AGP Executive Report

Ethiopia–Tigray Peace Tensions: A former TPLF chairman, Aregawi Berhe, says the federal government’s Pretoria Peace Agreement efforts were not reciprocated and warns the group is rebuilding military capacity through recruitment, raising fears of renewed conflict. Urban Growth & Governance: Ethiopia’s rapid urban transformation is reshaping the economy beyond Addis Ababa, with expanding corridors, industrial parks and modern housing turning cities into engines for investment and jobs. Coffee Sector Outlook: USDA forecasts Ethiopia’s 2026/27 green coffee production rising 4.7% to 12.1m 60-kg bags, with exports up 2.4% to 7.13m, supported by improved yields and modernization efforts. Cybersecurity Law: Ethiopia’s parliament unanimously passed a law to protect critical infrastructure from cyberattacks, covering telecoms, energy, finance, transport and digital public services. Regional Security & Trade Context: With Red Sea shipping under strain, Ethiopia’s sea-access quest is framed as tied to regional security and shared prosperity. Global Midwifery Visa Snag: At least 20 key midwifery experts, including from Ethiopia, were denied visas for a major Portugal conference, threatening progress on cutting maternal and newborn deaths.

Tigray Peace Tensions: Ethiopia’s former TPLF chairman Aregawi Berhe says the federal government’s Pretoria Peace Agreement efforts were not reciprocated, accusing TPLF of regrouping and rebuilding military capacity through recruitment, while warning that international silence could destabilize the Horn. Urban Growth & Industry Push: A new analysis highlights Ethiopia’s rapid urban transformation as roads, industrial parks, housing and corridor projects shift the economy from rural dominance toward city-led growth. Coffee Outlook: USDA forecasts Ethiopia’s coffee production rising 4.7% to 12.1m 60-kg bags in 2026/27, with exports up 2.4% to 7.13m, supported by better yields and modernization efforts. Cybersecurity Law: Ethiopia’s parliament unanimously passed a law to protect critical infrastructure from cyberattacks, covering telecoms, energy, finance, transport and digital services. Finance & Investment Banking: United Capital expands in East Africa, securing investment banking licences in Ethiopia and Rwanda, positioning itself as an early foreign entrant. Energy & Trade Risk: A report flags environmental risks from the East African Crude Oil Pipeline, warning of impacts on wildlife corridors and livelihoods as oil transport ramps up. Coffee Sector Modernization: Ethiopia’s coffee sector is also framed as moving toward traceable, modern production with government support and growing farmer participation. Ethiopia-Russia Ties: Russia’s ambassador says cooperation with Ethiopia has reached an unprecedented level across trade, education, technology and science, with cultural diplomacy strengthening people-to-people links.

Ethiopia Budget & Growth Outlook: Ethiopia’s Finance Minister Ahmed Shide told parliament the economy is projected to grow 10.1% in 2026/27, with industry up 12.6%, agriculture 7.6% and services 9.9%, alongside a record 2.33 trillion birr draft federal budget aimed at sustaining reform gains. Exports Watch: Ethiopia also reported export earnings of over $9.8bn in the first 11 months of the fiscal year, up 36.1% year-on-year, as the trade ministry pushes to keep momentum. Industrial Transformation: Addis Ababa’s new industrial transformation push highlights a performance-based incentive framework for investors, shifting tax benefits toward measurable results. Digital Finance & Banking: Ethiopia will host the 29th Connected Banking Summit in August, spotlighting digital banking modernization as Ethiopia’s financial sector expands. Investment & Hospitality: IFC is set to lend $80m to MIDROC Ethiopia for the Sheraton Addis revamp, part of a broader push for higher-end, greener hospitality. Regional Security Risk: Ethiopia again warned of a potential Tigray offensive against the federal government, raising fresh concerns for business continuity and stability. Humanitarian & Refugee Economy: A DREAMS programme evaluation in Ethiopia and Uganda found entrepreneurship-plus-market support can cut extreme poverty, boosting consumption and savings for refugee and host communities. Trade Facilitation Beyond Borders: Egypt extended customs facilitation for transit shipments for six months, easing clearance through Egyptian ports for routes that include Ethiopia and other African markets.

