AGP Executive Report

Industrial Investment: Ethiopia has opened its first precious-metals refinery, a $50 million joint venture designed to process more than 600 tonnes a year and keep more gold value-added activity in the country. Economic Outlook: The IMF forecasts 9.2% growth in 2026, but warns inflation and the current-account deficit remain risks; inflation is projected at 11.7%. Power Infrastructure: Parliament approved a $145.8 million concessional World Bank loan to upgrade Addis Ababa’s grid, substations and underground lines. Trade and Finance: Ethiopia tightened rules for local marketing of Dangote Petroleum securities, limiting participation to qualified investors, while Ethiopia and Pakistan discussed faster pharmaceutical approvals to expand trade. Technology: Smartphone maker Transsion raised $390 million for AI and product development; the company manufactures in Ethiopia. Connectivity: China Southern launched twice-weekly Guangzhou–Addis Ababa flights, adding a direct link to a major Chinese commercial centre.

Economic Reforms: Ethiopia and the IMF are discussing further technical support for fiscal and monetary reforms, while Moody’s projects the country will record one of sub-Saharan Africa’s largest reductions in debt pressures. Gold Processing: Ethiopia has opened its first precious-metals refinery, a $50 million facility designed to process up to 600 tonnes a year and add value to gold exports. Agribusiness: Trade with Russia is expanding: Russian exports to Ethiopia quadrupled and Ethiopian exports doubled through 2025, with both sides exploring technology transfer and local production. Connectivity: China Southern Airlines has launched a twice-weekly Guangzhou–Addis Ababa service via Changsha, adding air links for trade and tourism. Climate Resilience: Prime Minister Abiy says investment in weather data and early-warning systems is vital for agriculture, aviation and other key sectors as Ethiopia pursues a 74.3% emissions cut by 2030.

Gold Processing: Ethiopia has opened its first gold refinery, a $50 million joint venture with state-owned Ethiopian Investment Holdings as majority shareholder. The facility will process local and regional gold, adding refining and certification services as the country seeks to keep more value on the continent. Gold exports earned Ethiopia $5.6 billion last year. Mining Investment: KEFI Gold and Copper has restarted development at its Tulu Kapi project after suspending work following a fatal incident in September. The phased restart includes reconnecting the site to the power grid, building access roads and arranging replacement housing and land for affected communities. Economic Reforms: Ethiopia and the IMF have discussed macroeconomic stability and reform priorities, while talks with the World Bank covered a new partnership framework focused on private-sector growth, exports, climate-smart agriculture and infrastructure.

Gold Processing: Ethiopia has opened its first precious-metals refinery, a $50 million joint venture at Bole Lemi with capacity to process more than 600 tonnes of gold and silver a year. The government says it will boost export earnings, skilled jobs and local value addition, while attracting metal from neighbouring countries. Economic Diplomacy: An Ethiopian delegation led by National Bank Governor Eyob Tekalign is at the IMF–World Bank meetings in Bangkok to advance the country’s economic priorities and development partnerships. Trade Costs: Djibouti’s ports are handling more transshipment amid Red Sea shipping disruptions, but higher fuel, maintenance and cargo costs are adding pressure to prices and trade routes vital to landlocked Ethiopia. Mining Investment: Kefi has restarted phased development at its Tulu Kapi gold project after suspending work following a fatal safety incident in September; initial work includes power infrastructure and access roads. Debt Outlook: Moody’s expects Ethiopia to record one of the region’s largest government-debt reductions, as it raises its overall sub-Saharan Africa outlook to positive.

Banking: Oromia Bank reported a 49% rise in profit to Br3.82 billion, even as liquidity constraints weigh on the sector. Business Climate: Firms are facing greater foreign-exchange volatility and capital pressure following reforms. Agriculture: A new agricultural bank is expected to begin operating within three months, while engineers are urging more local production of farm machinery. Value Addition: Ethiopia opened its first national precious-metals refinery, designed to process 600 tonnes a year and help shift exports from raw gold to higher-value products. Infrastructure: The government has taken over the stalled Kombolcha railway project as its London arbitration nears conclusion. Aviation Costs: Ethiopian Airlines spent about $6 million on carbon credits last fiscal year and expects the cost to rise.

Saudi Trade: Saudi Arabia was Ethiopia’s top export market in 2025, its ambassador said, pointing to growing investment ties and a bilateral business council exploring opportunities in tourism, education, health and other sectors. India Partnership: India’s foreign minister met Ethiopian Investment Holdings chief Brook Taye to discuss deeper investment, as the two countries seek to expand trade and cooperation. Gold Processing: Ethiopia opened a precious-metals refinery in Addis Ababa with planned capacity to process more than 600 tonnes a year, aiming to export refined bars and retain more value domestically. Infrastructure: State railway workers have taken over the stalled Awash–Kombolcha line and repaired about 70 kilometres; completing the first phase to Kombolcha is targeted within two years, while arbitration with Turkish contractor Yapı Merkezi continues. Finance and Investment: The IMF is urging caution on further capital-account liberalisation, while Ethiopia has authorised sovereign guarantees for strategic investors and given state enterprises three years to write off old receivables. Business Risks: Renewed fighting in the north and rising tensions with Eritrea threaten stability as Ethiopia seeks to attract investment and expand trade.

