Ethiopia Moves from Pegged to Floating Foreign Exchange System
Ethiopia-China Conduct Business Forum in Addis Ababa
Premiere Abiy Launches the “5 Million Ethiopian Coders” Initiative
Ethiopia’s Olympic Team Arrives in Paris for the 33rd Summer Olympic Games
NEWS IN BRIEF
Ethiopia
Prime Minister Abiy Ahmed briefed various stakeholders on Thursday (August 1) about the recently implemented Macro-Economic Reform Program Policy.He stressed the fact that it is crucial to understand the policy in holistic terms. He also urged regulators and law enforcement agencies to take action against malicious traders who drastically manipulate market prices.
The government of Ethiopia announced on Sunday (July 28), a macroeconomic reform program. The reform, which is based on the Home-Grown Economic Reform Plan (HGER 2.0), aims to stabilize and modernize the macro-economy, encourage foreign investment, encourage job creation, strengthen the government’s institutional capacity, and accelerate economic growth.(See Article)
Prime Minister Abiy Ahmed met in the Office of the Prime Minister on Wednesday (July 31) with the newly appointed Ambassadors of Ethiopia following the conclusion of their intensive training over the past few weeks.
Prime Minister Abiy Ahmed officially launched the “5 Million Ethiopian Coders” Initiative on Tuesday (July 23) at the Science Museum in Addis Ababa. The program was launched as part of the national Digital Ethiopia 2023 strategy, which streamlines Ethiopia’s efforts to bridge the digital skills gap in the country. (See Article)
On Saturday (July 27), Prime Minister Abiy visited the Koysha Gibe 4 hydroelectric dam, the largest project after GERD and inspected the progress so far. He also spoke to the several dedicated youths working tirelessly to realize the project. During his tour, he said, “I have come once again for my 14th follow-up review, witnessing significant progress since the last review at the end of 2023.”
Prime Minister Abiy Ahmed and First Lady Zinash Tayachew, on Saturday (July 27), paid their respects in person to the families and community of victims of the Gofa Zone landslides, which claimed the lives of several people over the course of the course of the week. They were accompanied by former Prime Minister Hailemariam Desalegn, former Speaker of the House Abadula Gemeda, and other Federal Government officials.
Finance Minister Ahmed Shide while briefing parliamentarians on the draft proclamation on the International Development Association (IDA) 500-million USD concessional loan on Thursday (August 1), told the Members of the House of Peoples’ Representatives, the financial packages from the World Bank Group and the International Monetary Fund will help bolster the government’s reform efforts under the auspices of the Homegrown Economic Reform.
State Minister for Foreign Affairs, Ambassador Mesganu Arga, on Monday (July 29), received at his office a delegation led by his Kenyan counterpart and Principal Secretary for the State Department for Foreign Affairs of Kenya, Korir Sing’oei. They discussed bilateral and regional issues of common interest as well as the need to expedite regional integration through strengthened economic engagements.
The Ethiopia-China Business Forum was held on Wednesday (July 30) at Skylight Hotel in Addis Ababa. Ethiopian high-level officials, the business community, and members of Ethiopia-China Friendship and Cooperation Committee were in attendance. (See Article)
Ethiopia’s Olympic team has arrived in Paris, France, in anticipation of the 33rd Summer Olympic Games, which will take place from July 26 to August 11. The delegation, consisting of 39 athletes, upon their arrival at Paris Charles de Gaulle Airport received a warm welcome from the Ethiopian Diaspora and staff from the Embassy of Ethiopia in Paris. (See Article)
Djibouti
Sheikh Abdullah Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Foreign Affairs, on Monday (July 29) received Mahamoud Ali Youssouf, Minister of Foreign Affairs and International Cooperation of Djibouti. They discussed regional and international issues of common interest.
Kenya
Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs, Musalia Mudavadi, officially opened the Review of Kenya’s Foreign Policy 2014 Colloquium in the Capital Nairobi on Tuesday (July 30). According to the Ministry of Foreign Affairs, the colloquium, reflecting on Kenya’s Foreign Policy 2014, brought together experts in international relations to review and enrich Kenya’s foreign policy.
The State Department for Public Health and Professional Standards of the Ministry of Health, in a press statement released on Wednesday (July 31), confirmed an outbreak of Monkeypox in the country.