Federal Budget Push: Ethiopia’s draft 2026/27 federal budget is set at 2.339 trillion birr, aimed at sustaining gains from the Homegrown Economic Reform Agenda while backing investment in infrastructure, agriculture, industry and social services. Inflation & Growth Outlook: Finance Minister Ahmed Shide says coordinated monetary-fiscal reforms are driving faster growth (projected around 10.1%) while inflation pressures ease. Iran War Cost Pressure: Spending is expected to rise mainly due to Middle East crisis impacts, with the finance minister citing higher fuel subsidy costs; the budget deficit is forecast at 1.4% of GDP. Exports Momentum: Ethiopia reports export earnings of over $9.8bn in the first 11 months, up from $7.21bn a year earlier, with the government targeting about $10.5bn by year-end. Vehicle Registration Overhaul: Addis Ababa starts issuing new national vehicle plates to replace region-based IDs, using “ETH” plus RFID/QR features to curb fraud and streamline enforcement. Hospitality Finance: IFC approves an $80m loan for MIDROC Ethiopia to expand and refurbish Sheraton Addis and develop a new Sheraton property, targeting thousands of jobs and green-certified hospitality. Digital & Education Links: China and Ethiopia sign an agreement to expand Chinese language education in Ethiopia’s schools. Agri-Data Skills: CIMMYT and Ambo University train Ethiopian researchers in applied research and statistical modelling using R to strengthen evidence for food security. Regional Security Update: Flights to and from Tigray are cancelled amid escalating tensions, alongside reports of a draft Tigray proclamation for national mobilisation.

Hospitality Investment: IFC is set to lend $80m to MIDROC Ethiopia to refurbish Sheraton Addis and build a new Sheraton hotel in Addis Ababa, with the project aiming to add premium rooms, support tourism jobs, and deliver Ethiopia’s first “green-certified” hotels ahead of COP32 in 2027. Banking Expansion: Stanbic/Standard Bank is weighing a greenfield move into Ethiopia as it navigates the 49% foreign ownership cap, while pointing to progress from earlier telecom-linked entry experience. Green Entrepreneurship: Reach for Change Ethiopia and partners backed circular-economy startups through its Green Innovation Lab and Green Business Incubator, including waste-recycling and reuse ventures supported by IKEA Foundation funding. Conservation Trade-offs: A new Nature study says Ethiopia’s protected areas slowed deforestation and farm expansion, but also found nearby communities may face reduced food security and wellbeing, highlighting tough policy trade-offs. COP32 Prep: Ethiopia’s COP32 president-designate Gedion Timothewos briefed African ambassadors on preparations, with UNECA and regional support reaffirmed. Regional Context: A global peace report warns Kenya’s election period could face economic spillovers from Middle East and Horn conflicts, underscoring wider regional risk for business planning.

Banking Expansion: Stanbic Bank (Standard Bank group) is weighing a greenfield entry into Ethiopia, but says the 49% foreign ownership cap makes minority positions difficult, even as it remains confident in the market and points to improving performance in its Ethiopian telecom client. Tourism Finance: IFC will lend $80m to MIDROC Ethiopia’s hospitality arm to refurbish Sheraton Addis (Luxury Collection) and develop a new Sheraton hotel, targeting thousands of jobs and stronger tourism-linked employment. COP32 Readiness: Ethiopia’s COP32 president-designate Gedion Timothewos briefed African ambassadors in Addis Ababa on preparations, with partners reaffirming support. Sea Access & Regional Trade: A senior Ethiopian lawmaker says renewed talks on Ethiopia’s sea access are tied to regional security and shared prosperity, with economic and strategic consequences from landlocked status. Green Entrepreneurship: Stakeholders backed circular-economy green entrepreneurs, celebrating Reach for Change Ethiopia’s Green Innovation Lab and Green Business Incubator cohorts and waste-to-value initiatives. Housing Tech Push: Ethiopia showcased 3D printing, light steel prefabrication, and container housing at a demo site aimed at cutting build times to days or weeks. Agriculture Investment: Ethiopia reports agricultural investment is expanding food security, import substitution, and export earnings, with millions of hectares under investment and thousands of investors. Ethiopia FX Watch: The birr saw a modest 0.38% weekly decline, suggesting an orderly crawl amid a still-divided market. Ebola Preparedness: Ethiopia is listed among high-risk countries in the WHO-declared Ebola PHEIC response, with enhanced travel screening highlighted. Energy & Jobs via Finance: Akobo Minerals says mining and processing restarted after April fuel disruptions, with operations largely back to normal by May. Hospitality Growth: Allied Gold also flagged ongoing development progress at its Kurmuk Gold Project in Ethiopia alongside portfolio updates.

