Ethiopia Opens SEZ Banking to All Lenders, Expanding Trade Finance and Export Capacity

• All licensed banks authorized to operate in SEZs; prior access limited to selected lenders
• SEZ firms gain access to full banking services: FX, trade finance, loans, and payments
• Policy targets increased export volumes from industrial parks and SEZ-based manufacturers
• Expanded FX access supports import of raw materials and intermediate goods
• Increased lender participation expected to reduce borrowing costs for exporters and traders
• Broader credit access enables financing for logistics assets, including trucks and equipment
• Reform aligns with FX liberalization and rising export growth trends

Why it matters?

Opening SEZ banking expands access to FX and credit, directly supporting import flows and export production. Increased competition among banks improves financing conditions for trade and logistics, enabling truck acquisition and supply chain expansion linked to industrial zones.

• KCB Group plans to enter Ethiopia’s banking market before end-2026.  
• KCB says Ethiopia fits its regional expansion and non-Kenyan earnings growth strategy.  
• Ethiopia’s new rules allow foreign banks through subsidiaries, branches, or local equity stakes.  
• Foreign ownership in Ethiopian banks is capped at about 40%; total foreign participation at 49%.  
• KCB is discussing entry options with NBE, including a local-bank stake or joint subsidiary.  
• KCB already operates in Rwanda, Uganda, Tanzania, Burundi, South Sudan, and DR Congo.  
• If approved, KCB could become among the first foreign banks in Ethiopia in decades.  

Why it matters?

The planned move signals that Ethiopia’s banking liberalization is advancing from policy to potential market entry. It also indicates rising competition prospects in banking, digital financial services, and cross-border capital flows. 

• Lamu Port recorded a surge in ship calls in 2026 following Red Sea and Middle East disruptions.
• Vessel traffic increased significantly compared to prior months as ships rerouted from conflict-affected corridors.
• Port handled multiple additional vessels per month beyond previous baseline levels.
• Cargo throughput volumes rose in parallel with increased vessel arrivals.
• Lamu is part of the LAPSSET corridor linking Kenya, Ethiopia, and South Sudan markets.
• Red Sea route disruptions forced global shipping lines to seek alternative East African ports.
• Increased utilization highlights Lamu’s capacity as a strategic regional logistics hub.
• Shift in routes may divert a share of Ethiopia-bound cargo from Djibouti corridor.

why it matters?

Rerouting of global shipping could reshape regional logistics routes, potentially diverting cargo from Djibouti to Lamu and affecting Ethiopia’s trade corridors.

• Global coffee prices declined sharply in 2026, triggering financial risk for Ethiopian exporters holding inventories.
• Exporters face losses as current prices fall below previously held stock purchase price levels.
• Coffee generates over $1 billion annually, remaining Ethiopia’s top foreign exchange earner.
• Large volumes of unsold stock increase exposure to price volatility and liquidity pressure.
• Authorities warn continued hoarding could amplify sector-wide financial losses.
• Exporters urged to release stocks immediately to limit further price-driven losses.

why it matters?

With over $1 billion in annual export value, price declines and stockpiling risks can significantly reduce Ethiopia’s FX inflows and strain exporter finances.

• Benishangul-Gumuz delivered more gold in 7 months than entire previous fiscal year total.
• Seven-month gold deliveries reached 100%+ of prior year annual output benchmark.
• Region accounts for a significant share of Ethiopia’s total gold export volumes.
• Gold remains one of Ethiopia’s top foreign exchange earning commodities.
• Deliveries driven mainly by artisanal and small-scale mining operations.
• Government collection and supply monitoring mechanisms contributed to higher reported volumes.

why it matters?

Exceeding 100% of last year’s output in seven months signals stronger FX inflows and improved gold supply tracking in Ethiopia’s mining sector.

• Dangote Industries, GCL signed $4.2 billion, 25-year gas supply agreement for Ethiopia fertilizer megaproject.
• Gas to supply 3 million tonnes/year urea plant valued at $2.5 billion, operational target 2029.
• Project structured 60:40 between Dangote Group and Ethiopian Investment Holdings (EIH).
• Gas sourced from Calub field, transported via 108-km pipeline to Gode, Somali Region.
• Plant to fully replace Ethiopia’s current urea imports and supply regional export markets.
• GCL has operated in Ethiopia for over 20 years across oil, gas, and LNG infrastructure projects.
• Project integrates upstream gas, midstream pipeline, downstream fertilizer in single value chain.

why it matters?

