The talks, which featured CEO Frehiwot Tamiru and BII Managing Director Christopher Chijiutomi, reportedly revolved around sustainable infrastructure and the state-owned operator’s role in the digital economy, particularly through its Telebirr mobile money platform, data centers, cloud services, and electric vehicle charging infrastructure.

Frehiwot expressed Ethio telecom’s openness to partnerships that can help it scale the goals under its “Next Horizon” digital strategy, according to a statement issued following the talks.

“Both leadership teams discussed and emphasized the importance of supporting their shared vision by mobilizing impact investment to accelerate the implementation of the Next Horizon strategy, with strong emphasis on advancing the digital economy, expanding inclusive fintech ecosystems, and developing climate-resilient digital infrastructure,” reads the statement.

Ethio telecom reported 85 billion Birr in revenue over the first half of the fiscal year. Telebirr accounted for 4.1 billion Birr, with the platform facilitating transactions valued at nearly two trillion Birr during the period.

BII was established in 1948 as the Colonial Development Corporation, which was tasked with improving agriculture in British Colonies. It was later renamed the Commonwealth Development Corporation, and in 2010, came under heavy criticism for abandoning its development finance mandate for a purely profit-driven model.

UK officials rebranded to BII again in 2022, though the institution is still criticized for prioritizing profit over development goals and poverty reduction.  

The report from FSD Ethiopia, a non-government agency funded by the UK government and the Bill and Melinda Gates Foundation, points to what the report describes as an “invisible” merchant economy, where vast amounts of transaction data exist but remain unusable for formal financial intermediation.

It indicates that digital adoption among merchants has surged, particularly through mobile banking platforms, with one system alone serving 83.2 percent of digital merchants.

However, this growth has not translated into improved access to finance. Instead, the data generated through these transactions remains “invisible to credit underwriters,” effectively locking out small businesses from formal lending systems.

“CBE Mobile Banking, the primary provider for 83.2 percent of digital merchants, holds years of transaction data for the majority of Ethiopia’s merchant economy. However, this data cannot effectively support credit underwriting until merchants transition to business-designated accounts,” reads the report.

This disconnect highlights a significant supply-side failure in the financial sector. While merchants are actively using digital tools, the absence of tailored product design and onboarding mechanisms has prevented them from transitioning into formal business accounts. As a result, the report indicates that the financial system continues to overlook a critical segment of the economy despite clear evidence of activity and cash flow.

The document notes, “with 67 percent of micro-enterprises already holding a formal business license, a rate higher than in many comparable markets, the primary constraint is not documentation, but rather product design, onboarding models and commercial incentive structures.”

According to the report, this represents a supply side market failure with direct implications for credit access, data visibility, and regulatory oversight. Further compounding the issue is the uneven distribution of digital infrastructure across the country.

The report identifies a stark divide between urban and rural areas, with digital payment adoption standing at 69.2 percent in cities compared to just 26.4 percent in rural regions. This disparity is attributed not to temporary delays but to structural challenges, particularly connectivity constraints.

Connectivity remains the single largest barrier, cited by 22.7 percent of merchants, surpassing even cost-related concerns. The document frames this as a foundational issue, raising questions about the feasibility of long term digitalization strategies in areas where basic infrastructure remains underdeveloped. Without addressing these constraints, the expansion of digital financial services risks remaining concentrated in urban centers.

At the same time, headline figures suggest rapid growth in digital finance. Mobile money accounts, for instance, increased dramatically from 12.2 million in 2020 to 139.5 million by 2025. However, the report cautions that this growth may not reflect genuine usage. Internal data shows that only 15 percent of these accounts are active.

“National Bank of Ethiopia’s own NDPS 2.0 draft acknowledges that only 15 percent of mobile money accounts are active and merchant payments accounted for less than 0.2 percent of total digital transactions in 2023/24,” it reads.