Ethiopia’s Capital Market Opens Further: The Ethiopian Capital Market Authority licensed Nigeria’s United Capital Financial Services PLC to operate as an investment bank in Ethiopia, making it the first foreign institution to get an investment banking licence in the country and expanding licensed capital market service providers to 18. FX Pressure Update: The National Bank of Ethiopia postponed its latest foreign-exchange auction due to “unforeseen technical issues,” after banks bid about $1bn against a $100m offer, as the birr continues to face strong dollar demand. Cybersecurity and Trade Rules: Ethiopia’s House of People’s Representatives approved draft laws on cybersecurity for key infrastructures and a revised customs proclamation aimed at curbing contraband and aligning customs with international commitments. Budget Forward Motion: The Council of Ministers passed a draft federal budget of over 2.3 trillion birr for the upcoming EFY, covering recurrent and capital spending, support to regions, and SDG priorities. Elections Watch: Ethiopia held parliamentary and regional elections on June 1, with results still pending and concerns raised over inclusiveness amid insecurity and non-participation by some parties. Agribusiness Innovation: Red Fox Ethiopia inaugurated the country’s first beneficial insect breeding center to reduce pest control chemical use and cut foreign currency spending on imported inputs. Digital Trade Links: Dubai Chamber concluded Africa trade missions with 1,460 bilateral meetings across Ghana, Ethiopia and South Africa, boosting private-sector partnerships.

Cybersecurity & Customs Reform: Ethiopia’s House of People’s Representatives approved draft laws on cybersecurity for key infrastructures and a revised customs proclamation, aiming to curb cyberattacks, reduce contraband, align with international commitments, and support manufacturing and investment. Budget Push: The Council of Ministers forwarded a 2.34 trillion Birr federal budget draft for the 2026/27 EFY to Parliament, alongside a new medium-term macro-fiscal framework tied to Ethiopia’s reform agenda. Capital Market Milestone: United Capital, a Nigerian investment banking group, received Ethiopia’s first foreign investment banking licence, with plans to operate via a local subsidiary and expand capital market services. Retail Ownership Step: Ethio telecom’s listing on the ESX under TELE enables verified retail shareholders to move toward secondary trading, widening citizen participation in national wealth. Elections & Data Fight: A delayed national census is set to return to Parliament as a dispute over who controls demographic facts, while the upcoming election faces challenges including insecurity and Tigray’s absence from voting. Aviation Expansion: Ethiopian Airlines is evaluating bids for 25 new narrow-body jets, with a decision expected within three months as fuel costs remain a pressure point. Regional Trade Linkages: Dubai Chamber concluded Africa trade missions, holding 510 bilateral meetings in Ethiopia as part of efforts to deepen trade and investment partnerships.

BRICS Agriculture Talks: A five-day BRICS Agriculture Working Group meeting kicked off in Indore, with Ethiopia among member states, aiming to agree on food security, climate-smart farming, agricultural trade, and farmer welfare, with a joint declaration expected after ministers meet June 12-13. Ethiopia Food Safety Push: The Ethiopian Food and Drug Authority (EFDA) warned unsafe food is still a major illness driver and urged stronger collaboration across regulators, industry, academia, and partners, alongside better lab capacity and quality management systems. Investment Banking Expansion: United Capital says it has become the first foreign institution licensed to provide investment banking services in Ethiopia, following approvals in Rwanda, signaling deeper capital market activity and advisory, brokerage, and portfolio services. Ebola Preparedness Funding: Africa CDC and WHO launched a unified Ebola preparedness and six-month response plan for June-November 2026, targeting $518m to strengthen surveillance, labs, clinical care, and cross-border coordination. Health Aid Conditions: Human Rights Watch says US health agreements tied to Ethiopia and others include “troubling conditions,” including access to sensitive health data and extractive-linked terms. Trade Diplomacy: Ethiopia’s honorary consul in Pakistan met Sindh’s governor to discuss expanding bilateral trade and investment in sectors like pharma, textiles, leather, chemicals, and packaging.