Value-Added Exports: Ethiopia opened its first national precious-metals refinery in Addis Ababa, designed to process more than 600 tonnes a year. The government says local refining will boost export earnings and jobs, though that figure is the facility’s capacity, not current output. Capital Controls: The IMF says wider capital-account opening must wait until Ethiopia has stronger reserves and safeguards against financial shocks. Gross reserves stood at $5.9 billion in mid-2026, equal to about 2.1 months of imports. Investor Financing: New rules let the Finance Ministry issue capped sovereign guarantees for strategic projects, aiming to improve their bankability while limiting fiscal exposure. Infrastructure and Payments: State railway workers are restoring the stalled Awash–Kombolcha line as arbitration with its former contractor nears a conclusion. Oromia Bank has also launched its first Visa cards, expanding customers’ access to digital payments.

Industrial Investment: Prime Minister Abiy inaugurated a precious-metals refinery at Bole Lemi, designed to process more than 600 tonnes annually and boost domestic value addition, exports and skilled jobs. Investor Guarantees: A new regulation lets the Finance Ministry offer capped sovereign compensation guarantees for strategic projects, aiming to improve their bankability. Transport Links: The government has taken over work on the stalled Awash–Kombolcha railway; about 70 kilometres of track have been repaired as arbitration with the former contractor nears a conclusion. Finance and Banking: The central bank plans tax reforms to remove overlapping charges on interest-free finance, a sector with deposits of 379.1 billion birr by June 2025. Commercial Bank of Ethiopia cut its non-performing loan ratio to 2.15% and says digital channels handle 88.6% of transactions. State Enterprise Reform: Public enterprises have three years to review decade-old receivables for possible write-off, under a new balance-sheet cleanup directive. Trade and Logistics: Addis Ababa will host the FIATA World Congress in 2027, bringing global freight and logistics stakeholders to Ethiopia. Foreign ministers from Ethiopia and India also discussed expanding trade, investment, technology and infrastructure ties.

India–Ethiopia Business Ties: During a visit to Addis Ababa, India’s foreign minister discussed trade, investment, infrastructure and technology with Ethiopian leaders, as both sides seek to deepen their strategic partnership. Digital Payments: Visa and local firm ETTA Solutions plan to widen secure digital payment acceptance for Ethiopian businesses. Digital ID: Ethiopia opened a Fayda sandbox so developers and startups can test authentication services, building on more than 52 million registrations. Growth and Finance: Ethiopia is targeting 10.1% economic growth and has scheduled $840 million in foreign-currency auctions; Fitsum Assefa Adela has been named finance minister. Business Costs: Oil prices have climbed 40% in two months, increasing pressure on the import bill, while a city tax crackdown on car brokers has left showrooms quiet and pushed some asking prices higher. Regional Risk: Escalating Ethiopia–Eritrea tensions threaten to add uncertainty for trade and investment across the Horn.

Regional Risk: Ethiopia and Eritrea traded accusations as renewed Tigray fighting and reports of Eritrean troops in the region fuelled fears of wider conflict. Ethiopian Airlines says Mekelle flights are due to resume October 11. Trade and Investment: India and Ethiopia discussed expanding cooperation in trade, investment and digitalisation during Indian Foreign Minister S. Jaishankar’s Addis Ababa visit. Foreign Exchange: Brent crude rose 40% from July to September while Arabica coffee prices fell 8.2%, threatening to raise Ethiopia’s fuel bill while weakening export earnings. The IMF projects fuel imports of $4.8 billion in 2026/27. Finance: Parliament approved Fitsum Assefa as finance minister as Ethiopia pursues a 10% growth target. Moody’s raised its outlook for sub-Saharan Africa, citing reforms and stronger commodity prices, but the change is not a credit upgrade. Payments: Viamericas expanded remittance services in Ethiopia, adding bank deposits and cash pickup.

Economic Policy: Parliament approved Abiy Ahmed’s new cabinet, naming Fitsum Assefa finance minister as the government targets 10.1% growth and the central bank schedules $840 million in dollar auctions. Cost Pressures: Brent crude rose 40% in two months while coffee prices slipped, squeezing Ethiopia’s import bill as a key export earner weakened. Digital Commerce: ETTA and Visa plan to deploy 148,000 contactless payment devices nationwide, extending card and e-receipt services to small businesses. Cross-Border Payments: Viamericas expanded remittance options in Ethiopia, adding bank deposits and cash pickup; a Chinese AI service is also helping an Ethiopian livestreaming business reach US shoppers. Agriculture: A new livestock genetics platform aims to improve breeding decisions, while soil-restoration work is boosting crop productivity. Business Risk: Eritrean troop incursions and Ethiopian drone strikes near Adigrat raise fresh concerns about conflict disrupting trade and investment.

