• National Bank of Ethiopia announced a $70 million foreign exchange auction on Tuesday, February 3. 

• Auction follows an oversubscribed previous FX sale. 

• Commercial banks will participate in the FX auction. 

• Bidding window schedule for banks was specified. 

• Auction is part of the central bank’s continuing hard currency allocation operations. 

why it matters?
The planned $70 million FX auction reflects ongoing National Bank of Ethiopia efforts to supply hard currency and address high demand in Ethiopia’s foreign exchange market.

The National Bank of Ethiopia (NBE) enacted targeted measures in response to a recent surge in the parallel foreign exchange market, which saw the informal USD/ETB rate spike. The actions include a large unscheduled USD auction and a new directive tying import foreign exchange allocations to customs valuation benchmarks, aimed at stabilizing the currency and discouraging informal trading.

Key Takeaways:

• Forex spike: Parallel forex rates reached as high as 190 birr per dollar, above official rates below 160 birr.

• Large FX injection:  USD 500 million  was injected via a special forex auction to meet heightened demand.

• New directive: Banks must use Ethiopian Customs Commission valuation data when issuing forex for imports.

• Objective: Measures target illegal/parallel forex activity and enhance consistency in forex valuations.

• Reform context: Steps align with ongoing post-2024 forex market reforms and market-clearing exchange rate systems.

  
  

Why It Matters:

The Ethiopian Investment Commission (EIC) has launched a certification system for investment consultants to standardize advisory services and strengthen investor confidence. The initiative was introduced at the inauguration of the European Chamber of Commerce in Ethiopia (EuroCham) office in Addis Ababa. The system aims to ensure only qualified, certified advisors serve investors, addressing past complaints about poor guidance.

Key Takeaways

• New certification: EIC introduced a competency assessment and certification system for investment consultants.

• Purpose: To professionalize investment advisory and protect foreign investor interests.

• Implementation: Only certified consultants/firms will be authorized to provide formal advisory services.

• Stakeholder support: EuroCham’s new EU FDI Excellence Centre will complement certification by guiding investors.

• Related concerns: EuroCham noted remaining challenges in tax, customs, and policy predictability.

Why It Matters:

The Ethiopian Capital Market Authority (ECMA) has registered 12,211,586 existing shares of Addis International Convention Center S.C., ensuring compliance with the Public Offer and Trading of Securities Directive No. 1030/2024. This step aligns the company’s securities with Ethiopia’s emerging capital market regulatory framework and supports stock market development. 

Key Takeaways:

• 12,211,586 existing shares of Addis International Convention Center were registered for compliance. 

• Registration fulfills requirements under Public Offer and Trading of Securities Directive No. 1030/2024. 

• ECMA clarified the notice is informational, not an endorsement or solicitation to buy or sell. 

  
  

Why It Matters:

Registering pre-existing shares under the new capital markets directive strengthens the legal and regulatory foundation of Ethiopia’s securities ecosystem. For investors and market participants, it enhances clarity and compliance, which are essential for confidence and participation in the country’s nascent stock market.

• Share purchase: Existing shareholders can buy additional shares through approved brokers. 

• Required docs: Must submit ID, TIN, email, and authorization evidence. 

• Right offer structure: Both new and previously unpurchased shares are available. 

• Broker role: Purchases processed via Capital Market Authority–licensed brokers. 

• Share register: Bank’s share details and eligibility verified against customer records. 

  
  

Why it matters:

• ECMA registered 15 million existing Bank of Abyssinia shares with the authority’s registry. 

• 3.125 million new shares approved for issuance via rights offer. 

• Registration follows Directive No.1030/2024 requiring public securities to be registered. 

• ECMA emphasized notice is for public information, not a sales offer. 

• Move aligns Bank of Abyssinia with Ethiopia’s evolving capital market regulations. 

Why it matters:

• Ethiopia’s bid to restructure its USD 1 billion Eurobond stalled as creditors rejected the agreement in principle. 

• AIP terms included a 15% haircut, new USD 850 million bond, and USD 350 million repayment due July 2026. 

• Creditors cited comparability of treatment concerns under the official restructuring framework. 

• Ethiopia defaulted on the Eurobond in late 2024. 

• Government says it will continue constructive negotiations with official and private creditors. 

Why it matters:

• Revenue reported: Ethio Telecom earned 85.02 billion birr in first half of current fiscal year. 