Somalia
President Hassan Sheikh Mohamud on Monday (July 29) held a phone conversation with Turkiye President Recep Tayyip Erdoğan on Monday (July 29) about strategic cooperation between the two countries, including energy and defense.
Africa and the African Union
The Department of Political Affairs, Peace and Security of the African Union Commission (AUC-PAPS), in collaboration with the Network of African National Human Rights Institutions (NANHRI) and with support from the United Nations Human Rights Office of the High Commissioner (UNOHCHR), held a consultative dialogue on the implementation of the outcomes of the 6th AU-NANHRI Policy Dialogue and Human Rights Decade Action Plan from July 29–31 in Nairobi, Kenya.
The Peace and Security Council of the African Union (AU) reiterated on Monday (July 29) in Maputo its commitment to continue supporting efforts to eradicate terrorism and violent extremism and restore peace in the northern part of Mozambique.
Ethiopia Moves from Pegged to Floating Foreign Exchange System
The government of Ethiopia announced on Sunday (July 28), a macroeconomic reform program. The reform, which is based on the Home-Grown Economic Reform Plan (HGER 2.0), aims to stabilize and modernize the macro-economy, encourage foreign investment, encourage job creation, strengthen the government’s institutional capacity, and accelerate economic growth.
Following the government’s announcement, the National Bank of Ethiopia (NBE) also announced on Monday (July 29), that it has moved from the National Bank’s pegged exchange rate, which it has been in use for a long time, to the floating exchange rate. This historic shift in Ethiopia’s currency policy attempts to address multiple economic problems concurrently: a scarcity of foreign currency, significantly higher parallel market foreign exchange rates and high inflation. A statement released by the NBE on Monday (July 29), acknowledges that the new exchange rate is challenging in many aspects but critically necessary to avoid problems caused by the fixed exchange rate system.
According to the NBE statement, the pegged foreign exchange rate system in Ethiopia, initially designed to ensure stability and low inflation, has led to high inflation and illicit exports of Ethiopia’s resources, causing foreign exchange earnings to diverge from the banking system and domestic economy, affecting productive sectors and undermining policy efforts to expand exports and attract foreign investment. In summarizing the importance of the FX reform, the statement says, the “FX reform is essential to address acute foreign exchange shortages, enhance export competitiveness, attract FDI, and complement multiple other macroeconomic reforms that are being put in place to enhance conditions for private sector enterprises to grow and thrive in the Ethiopian economy.”
According to the NBE, key measures following the introduction of the new FX system, include transitioning to a market-based exchange regime where banks can freely negotiate foreign currency rates, with NBE intervention only as needed. Exporters and commercial banks will now retain foreign exchange, which will increase FX supplies to the private sector. Import restrictions have been removed, and the market for goods and services imports has been liberalized. Exporters can retain up to 50% of their foreign exchange proceeds, while and companies operating in Special Economic Zones can retain all their foreign exchange earnings.
Additionally, the previous allocation system based on waiting lists has been abolished. Non-bank foreign exchange bureaus will now trade currency at market rates, and forthcoming regulations will lift restrictions on franco valuta imports.
Additional changes include simplified rules for foreign currency account management and transactions, including relaxed restrictions on the allocation of foreign currency to travellers. Moreover, rules on foreign borrowing for private entities and banks have been improved. Upon its launch, the securities market will be open to foreign investors,. Restrictions on the amount of foreign currency travelers can carry have also been relaxed.
The new market-based system is expected to benefit key sectors such as agriculture, mining, manufacturing, services, and tourism, help repatriate foreign earnings, boost import-substituting industries, and enhance Ethiopia’s attractiveness to foreign investors. This shift will also support broader macroeconomic reforms aimed at private sector growth.
To ensure a smooth transition, the government has implemented several measures, including temporary subsidies for essential imports like fuel, fertilizers, medicine, and edible oil to mitigate price impacts. Financial support will be increased for those affected by high inflation, including salary supplements for civil servants and expanded funding for the Productive Safety Net Program (PSNP). External debt service relief is being secured to maintain budgetary allocations for social and capital spending. The NBE has introduced new monetary policy tools to control inflation, and the Ministry of Finance is strengthening the revenue base to avoid inflationary financing.
Additionally, a substantial financial package of $10.7 billion from international partners, including the IMF and World Bank, will support these reform efforts, marking the largest coordinated support commitment for Ethiopia to date.