Much of the increase, according to the report, has been driven by “compulsory use cases,” including mandated digital payments for specific services such as fuel suggesting that while account ownership has expanded, actual engagement with digital financial tools remains limited.

The report also warns that emerging regulatory requirements could unintentionally deepen exclusion within the merchant economy.

Policies mandating the use of national digital identification systems, such as Fayda, or requiring formal business registration for digital transactions may “entrench exclusion” rather than reduce it.

Current figures indicate that only 39 percent of merchants possess a Fayda ID, while formal registration among rural enterprises stands at just 44.3 percent.

“Policies or mandates that require Fayda or business registration as prerequisites for digital payment acceptance risk entrenching exclusion rather than expanding coverage,” the report cautions.

Meanwhile, access to credit remains a persistent challenge. The report identifies strong demand among micro-enterprises, with 44.5 percent, equivalent to approximately 222,000 businesses, indicating that they would benefit from access to financing. Despite this demand, formal digital lending platforms account for less than five percent of borrowing.

As a result, most merchants continue to rely on informal sources, including family and friends, to meet their financing needs. This reliance underscores what the report describes as an “informal credit trap,” where businesses are unable to scale due to limited access to structured financial products.

The issue is particularly pronounced in the segment about businesses seeking loans in the range of 100,000 to 500,000 Birr.

“Based on rough data, [Ethiopia] has over 130 million citizens, yet the total number of shareholders across all sectors is not even more than half a million—and that figure is inflated. Once duplication is accounted for, it is even lower. Meanwhile, countries with smaller populations have far more investors,” she said during a ceremony marking the handover of a capital market service provider license to Prime Capital S.C, which is joining the financial sector as an investment bank.

“Although Prime Investment Bank has become the sixth to receive a license, there is still a lot expected of us to actually operate in this sector,” said Hana, noting that market participants had “brought together shareholders, raised capital, prepared documents, and even rented offices to establish an institutional structure.”

She described the current period as not only a time of capital market development in Ethiopia but also a highly formative stage for its broader financial system, urging newly licensed institutions to take a broader view of their role.

 “The work we do is not merely transactional. It is not about counting activities, but about the role those activities play in the market and in supporting national growth and development by providing alternative financing options that the country needs,” she said.

The head of the Authority also urged firms to assess client needs in detail and study investor behavior, stating they must understand “what types of investors exist… what their risk appetite looks like… and the characteristics and backgrounds of the investor base,” adding that this requires “careful study and observation.”

On expanding access, the DG stressed the need to leverage technology, saying, “people should not have to come to your offices to open accounts… if we rely on that, we may only get hundreds of account openings.”

“In this era of widespread AI and technology, you must build systems, through mobile applications, websites, or other means, that allow people to easily open accounts and transmit trading orders,” she added.

The committee, chaired by China and France, rejected an agreement in principle reached between the Ethiopian government and holders of its one billion dollar Eurobond obligation in January this year, arguing the terms were not fair to other creditors with whom Ethiopia is also pursuing debt treatment.

The agreement rejected in January included  terms for a 15 percent haircut, a new USD 850 million bond maturing in 2029, and a USD 350 million principal repayment due in July 2026.

The report presented at the IMF-World Bank Spring Meetings in Washington, DC, this week notes that negotiations with bondholders are pending. It also reveals that an agreement in principle has been reached with “one large commercial creditor on terms assessed as meeting CoT [comparability of treatment].”

Other countries pursuing debt treatment under the G-20 Common Framework include Ghana, Zambia, and Sri Lanka.

“Most of the debt restructuring cases that started in 2021-22 are now largely completed, both under the Common Framework, with the cases of Ethiopia, Ghana, and Zambia, and outside, with the cases of Sri Lanka and Suriname. These cases now involve only residual commercial creditors, with the exception of Ethiopia where an agreement with bondholders and some other commercial creditors is yet to be reached. Full implementation of the memoranda of understanding reached with official bilateral creditors, through finalization and signature of bilateral agreements, is also not yet completed in most cases,” reads the report.