• Growth drivers: Rapid expansion in data consumption and digital services drove revenue increase. 

• Digital services role: Digital solutions including mobile data and value-added services contributed strongly. 

• Telebirr impact: Mobile money and digital payment platforms supported service diversification. 

• Market context: Telecom sector liberalization and competition sustain digital demand growth. 

Why it matters:

• Credit rating lowered: Fitch cut Afreximbank’s long-term rating to BB+ from BBB- (investment grade).

• Ratings withdrawn: Fitch has withdrawn future ratings and analytical coverage of Afreximbank.

• Dispute driver: Downgrade and withdrawal followed disagreements over Fitch’s assessment approach.

• Preferred creditor status questioned: Fitch cited loss of informal preferred creditor protection in Ghana deal.

• Bank response: Afreximbank terminated its credit rating relationship with Fitch. 

Why it matters:

• Bank of Abyssinia’s total deposits exceeded 300 billion birr in early 2025/26. 

• At end of 2024/25, deposits were 243.2 billion birr. 

• Total assets stood at 286.2 billion birr as of June 30, 2025. 

• Net profit was 7.3 billion birr in FY 2024/25. 

• Customers numbered over 11.6 million as of 2025. 

Why it matters:

• Interbank FX market opened: Ethiopia’s central bank has launched a competitive interbank foreign exchange market with real-time pricing. 

• Market pricing: Banks conduct FX trades through competitive bids, enhancing price discovery and transparency. 

• Regulated oversight: The National Bank of Ethiopia (NBE) keeps strict supervision and guidelines over the new trading platform. 

• Platform tech: The market uses an automated trading system (ESX) for efficient transaction execution. 

• Policy change: This move aligns with Ethiopia’s broader market-based FX reforms since 2024. 

Why it matters:
Opening an interbank FX market marks a significant step in Ethiopia’s transition toward market-based foreign exchange pricing, helping align official pricing with market dynamics. This can improve liquidity allocation among banks and provide more reliable benchmark rates for the broader financial and business community.

• Auction size: National Bank of Ethiopia sold USD 500 million in its largest single foreign exchange auction to date. 

• Exchange rates: Weighted average clearing rate was 154.82 birr per USD with bids between 153.50–154.998 birr. 

• Demand: Total bids reached USD 592.3 million, exceeding supply by over USD 92 million. 

• Participation: 31 banks bid in the auction, 25 securing foreign currency allocations. 

• Policy context: Auction mechanism remains central to Ethiopia’s market-based FX regime post-2024 reforms. 

Why it matters:
This record forex auction reflects active implementation of Ethiopia’s market-based foreign exchange policy and provides significant hard currency liquidity to the banking sector. Exchange rate discovery and allocation outcomes inform pricing and liquidity conditions for imports and financial planning across institutions.

• Total assets: Zemen Bank’s assets reached 106 billion birr in the first half of fiscal 2025/26. 

• Profit: Gross profit for the same period exceeded 5 billion birr. 

• Deposits: Customer deposits climbed to 80 billion birr. 

• Capital: Paid-up capital risen to 14 billion birr, strengthening equity base. 

• Mid-year comparison: Figures build on prior fiscal growth trends in profitability and balance sheet size. 

Why it matters:
Zemen Bank’s midpoint financials demonstrate solid balance sheet expansion and earnings performance within Ethiopia’s banking sector. These metrics are key indicators for investors and analysts tracking sector growth and institutional resilience.

• CBE launched CBE Connect Digital Wallet to channel diaspora remittances. 

• The platform targets capturing part of $35 billion annual remittances. 

• Only 22 % ($7.2 billion) of remittances currently flows through formal channels. 

• NBE granted exclusive Dollar Wallet rights for digital foreign-currency holding. 

• API gateway enables 1–2 day global fintech integration with Ethiopian banking system. 

Why it matters: The new platform represents a policy shift toward formalizing remittances and strengthening foreign exchange inflows, potentially reducing reliance on informal channels and costly intermediaries in Ethiopia’s payments ecosystem. 

• ESX reported 2,500 active investment accounts during its first year. 

• Total trading value exceeded 12 million birr on the Ethiopian Securities Exchange. 

• Account numbers remain below the initial 30,000 target. 

• ESX is prioritizing more listings and market participation tools. 

• Digital access efforts aim to improve investor participation. 

Why it matters: These figures reflect early capital market growth and participation trends in Ethiopia’s evolving securities ecosystem.