurobond restructuring stall, restart and stall again over comparability of treatment. It is, on paper, the case study the forum exists to serve. It is not in the room.
There is no obvious upside to sitting out. A country that has absorbed every lesson the Common Framework has to teach is exactly the country whose absence makes a borrowers’ platform weaker. Source: Birrmetrics
Trade
The UK becomes Ethiopia’s tenth signed market access deal
Ethiopia signed a bilateral market access agreement with the United Kingdom, making Britain the tenth WTO member to formally execute such an agreement with Ethiopia and the eleventh to conclude bilateral negotiations. Each of these deals settles tariff bindings and services commitments with one member; the accession package is only complete when the whole set is.
Ethiopia formally applied to join the WTO in 2003. Twenty-three years and one of the longest accessions in the organisation’s history later, the finish line is genuinely in view, with the country repeatedly named among the most advanced of the roughly twenty economies still seeking membership.
The deals are procedurally dull and strategically enormous. Accession would lock the last two years of liberalisation, the float, the open banking sector, the exchange, into a rules-based framework that a future government cannot casually reverse. That is the real prize. Source: Birrmetrics
Institutions & Capacity
The IMF is rebuilding how Ethiopia forecasts itself
The Ministry of Finance is replacing its macroeconomic forecasting framework with the Comprehensive Adaptive Expectations Model, a toolkit from the IMF’s Institute for Capacity Development, tailored to Ethiopia and targeted for completion by September 2026. The Ministry requested the assistance in October 2024, months after the ECF was approved; the work is financed by the government of Japan.
The diagnosis is more interesting than the fix. The IMF’s assessment found Ethiopia’s existing models leaned on basic accounting relationships between sectors rather than economic theory, struggled to represent the liberalisation agenda, and offered little room to test alternative policy scenarios. In plain terms: policymakers had limited ability to model what a rate decision, an exchange rate move or a spending choice would do before they made it.
CAEM will be paired with nowcasting tools, because national accounts arrive only annually and a forecasting team needs more than one read a year, and linked to the Fund’s Debt Dynamics Tool. Fourteen economists from the Ministry of Finance, the Ministry of Planning and Development and the National Bank have been assigned. A parallel programme run by the Fund’s Monetary and Capital Markets Department is doing the equivalent work at the NBE for an interest-rate-based monetary framework.
Ethiopia floated its currency, scrapped its credit cap and moved to a policy rate in under two years, using forecasting tools built for a different economy. This is the country retrofitting its instruments after the aircraft was already airborne. Unglamorous, and arguably the most consequential item in this newsletter. Sources: The Reporter
Agriculture & Fintech
Tsedey Bank and Eagle Lion take the fertiliser queue digital
Eagle Lion System Technology Group and Tsedey Bank signed an agreement at the bank’s headquarters to digitise Ethiopia’s agricultural input supply chain, from regulatory agencies down to smallholder farmers. The vehicle is Get Fee, Eagle Lion’s payment and transaction platform, which CEO Besufekad Getachew says already counts millions of active farmers and can process high transaction volumes in an organised, auditable way. Replacing cash exchanges is the explicit goal: less waste, less mismanagement, and a record that exists.
For Tsedey, which converted from a microfinance institution and has served as a regional government’s agricultural input lender and sales agent for years, this is an extension of a book it already carries. For Eagle Lion, it is a step from selling fintech products to owning a supply chain’s rails.
Business & Boards
Berhane Demissie joins the board behind Safaricom Ethiopia
Berhane Demissie, co-founder and managing partner of Cepheus Growth Capital Partners, has joined the board of the Global Partnership for Ethiopia, the consortium behind Safaricom Ethiopia, approved during a two-day board meeting at the operator’s Addis Ababa headquarters. She is the second Ethiopian to serve, after Ermias Eshetu, who joined in March 2025. The meeting brought together representatives of Vodacom Group, Safaricom Group, Vodafone, Sumitomo, British International Investment and the IFC.