Earlier this month, the Ethiopian Ministry of Finance said it had reached a debt treatment  agreement with China, Ethiopia’s largest bilateral creditor.

However, similar deals with other creditors and bondholders remain elusive.

The report from the co-chairs also reaffirmed the default status of Ethiopia’s credit rating, which tanked when the government failed to service the first USD 33 million coupon in December 2023.

The Spring Meetings also saw the attendance of Finance Minister Ahmed Shide, who also took part in the Global Sovereign Debt Roundtable convened on the sidelines of the 2026 Spring Meetings of the World Bank Group and the International Monetary Fund.

He provided updates on Ethiopia’s debt restructuring efforts and called for continued constructive engagement from both official and private creditors, alongside sustained support from international financial institutions to maintain reform momentum and support economic recovery.

The roundtable, which includes representatives of bilateral and private creditors as well as international financial institutions debtor countries, was established in early 2023 and is co-chaired by the IMF, World Bank, and the G-20 presidency, which is currently the US.

The Corporation’s operating lease income doubled to 3.4 billion Birr, and while its gross profits showed an exponential jump, a corresponding rise in operating expenses tempered its net profit to 646 million Birr for the year.

The majority of its lease agreements with investors operating in industrial parks across the country are denominated in USD, meaning its income surged in terms of Birr following the liberalization of the forex regime in July 2024.

Similarly, the Corporation retains retention monies in USD from contractors that undertake construction of sheds and structures at the parks. This retention is reported as payable. At the end of June 2025, IPDC held 2.7 billion Birr in retention, up from 1.9 billion the year prior.

IPDC reports a total income of 3.4 billion Birr in 2024/5, while its operating expenses rose to 1.8 billion Birr, driven primarily by depreciation.

Under administrative expenses, IPDC posted 2.5 billion Birr, up from just 882 million the previous year. Two-thirds of this is categorized as bad debt, surging from less than 320 million Birr in 2023/4.

The Corporation values its physical assets (sheds and other facilities) at nearly 20 billion Birr, while it reports ongoing construction (new industrial parks in Semera and Debre Birhan) valued at nearly nine billion Birr.

Total assets are registered at 71 billion Birr.

Its report also reveals that significant financial commitments have yet to materialize. These include 4.7 billion Birr for the construction of new parks and the expansion of several operational ones, including the flagship Hawassa Industrial Park, which are set to be carried out by Chinese contractors.

The report indicates the Corporation’s paid-up capital has risen to 40 billion Birr.

It also reveals that three industrial parks account for the majority of its revenue, with Hawassa alone bringing in 1.2 billion Birr.

Officials of the Ethiopian Customs Commission and the Ministry of Finance stated in Parliament this week that transport service providers and the owners of truck and bus fleets are implicated in illicit trade.

The allegations came as lawmakers discussed a proposal to amend the Customs Proclamation in a bid to tighten enforcement against smugglers by applying the seizure of vehicles implicated in contraband trade.

The draft has raised concerns among  members of Parliament’s Budget and Finance Affairs Committee, who worry that the expropriation of vehicles could erode the constitutional right to own property. Committee members also questioned whether the Commission has the prerogative to seize vehicles found transporting illegal goods without the knowledge of the owner.

Azezew Chane, deputy head of the Customs Commission, argued that international practice supports confiscation as a deterrent.

“Drivers might be part of the activity, but we don’t accept the notion that drivers are contrabandists; it has not been our experience,” he told MPs, insinuating that drivers alone cannot orchestrate smuggling operations that often involve heavy trucks and massive volumes of commodities.

“Clearly, drivers may be paid for their service, but they do not have the capacity to finance such operations,” he said. “Drivers are a means; they are being used by contrabandists.”

He cited an example of a fuel truck that had been caught smuggling goods no less than three times, alleging that the owners of trucks deliberately employ drivers to transport illegal goods.

Azezew also told MPs that the Commission lacks the means to address the problem.