A $4.2B, 3-million-tonne project can eliminate Ethiopia’s fertilizer imports, reduce FX demand, and build a domestic energy-to-fertilizer industrial chain by 2029.

• AfrexInsure, Afreximbank’s specialty insurance subsidiary, appointed Lesley Ndlovu as Chief Executive Officer in 2026.  
• Ndlovu succeeds Jonas Mushosho and will lead expansion of specialty insurance for African trade and investment risks.  
• AfrexInsure is a wholly owned Afreximbank subsidiary offering insurance management services for trade-related investments across Africa.  
• The company is incorporated in Mauritius and regulated by the Financial Services Commission with insurance manager and global business licenses.  
• AfrexInsure provides specialty cover including project cargo, construction equipment, energy projects, and alternative risk solutions.  
• The firm says it aims to retain more specialty insurance premiums within Africa and support bankable trade transactions.  

why it matters?

The appointment comes as AfrexInsure expands African-based risk coverage for trade and trade-related investments. That matters for exporters, project sponsors, lenders, and insurers seeking more Africa-focused underwriting capacity. 

• AfrexInsure, Afreximbank’s specialty insurance subsidiary, appointed Lesley Ndlovu as Chief Executive Officer in 2026.  
• Ndlovu succeeds Jonas Mushosho and will lead expansion of specialty insurance for African trade and investment risks.  
• AfrexInsure is a wholly owned Afreximbank subsidiary offering insurance management services for trade-related investments across Africa.  
• The company is incorporated in Mauritius and regulated by the Financial Services Commission with insurance manager and global business licenses.  
• AfrexInsure provides specialty cover including project cargo, construction equipment, energy projects, and alternative risk solutions.  
• The firm says it aims to retain more specialty insurance premiums within Africa and support bankable trade transactions.  

why it matters?

The appointment comes as AfrexInsure expands African-based risk coverage for trade and trade-related investments. That matters for exporters, project sponsors, lenders, and insurers seeking more Africa-focused underwriting capacity. 

• Manufacturers said private banks are restricting loans to industry early in the fiscal year, citing NBE lending limits.  
• NBE raised annual bank credit growth ceilings from 14% to 18%; some banks can expand lending up to 24%.  
• Firms said manufacturing loan rates initially set at 14%–15% were later increased to 23%–24.5%.  
• Manufacturers said financing shortages are limiting raw material purchases and disrupting production planning and cash flow.  
• Industry representatives said a ETB 20 million loan may require collateral worth ETB 50–60 million.  
• The concerns were raised at a March 12, 2026 public-private forum on finance and workspace constraints.  
• The Chamber signed an MoU with EDI Ethiopia, Addis Ababa Trade Goods Enterprise, and Awash Bank to support SMEs.  

Why it matters?

The report points to tighter bank credit, higher borrowing costs, and stricter collateral demands for Ethiopian manufacturers. These constraints can affect working capital access, raw material purchases, and SME expansion. 

Ethiopia Pulses, Oilseeds Export Sector Faces Tax and Logistics Constraints

• Ethiopia exported 707,000 tonnes of pulses, generating USD 575 million during the current fiscal year.
• Oilseeds exports reached 363,000 tonnes, generating about USD 330 million in revenue.
• Pulses exports achieved about 95% of annual targets, according to Ministry of Trade and Regional Integration.
• Oilseeds exports reached 66% of the government’s annual export target.
• Exporters raised concerns over new tax rules, logistics costs, and port clearance delays affecting shipments.
• Meeting between exporters and the Ministry of Trade was held 7 March 2026 to address sector challenges.

Why it matters?

Pulses and oilseeds are among Ethiopia’s major non-coffee agricultural exports. Lower oilseeds export performance and rising logistics and tax costs could affect foreign currency earnings and export competitiveness.

Addis Ababa raises public transport tariffs effective 16 March 2026

• Addis Ababa Transport Bureau revised public transport tariffs after the latest retail fuel price increase.
• New tariffs take effect on 16 March 2026 across minibuses, midibuses, city buses, and Bajaj services.
• Minibus taxi fares remain 10 ETB up to 2.5 kilometers and rise to 55 ETB for 20 kilometers.
• Midibus fares are set at 15 ETB up to 8 kilometers and 45 ETB for 28 kilometers.
• City bus fares start at 10 ETB up to 7.5 kilometers and rise to 70 ETB for 50 kilometers.
• Bajaj services will keep a flat 10 ETB fare across all routes in Addis Ababa.
• The Bureau said operators charging above legal rates face enforcement; violations can be reported via hotline 9417.

why it matters?