Demissie brings more than two decades in private equity, investment management, corporate finance and risk across Ethiopia and the UK, including a stint at Citigroup in London and five years advising the Public Financial Enterprises Agency on the reform of Ethiopia’s public financial institutions.
Deep Dives of the Week
Birr Liquidity Squeeze Lifts Ethiopia’s Interbank Rates Off the Corridor Floor
The interbank money market traded 191.3 billion birr in August. The number that matters is 13.000.
For the first two weeks of the month, overnight and seven-day money both cleared at exactly 13.000 percent, with the change column reading 0.0000 percent twice across both tenors. That flat line was not calm. It was a market with nowhere lower to go: since the policy rate went to 16 percent on 13 July, the corridor floor sits at 13 percent, and no bank lends to a peer for less than it can earn parking cash at the central bank.
Then it broke. In the week of 17–21 August, overnight money jumped 311.9 basis points to 16.119 percent, above the National Bank Rate itself, while turnover more than doubled to 57.7 billion birr. The curve inverted, overnight trading above seven-day, which tells you the constraint was immediate rather than structural: banks needed birr that day. The piece traces where it went, roughly 120 billion birr withdrawn through three FX auctions in August, including some 80 billion in the single 20 August sitting the NBE described as conducted for monetary policy purposes. It closes on the final week’s asymmetric retreat, fewer and much larger overnight tickets at elevated rates while term money returned to the floor, the signature of a distribution problem rather than a shortage, and names the two things to watch through the 9 and 23 September auctions.
📖 Read it here: Birr Liquidity Squeeze Lifts Ethiopia’s Interbank Rates Off the Corridor Floor
Paying More, Getting Less: The Hidden Inflation Squeezing Ethiopian Consumers
Headline inflation reached 15.3 percent in July, up from 11.7 percent in April and 9.4 percent in March. Lydia Meried’s question is whether that number captures everything a household is actually losing.
The piece builds the case that it does not, and does it with arithmetic anyone can follow. A loaf that cost 10 birr at 90 grams now costs 15 birr at 75 grams: the sticker price rose 50 percent, but the price per gram rose about 82 percent. A restaurant plate holds its 500 birr menu price while the portion falls from 250 to 180 grams: zero percent inflation on the receipt, roughly 39 percent on the plate. Those are shrinkflation and skimpflation, and Ethiopian consumers may be meeting both at once, on top of ordinary price increases.
What lifts it above a consumer-complaint piece is the second half, which refuses the easy villain. Businesses facing a birr that has gone from around 56 to over 150 per dollar, imported fuel, imported packaging and imported inputs have four options: raise the price, shrink the product, cut the quality, or absorb the loss. Three of those are visible to the customer. The fourth is not survivable on thin margins. The piece ends where a good economics explainer should, with a question the reader can take to the market: what exactly am I getting for my birr now?
📖 Read it here: Paying More, Getting Less: The Hidden Inflation Squeezing Ethiopian Consumers
📺 On Channel 1 TV
We were on Channel 1 TV Ethiopia this week. Our own Lydia Meried talked through what we do at StockMarket.et and gave her read on where Ethiopia’s capital market is heading and what its development could mean for the wider economy: deeper markets, broader access to capital, and a different set of options for companies that have only ever known bank lending.
Thank you to Channel 1 TV for the platform.
Every story above is a queue, and someone at the back of it.
Data miners went to the back of the power queue so households could stay at the front. Three banks that bid for dollars on 26 August went home without them. The private sector sits behind the Treasury in the credit queue, at 9 percent, by the banks’ own choice. Ethiopia has been in the WTO queue since 2003 and is now ten deals deep. And the household at the market, holding a smaller loaf for a bigger number, is in a queue it never agreed to join and cannot see the front of.
Rationing is not a failure of policy. It is what policy looks like when the constraint is real. What matters is who decides the order, whether they say so out loud, and whether the constraint eases before the queue gives up. EEP said it out loud this week, and named October as the date it looks again. The rest of the economy is waiting on the same water.
Keep your coffee strong. See you next Monday. ☕