In line with this, on Tuesday (July 30), the World Bank’s Board of Executive Directors approved a comprehensive financial support package for Ethiopia. This package includes Ethiopia’s First Sustainable and Inclusive Growth Development Policy Operation, comprising a $1 billion grant and a $500 million concessional credit from the International Development Association (IDA). As a key development finance provider for Ethiopia, the World Bank Group currently offers over $2 billion annually in concessional financing. IDA commitments currently total $15.5 billion, with $7 billion available for disbursement.
The International Finance Corporation (IFC) has an investment portfolio of $320 million, and the Multilateral Investment Guarantee Agency (MIGA) provides $1.15 billion in guarantees. Over the next three years, the World Bank plans to support Ethiopia’s goal of becoming a middle-income country with $6 billion in new IDA commitments, $2.1 billion in IFC investments, and expanded MIGA engagement, totaling over $16.6 billion in undisbursed and future commitments. Including the package from the WB group, the overall support from the WB, IMF, debt restructuring, and bilateral support exceeds $27 billion.
The foreign exchange reform, combined with other macroeconomic policies and international support, presents Ethiopia with a unique opportunity to accelerate its growth and development. In the near term, the National Bank of Ethiopia will focus on a smooth transition to the new exchange rate system while maintaining price stability and enhancing regulatory and supervision efforts.
Ethiopia-China Conduct Business Forum in Addis Ababa
The Ethiopia-China Business Forum was held on Wednesday (July 30) at Skylight Hotel in Addis Ababa. Ethiopian high-level officials, the business community, and members of Ethiopia-China Friendship and Cooperation Committee were in attendance.
The forum aims to strengthen relations through business and investment, State Minister of Foreign Affairs, Ambassador Mesagnu Arga, noted in his remarks, highlighting the recently signed All Weather Strategic Partnership and Chinese private sector FDI strides. Ethiopia-China Friendship Committee Chair Betty Xu emphasized Ethiopia and China’s shared vision of industrialization, highlighting significant investment opportunities in mining, energy, construction, manufacturing, and home appliances.
Deputy Mayor Zhang Dianhu of Rizhao City and Vice Chairman Zhang Renghui of the Jiaxing Municipal People’s Congress Standing Committee have also expressed interest in working with Ethiopian companies. They stated that Ethiopia’s recent reforms, such as a change in the foreign exchange system and the removal of restrictions on foreigners in certain sectors, will boost Chinese investment in the country.
Sebsib Abafira, Vice President of the Ethiopian Chamber of Commerce and Sectoral Association, emphasized the country’s strong trade and investment ties with China. Fiseha Yitagesu, CEO of the Industrial Parks Corporation, emphasized the organization’s one-stop shops for electricity, banks, and waste treatment technology, as well as policy frameworks such as duty-free imports and export promotion schemes.
The forum marked the unveiling of the Ethiopia-China Friendship and Cooperation Committee’s Light-up Villages program and the signing of an agreement with representative enterprises of the three consortiums that are working in Ethiopia.
On related news, some 64 members of the Chinese delegation, who arrived early in Addis Ababa, participated in a Business-to-Government Forum on Tuesday (July 29) at Skylight Hotel, and about 40 Ethiopian government officials from various ministries were in attendance. The two sides discussed ways to strengthen their collaboration in promoting investment in agriculture, energy, and other critical sectors. At the event, the Ethiopian Investment Commission and the Ethiopia-China Friendship and Cooperation Committee signed a letter of intent to collaborate on increasing investment between the two countries.
The Chinese delegation will stay in Ethiopia until August 4, 2024, visiting industrial parks and tourist attractions and meeting with leaders from various institutions.
Premiere Abiy Launches the “5 Million Ethiopian Coders” Initiative
Prime Minister Abiy Ahmed officially launched the “5 Million Ethiopian Coders” Initiative on Tuesday (July 23) at the Science Museum in Addis Ababa. The program was launched as part of the national Digital Ethiopia 2023 strategy, which streamlines Ethiopia’s efforts to bridge the digital skills gap in the country.
Speaking at the inaugural event, PM Abiy said, Ethiopia has hope through a forward-thinking youth population. He said the historic initiative is a great opportunity for the youth and urged the youth to register for the program, to gain essential skills, and acquire international certification. The Premiere further noted, the cohorts of the scheme will not only create innovative local solutions but also become a beacon of hope for our continent.