Cabinet and Investment: Parliament approved Abiy Ahmed’s new cabinet, naming former planning minister Fitsum Assefa as finance minister and former Ethio Telecom CEO Frehiwot Tamiru to lead innovation and technology. The changes come as Ethiopia restructures its debt and seeks more private investment. Growth Outlook: President Taye Atske Selassie projects 10.1% economic growth in 2026/27, after 10.2% in the previous fiscal year. Trade Links: A planned $660 million petroleum pipeline between Djibouti’s storage facilities and Ethiopia’s distribution network is expected to cut costs and strengthen supply chains, with completion targeted in 18 months. Economic Risks: Renewed fighting in Tigray threatens harvests and aid delivery, adding pressure to food supplies and livelihoods as regional tensions rise.

Technology and Investment: Ethiopia says it is expanding AI, applied research and support for start-ups, aiming to build homegrown digital solutions and new industries. Harvest Risks: One of the driest kiremt rainy seasons on record threatens crops across parts of Tigray, Amhara, Afar and Oromia. With the meher harvest providing over 85% of national crop production, food prices are expected to face further pressure as conflict also disrupts aid. Growth and Finance: Ethiopia is targeting 10.1% economic growth and has scheduled $840 million in foreign-currency auctions. Moody’s has turned positive on sub-Saharan Africa’s outlook and expects Ethiopia to record one of the region’s largest debt declines. Mining: Allied Gold reported resource growth at its Ethiopian mine as the Kurmuk project completes commissioning and begins operations. Regional Outlook: The World Bank raised its 2026 sub-Saharan Africa growth forecast to 4.3%, but warned that growth remains too weak to deliver enough jobs or significantly reduce poverty.

Mining: Allied Gold says commissioning is advancing at its Kurmuk mine, with first gold expected soon. The project is planned to produce at least 240,000 ounces a year, while exploration could extend its mine life. Foreign Exchange: The National Bank of Ethiopia plans six dollar auctions worth $840 million in the second quarter, a 68% increase on the previous quarter, as the government targets 10.1% economic growth. Growth Outlook: The World Bank lifted its 2026 Sub-Saharan Africa growth forecast to 4.3% and included Ethiopia among countries with improved prospects, but warned that growth is not yet creating enough jobs or reducing poverty fast enough. Currency Market: Birr rates barely moved across banks last week, though the gap between the highest and lowest buying rates meant a $1,000 sale could bring sellers 5,255 birr more at Oromia Bank than at Global Bank.

Ethiopia Economic Outlook: President Taye Atske Selassie told parliament Ethiopia targets 10.1% growth in the 2026/27 fiscal year, building on 10.2% last year, with priorities including revenue gains, public services, peace and stronger foreign relations. Tigray Conflict & Business Disruption: In Mekelle, government-allied forces say drone strikes are ongoing as fighting resumes after the TPLF’s pullback; residents report markets reopening but cash shortages and limited supplies still slow normal trade. Regional Diplomacy & Risk: The EU warned Ethiopia and Eritrea to de-escalate after embassy closures and expulsions, saying the confrontation could spread across the Horn and urging full implementation of the 2022 cessation deal. Cross-Border Nutrition Push: Nigeria’s VP Kashim Shettima arrived in Addis Ababa to lead a Nigeria–Ethiopia Nutrition Leadership Exchange, with site visits to farms and nutrition-linked facilities as both sides share delivery models. Capital Markets Reform: Ethiopia’s Capital Market Authority is drafting an investor compensation framework for eligible foreign portfolio investors, aiming to boost international participation while tightening custody, repatriation and oversight rules. Energy & Industry Costs: Unilever invested Sh70m in an 800kW solar system at its Nairobi plant to cut energy costs and emissions, highlighting how renewables are becoming a competitiveness lever across East Africa. Food Systems Debate: A commentary on African adapted crops warns against repeating old, buyer-driven commercial farming models even as productivity and market links are pursued.

Ethiopia’s New Government Priorities: President Taye Atske Selassie opened Ethiopia’s 7th parliamentary year with a push for peace, structural transformation, better public services, and stronger foreign relations, alongside a target of 10.1% economic growth for the 2019 fiscal year and plans to expand electricity, health insurance, tourism, and project execution. Parliament Leadership: Ahmed Shide was elected Speaker of the House of Peoples’ Representatives, with Ayelech Eshete as deputy, as Ethiopia formalized Abiy Ahmed’s renewed five-year mandate. Horn of Africa Diplomacy: Egypt, Eritrea, Somalia and Sudan issued a joint declaration in New Alamein calling for dialogue and insisting Red Sea governance belongs to coastal states, while the EU warned Ethiopia’s renewed fighting could trigger a wider regional conflict. Inflation Credibility Debate: Economists in an EEA survey questioned Ethiopia’s official inflation data, NBE independence, and the credibility of the single-digit inflation push. Digital Payments Boost: M-PESA Ethiopia and Yenetta Code trained 100 young developers in a cashless hackathon bootcamp ahead of a mid-October fintech challenge. Mining Update: Allied Gold reported exploration progress at Ethiopia’s Kurmuk Mine, supporting mine-life extension as commissioning moves toward first ore and first gold. Regional Security Pressure: Reports also point to renewed fighting and forced recruitment concerns in Tigray, raising humanitarian and business-operating risks across the north.