The tariff revision raises commuting costs for households and workers in Addis Ababa from 16 March 2026. It also sets updated fare ceilings for transport operators following the recent fuel price increase.

• Ethiopia targets $3 billion in coffee export revenue this fiscal year. 

• Government plans to export 600,000 tonnes of coffee during the fiscal year. 

• First six months exports reached 200,000 tonnes, generating $1.35 billion. 

• Export volume achieved 74% of planned target despite strong revenue performance. 

• Authorities say some exporters withheld stock expecting higher prices or currency gains. 

• Government coordinating with Ethiopian Coffee and Tea Authority and regional bodies to prevent hoarding. 

Why it matters?
Coffee accounts for a major share of Ethiopia’s export earnings. Achieving the $3 billion target is critical for foreign exchange supply, while delayed shipments could affect export volumes and global market reliability. 

• Ministry of Mines issued production licenses to three companies on March 13, 2026. 

• Ethiopian Investment Holding received a potash production license. 

• ZYTB-DIM Steel Manufacturing received an iron production license. 

• Bero Mining received a gold production license. 

• The three projects are expected to require USD 4.2 billion in combined investment. 

• Ministry said the projects aim to expand mineral output, exports and reduce foreign exchange losses. 

• ZYTB-DIM said it plans to produce 2 million metric tons every two years. 

Why it matters?
The licenses move three mining projects from exploration into production. For Ethiopia, that affects export earnings, industrial raw material supply, and future fertilizer and steel input availability. 

• Ministry of Trade and Regional Integration raised petrol price to ETB 132.18 per litre. 

• Diesel price increased to ETB 139.64 per litre under latest national fuel price adjustment.

• Adjustment is part of government policy to gradually remove fuel subsidies. 

• Price revision aims to align domestic fuel prices with international import costs. 

• Retail fuel prices are periodically revised by the Ministry of Trade and Regional Integration. 

Why it matters?
Fuel price adjustments directly affect transportation, logistics, and operating costs across Ethiopia’s economy. Higher pump prices can influence inflation, freight rates, and business expenses.

• Bishoftu International Airport construction workforce projected 50,000 workers in 2026, according to project labor demand estimates.

• Workforce expected 70,000 in 2027, 90,000 in 2028, and 100,000 in 2029 during peak construction period.

• Labor management plan prepared by Dar Al-Handasah Consultants and Ethiopian Engineering Corporation.

• Airport project led by Ethiopian Airlines Group to expand national aviation capacity.

• Airport planned in Bishoftu, 40 km southeast of Addis Ababa.

• Project designed to supplement operations at Addis Ababa Bole International Airport.

why it matters?
The project will employ tens of thousands during construction and expand Ethiopia’s aviation infrastructure. Increased capacity may support aviation, logistics, and related services sectors.

• Aliko Dangote ordered 1,000 CNG trucks for logistics operations.

• Order placed by Dangote Group with a Chinese vehicle manufacturer.

• Trucks powered by compressed natural gas instead of diesel.

• Deployment supports distribution from 650,000 barrels-per-day Dangote Refinery.

• Nigeria holds over 200 trillion cubic feet of proven gas reserves.

• Initiative aligns with Nigeria’s CNG transition program for transport sector.

• Fleet expansion expected to reduce diesel consumption across distribution network.

• Trucks to operate across Nigeria’s national supply corridors.

why it matters?
The 1,000-unit CNG order signals large-scale fleet conversion in Nigeria. It supports refinery distribution efficiency and expands gas utilization in transport.

• Ethio-Djibouti Railway Corporation reaffirmed commitment to expand railway infrastructure using domestic expertise.

• CEO Takele Uma made remarks during Adwa anniversary site visit.

• Leadership and staff toured the AMG–Indoode Link Railway Project.

• Project executed by corporation’s engineers, technicians and operational teams.

• Corporation stated it is delivering projects without external contractors.

• State Minister of Transport and Logistics Dhenge Boru highlighted railway expansion priority.