The Office of the Prime Minister later announced that the initiative is designed to empower the next generation of Ethiopians to actively participate in the growing digital economy. By 2026, the program aims to equip five million Ethiopian youth with foundational digital skills in Web Programming, Android Development, Data Science, and Artificial Intelligence, the Office stated.
The “5 Million Ethiopian Coders” program is a collaborative digital skills initiative between the Governments of Ethiopia and the United Arab Emirates, designed to empower the next generation of Ethiopians to actively participate in the growing digital economy. This program is an offshoot of the historic One Million Arab Coders program, which was announced in 2017 by His Highness Sheikh Mohammed Bin Rashid Al Maktoum at the World Economic Forum.
Ethiopian learners will have the opportunity to gain foundational level skills across three domains: Programming Fundamentals, Data Science Fundamentals and Android Kotlin Developer Fundamentals, for free. Learners will be supported by mentors who will support them on a dedicated community platform to unblock technical questions on a daily basis throughout the 6–7-week course. Upon successful course completion, learners will be awarded skill-based certifications in the aforementioned areas of specialization.
According to the official website of the Ethiopian Coders Initiative (ECI), the core objectives of the Digital Literacy for Ethiopian Youth initiative include:
- Providing basic digital literacy training to 5 million Ethiopian youth by 2026
- Ensuring at least 50% of trainees are young women
- Equipping youth from all regions, with focus on rural areas
- Partnering with schools, TVET institutes and other centers to integrate training into curriculums
- Fostering youth creativity, problem-solving and innovation through the application of digital skills
- Building a sustainable, large-scale program via multi-stakeholder collaboration
As Ethiopia pursues its emergence as a lower-middle- income nation, the ECI stressed, developing digital literacy amongst citizens, especially youth, is crucial for competitiveness and inclusive growth. This large-scale initiative will provide foundational digital skills training to 5 million Ethiopian youth over the next 3 years, while equipping youth with digital literacy will enable them to actively contribute to and benefit from Ethiopia’s development, the ECI further noted.
Ethiopia’s Olympic Team Arrives in Paris for the 33rd Summer Olympic Games
Ethiopia’s Olympic team has arrived in Paris, France, in anticipation of the 33rd Summer Olympic Games, which will take place from July 26 to August 11. The delegation, consisting of 39 athletes, upon their arrival at Paris Charles de Gaulle Airport received a warm welcome from the Ethiopian Diaspora and staff from the Embassy of Ethiopia in Paris.
The team, led by Derartu Tulu, President of the Ethiopian Athletics Federation, was honored with a ceremonial send-off in Addis Ababa before their departure. The event at the national palace was graced by President Sahle-Work Zewde, Speaker of the House of Federation Agegnehu Teshager, Minister of Culture and Sports Shewit Shanka, and President of the Ethiopian Olympic Committee Ashebir Woldegiorgis, among other dignitaries.
In attendance at the 33rd Summer Olympic Games, Ethiopia is anticipating competing in athletics and swimming. The athletics team participating in this year’s Olympics includes prominent figures such as Kenenisa Bekele, a former world record holder; Tigist Aseffa, the women’s marathon world record holder; Lamecha Girma, the 3,000-meter men’s steeplechase record holder; Gudaf Tsegay, a renowned long-distance runner; and other notable athletes.
Ashebir Woldegiorgis, president of the Ethiopian Olympic Committee, briefed the media before the Ethiopian athletes’ departure to Paris, stating the team will participate in various events, including the marathon, 10,000-meter runs, and 5,000-meter runs, further expressing high hopes for the team, which aims for more than four medals at the Paris 2024 Olympics. The athletes’ participation at the Paris Olympics will not only represent their country at the prestigious event but also showcase Ethiopian athletes enduring legacy and talent and also uplift national pride through their performances.
Ethiopia’s participation in the Paris Olympics holds significant diplomatic significance, offering an opportunity on the global stage to showcase its rich athletic excellence, resilience, and talent. Ethiopian athletes’ presence in Paris will play a key role in strengthening diplomatic ties and enhancing positive international perceptions of Ethiopia, highlighting the nation’s contributions to global sports and fostering goodwill among nations.
The Olympics serve as a diplomatic bridge, connecting Ethiopia with the global community through the universal language of sport. The 33rd Olympic Games in Paris will feature 10,714 athletes from 206 countries, including independent competitors.
As the Olympic Games kick off, Ethiopia stands united in support of its athletes, eagerly anticipating their performances and celebrating their achievements on the global stage.
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