 “We are working with very low-quality vehicles compared to those used by contraband smugglers,” he noted.

Responding to queries from the Committee, Commissioner Debele Kabata, also emphasized that contraband activities are not merely the actions of drivers but the result of the interests and decisions of vehicle owners.

He confirmed that assessments show the majority of vehicles caught smuggling weapons were operated under the direction of owners.

“Over the last eight years, a growing number of smugglers, mostly vehicle owners working with their drivers, were caught red-handed smuggling illegal goods into Ethiopia. We must act to curb this,” said Debele, endorsing the amendment to the Customs Proclamation.

Ethiopia received 2.2 billion euros in energy finance from the EU over the period, making it the eight largest recipient on the continent. Other African countries received considerably more, according to the European Financial Flows to SDG 7 in Africa report.

Egypt leads with 6.3 billion euros, followed by Nigeria at 5.1 billion euros, South Africa (4.9 billion), Morocco (4.1 billion), and Kenya (3.9 billion).

The report also highlights finance from China and government budgets for the energy sector.

Over the same period, Beijing poured over 15 billion euros into Angolan energy infrastructure, another 5.4 billion in South Africa, and 2.3 billion each to Zambia and Nigeria. Chinese energy financing in Ethiopia amounted to 0.8 billion euros in the decade leading up to 2023, according to the report.

Meanwhile, the Ethiopian government spent 2.1 billion euros on the energy sector, trailing far behind the likes of South Africa and Egypt, which both saw spending of over 25 billion euros during the reporting period.

However, energy spending by more than 40 African governments fell below the one-billion-euro mark.

As a result, while around 35 million people gained access to electricity, fast population growth meant  the net access gap closed by just five million—from 570 million in 2022 to 565 million. As a consequence, while other regions of the world have significantly reduced their access gaps, Sub-Saharan Africa accounts today for 85 percent of the world’s population without electricity access.

In 2023, 18 of the top 20 countries with the largest access deficits were in Sub-Saharan Africa. The access deficits in Nigeria (86.6 million), Democratic Republic of Congo (79.6 million) and Ethiopia (56.4 million) accounted for more than one-third of the global population without electricity.

Rural areas remain the most underserved, with an average rate of electricity reaching only 31.6 percent in Sub-Saharan Africa compared to 82 percent for urban areas.

In response to this persistent shortfall, electrification strategies are evolving. While investments in large-scale power plants and national grid expansion are still an important approach to electrification,  decentralised and smaller scale solutions are becoming increasingly important tools in closing the access gap.

The report observes that in 2020-22 decentralised energy solutions provided 55 percent of new connections in Sub-Saharan Africa, “proving resilient to macroeconomic challenges, as more than 50 million off-grid solar products were sold in both 2022 and 2023”.

The report stresses that several energy projects are underway in African countries but most of them do not qualify as SDG7 because the projects are fuel-based.

 Concerns over restrictive visa policies for foreign professionals and investors took center stage at the fourth Invest in Ethiopia High-Level Business Forum, with industry leaders calling for urgent reforms to sustain the country’s growing investment momentum.

Held at the Ethiopian Skylight Hotel under the theme “Ethiopia Ready for Business,” the two-day forum brought together more than 800 participants, including global investors, policymakers, and development partners.

The event was co-organized by the Ethiopian Investment Commission in collaboration with the Ministry of Finance and development partners, as part of the government’s efforts to revive investment.

Initially, officials targeted USD 2.4 billion in new investment commitments, marking a notable increase from the previous edition, which secured more than USD 1.6 billion in deals, according to them. However, the Ethiopian Investment Commission (EIC) announced signing of major investment deals worth a total of more than USD13 billion across key sectors, when the Forum concluded on Friday March 27, 2026. “These deals are seen as strong vote of confidence in Ethiopia’s economy,” remarked EIC.

A high-level panel discussion on the opening day, moderated by Tilahun Esmael (PhD), CEO of the Ethiopian Securities Exchange, brought visa-related challenges into sharp focus.