• Government investing in transport corridors and railway connectivity.

• Expansion aims to improve freight efficiency and reduce transport costs.

• Projects expected to enhance network integration and regional logistics role.

why it matters?
Railway expansion using domestic capacity supports freight efficiency and corridor integration. It aligns with Ethiopia’s strategy to strengthen logistics competitiveness and regional trade positioning.

• Geological survey identified 81 million tonnes of coal in Southern Ethiopia.

• Survey conducted by Ethiopian Geological Survey.

• Deposit located in Southern Ethiopia Regional State.

• Coal resource classified based on geological assessment data.

• Findings add to Ethiopia’s domestic mineral resource base.

• Survey forms part of national mineral exploration program.

• Authority indicated potential for industrial and energy sector use.

why it matters?
The 81 million tonne coal discovery increases Ethiopia’s documented mineral reserves. It provides additional domestic resource data for energy and industrial planning.

• Ethiopian Petroleum and Energy Authority implemented a revised fuel market share framework.

• Framework reallocates fuel volumes based on verified sales performance.

• Companies required to submit audited fuel sales and operational data.

• Allocation linked to actual station activity and distribution capacity.

• Authority aims to address fuel diversion and illegal trading practices.

• Revised system applies to oil marketing companies operating nationwide.

• Implementation follows sector compliance monitoring and data verification measures.

• Authority stated the framework supports regulated fuel distribution.

why it matters?
The revised allocation system ties fuel supply to verified sales data. Oil marketing companies must align reporting and operations with compliance requirements. This affects fuel distribution volumes across Ethiopia.

• National Bank of Ethiopia to launch interdealer FX trading platform in 2026.

• Current export FX surrender requirement stands at 70%.

• Exporters retain 30% under existing framework.

• Planned reform will reduce mandatory surrender ratio.

• Retention share for exporters set to increase.

• Shift follows gradual FX liberalization measures since 2024.

• NBE conducted two special FX auctions totaling $1 billion.

• Latest auction allocated $455.29 million at 155.17 Birr/USD.

• Interbank FX transactions to move from NBE allocation model to dealer-based trading.

• Reform signals transition from centralized FX distribution to market-based pricing.

Why it matters?
Lower surrender ratios and interdealer trading indicate structural shift toward FX market liberalization and reduced central bank allocation dominance.

• Ethiopia generated $288 million from horticulture exports.

• Export revenue covers flowers, fruits, and vegetables.

• Earnings recorded during the current fiscal reporting period.

• Sector contributes to foreign exchange inflows.

• Export volumes supported by commercial farms and smallholder producers.

• Horticulture remains a key non-traditional export segment.

Why it matters?
$288 million in earnings strengthens FX supply and supports Ethiopia’s export diversification strategy.

• Overnight interbank trading volume reached Birr 126.3 billion in February 2026.

• Volume increased from Birr 38.5 billion in January 2026.

• Month-on-month growth exceeded 200 percent.

• Average overnight rate rose to 15.9 percent.

• Rate increased from 14.2 percent in January.

• Transactions concentrated in one-day interbank placements.

Why it matters?
Sharp volume and rate increases indicate tighter liquidity conditions and higher short-term funding costs.

• National Bank of Ethiopia allocated $455.29 million in second $500 million special FX auction.

• Weighted average selling rate settled at 155.17 Birr per USD.

• Highest accepted bid reached 156.30 Birr per USD.

• Lowest accepted bid stood at 153.80 Birr per USD.

• Auction conducted to supply foreign currency to commercial banks.

• Follows earlier $500 million special FX auction in February 2026.

Why it matters?
The 155.17 Birr/USD settlement rate signals current interbank FX pricing and impacts import costs and liquidity conditions.

• Tigray Trade and Export Agency said fuel supply to Tigray has been completely cut off since January.

• The agency reported no fuel deliveries have entered the region for over one month.

• fuel inflows decreased from around 5.2 million litres in May to just about 2.09 million litres in June, indicating a sharp contraction. 

• Public and private vehicles face operational disruptions due to supply halt.

• Businesses dependent on fuel report constrained activity.

• Agency called for restoration of fuel distribution to the region.

Why it matters?

• Disrupts trade flows and regional supply chains.

• Increases operating costs for transport and logistics businesses.

• Adds pressure on local markets and essential service delivery.