Wei Qiangyu, general manager of the CCCC Ethiopia Branch, described current visa arrangements as inadequate for the needs of long-term investment projects being run by the Chinese construction giant.

He noted that the existing three-month visa, extendable for another three months, does not align with the operational timelines of major investments.

“I recommend introducing more flexible visa options—such as three, six, or even eight to ten months—to match the pace of Ethiopia’s rapid economic growth,” Wei said, adding that companies must also continue localizing their workforce.

He noted that his firm has already achieved 92 percent localization among its 9,600 employees.

Wei also mentioned other issues, such as forex availability problems and policy changes not being communicated to investors, in addition to the difficulties of obtaining a work visa and operating in Ethiopia as a foreigner.

On the other hand, Wei applauded the country’s efforts in creating an attractive investment environment, mentioning the 30 percent annual growth of the construction market, low-cost labor, the presence of Africa’s largest airline, and city beautification projects.

The concern regarding visas for foreigners was echoed by Jemal Ahmed, CEO of MIDROC Investment Group, who called for broader reforms to ease entry into the country for investors, skilled workers, and tourists alike.

“Access to Ethiopia should be simple and free—for investors, conference participants, and tourists,” he said, warning that visa bottlenecks could undermine key sectors such as tourism, which he described as one of the pillars of the country’s economic reform agenda.

Jemal noted that while Ethiopia has made progress in improving its investment climate, operational challenges such as visa restrictions continue to affect investor confidence. He also stressed the need for clearer incentives and regulatory frameworks to attract capital into sectors like hospitality, where investment levels remain relatively low.

Ethiopia’s investment visa landscape is currently defined by a shift toward performance-based oversight and high-cost residency options.

While a new 10-year “Golden Visa” offers long-term stability and property rights for USD 10,000, the standard entry route still faces significant bureaucratic hurdles. Under a new regulation, visa renewals are no longer automatic; they are now strictly tied to meeting specific project milestones, such as job creation and export targets.

For employment, the process follows a strict “employment-first” model: foreign nationals must first have a confirmed job offer and an employer-sponsored work permit from the Ministry of Labor and Skills before applying for a Foreign Business Firm Employment Visa. Once in the country, workers must also secure a residence permit to legalize their long-term stay.

Government officials acknowledged broader challenges in improving service delivery and institutional coordination.

Fitsum Assefa (PhD), minister of Planning and Development, highlighted ongoing reforms aimed at streamlining investment services, enhancing inter-agency collaboration, and reducing bureaucratic inefficiencies. She pointed to high-level investment platforms and public-private dialogue forums as key mechanisms for addressing investor concerns and accelerating decision-making.

While visa policy was not directly addressed in her remarks, Fitsum emphasized that improving the overall ease of doing business, including faster and more predictable services, remains a central priority of the government’s reform agenda.

Beyond visa issues, participants raised concerns over logistics and trade facilitation, noting that customs clearance can take between four and eight weeks, significantly affecting economic efficiency. Calls were made for stronger coordination among institutions such as the Ethiopian Customs Commission and better integration of logistics systems.

Despite the challenges, investors expressed optimism about Ethiopia’s economic trajectory, citing expanding opportunities in manufacturing, agriculture, mining, and tourism as reforms continue to open previously restricted sectors.

The forum also featured breakout sessions on advancing manufacturing and trade, unlocking mining and energy potential, and strengthening the role of financial institutions and capital markets, bringing together senior government officials, investors, and development partners for sector-focused discussions.

Telecom operators will now be required to contribute 1.5 percent of their gross annual revenue to a federal fund dedicated to expanding access to communication networks. Last year’s financial reports suggest Ethio telecom and Safaricom Ethiopia’s combined contributions could be valued at upwards of 2.5 billion Birr each year.

A regulation newly approved by the Council of Ministers establishes the Universal Access Fund under the Ethiopian Communications Authority (ECA).

While the Authority is mandated to invest what it collects from operators to finance communications projects, the regulation also allows it to invest in business areas including fixed bank deposits, government securities, or other investments approved by its board.

As it stands, the state-owned Ethio telecom, which generated 162 billion Birr in revenue last year, and Safaricom Telecommunications Ethiopia (7.2 billion Birr) will be the fund’s primary source, apart from grants and investment income. They are required to make the contribution within three months of the close of the financial year.

The regulation grants new entrants a three-year grace period before they are also obliged to give up 1.5 percent of annual revenue to the fund.

However, the regulation stipulates that contributions do not necessarily have to be in cash. Operators will also have the option to “provide proportional services and infrastructure that aligns with established Universal Access objectives.”

Officials say the fund will be utilized to finance universal communication access through subsidies and grants, with priority granted to projects that would not be feasible without the support of the fund.

Projects that effectively and sustainably expand access to communications infrastructure, systems and services through ‘smart subsidies’ with minimal one-time funding will also be financed through the Fund, according to the regulation.

While official figures put the total number of cellular connections in Ethiopia at well over 80 million, much of the population has little or no access to telephone and internet services. Some studies suggest that as many as 75 percent of Ethiopians are offline.

The Licensing and Supervision of Insurance Business Directive which came into force this week requires insurers to secure regulatory approval for individuals holding positions of significant influence within their organizations.

Under the directive, persons with significant influence include shareholders who hold two percent or more shares directly or indirectly, directors, chief executive officers, and senior executive officers.

The directive introduces stringent requirements that must be fulfilled for approval. Among these is the “fit and proper” criterion, which evaluates the knowledge, experience, and age of directors, chief executive officers, and senior executives.

According to the directive, a director must be at least 30 years old, hold a minimum of a first degree, and possess at least five years of relevant experience. It also mandates gender diversity on boards, prohibiting single-gender boards and requiring at least two female directors. Incumbent board members are exempt from this requirement until the end of their current terms.

Insurance companies are also required to appoint at least three independent directors who have no first-degree family ties or business, professional, or commercial relationships with the company. Foreign nationals may qualify as independent directors if they hold a relevant master’s degree and have at least ten years of sector experience, a requirement set for Ethiopian nationals too.

The directive further emphasizes financial soundness for persons with significant influence. It requires verification that such individuals have not been declared bankrupt, have not initiated bankruptcy proceedings, and have not had assets sequestrated. Additional considerations include whether the individual has been declared a judgment debtor in relation to unpaid loans, credit obligations, or taxes, and whether they hold non-performing loans.

It also requires scrutiny of share acquisition, including whether purchases are funded by bankrupt or insolvent parties. Shareholders must demonstrate that their net worth at the time of acquisition exceeds the value of the shares held or to be acquired. The directive also examines whether the individual has had bank accounts closed without reinstatement.

In addition, insurers are required to establish a “fit and proper” policy and maintain a register of persons with significant influence. The directive highlights whistleblowing as a key source of information, requiring companies to ensure that individuals who disclose information in good faith are protected from retaliation.

It further limits the duration of acting appointments. Individuals may not serve in acting capacities as chief executive officers or senior executive officers for more than six months, beyond which such experience will not be recognized as relevant managerial experience. However, the acting period for a chief executive officer position may extend up to nine months. All acting appointments to vacant positions must be reported to the NBE within three working days.

The NBE requires a formal written request to conduct fitness and propriety assessments. Required documents include an updated and signed curriculum vitae, organizational structure, board appointment minutes, identification documents, and an Ethiopian Police clearance certificate for directors, chief executive officers, and senior executives. All persons with significant influence must also submit a completed fitness and propriety questionnaire and a tax identification number card.

The directive further requires that all currently serving senior executives who comply with the provisions of the directive and have not yet received NBE approval must do so within six months.

Applications filed past the set deadline will result in a penalty of Birr 10,000 for each unapproved position.