Food Safety Push: Ethiopia’s EFDA says unsafe food is still a major illness driver and calls for tighter collaboration across regulators, industry, labs, academia and development partners to improve food safety systems. Dairy Innovation: EIAR unveiled “Etittuu,” a probiotic starter culture to boost milk fermentation, cut reliance on imports and strengthen Ethiopia’s dairy value chain. Capital Markets Opener: Nigeria’s United Capital won Ethiopia’s first foreign investment banking licence, set to operate from Addis Ababa with over $1.5m capital. Solar Manufacturing Watch: Toyo announced a $357m, 1.5GW HJT solar cell plant in Houston, highlighting how U.S. policy incentives and supply-chain rules are shaping global solar investment plans. Ethiopian Airlines Growth: The carrier is weighing an order for 25 new narrow-body jets to expand domestic and regional connectivity, with decisions expected soon. Industrial Strategy: A new report says Ethiopia is shifting from building factories toward productivity, technology, domestic participation and higher-value industrial ecosystems.

Red Sea Access Push: Ethiopia’s election-week campaign for Red Sea access intensified, with officials repeating claims despite needing consent, aiming to pressure littoral states by normalising the narrative. Ethiopian Airlines Fleet Watch: Ethiopian Airlines says it will decide within three months on new regional and cargo aircraft orders, while higher jet-fuel costs from the Middle East conflict are squeezing margins. Capital Markets Milestone: Ethiopia’s Capital Market Authority granted Nigeria’s United Capital Group the country’s first foreign investment banking licence, paving the way for more foreign capital and expertise in Addis Ababa. Ethiopia’s BRICS Engagement: Ethiopia took part in the 11th BRICS Foreign Policy Dialogue in New Delhi, highlighting climate action, digital transformation, and infrastructure progress. YADEA Electric Mobility in East Africa: YADEA debuted in Kenya at Autoexpo Kenya 2026 with its Africa-focused KIFA commercial e-motorcycle, targeting battery swapping and faster rollout of green transport. Fuel Price Shock Debate: A regional energy piece warns that oil-import dependence is turning fuel price spikes into business and household crises across East Africa. South Africa Migration Tensions: Ramaphosa promised action on illegal migration concerns while distancing the government from vigilante immigration checks amid rising xenophobia. Nestlé Climate-Resilient Coffee: Nestlé is developing six high-yield, climate-resilient robusta varieties with Ivory Coast researchers to protect coffee farmers as climate risk rises.

Ethiopian Airlines Fleet & Fuel Pressure: Ethiopian Airlines says it will make decisions soon on new aircraft orders, but higher jet-fuel costs are biting hard after Middle East war disruptions. The airline says fuel costs jumped from about 40% of expenses to 54%, with supply now diversified (including Nigeria) and a longer Saudi contract; it is cutting costs, rationalizing routes, and using fares plus a fuel surcharge to protect profitability. A220 Order Decision: Ethiopian Airlines CEO Mesfin Tasew Bekele says the airline is likely to decide within three months on an order for 25 regional jets (Airbus A220, Embraer E-2, and Boeing 737 MAX 7) to expand domestic and regional connectivity. IMF Support for Ethiopia: The IMF says it is stepping up funding for at least four African countries affected by the US-Israel war on Iran, including Ethiopia, where staff will propose accelerated access to a $200m tranche alongside a $468m tranche cleared for release. Ethiopia Election & Governance: Coverage highlights Ethiopia’s 7th general election as peaceful and orderly, alongside broader claims of democratic momentum, economic reform, and regional leadership. Tigray Security Tension: A dissident authority in Tigray alleges a deadly drone strike near Shiraro, warning of renewed conflict risk. BRICS Diplomacy: Ethiopia participated in the 11th BRICS Foreign Policy Dialogue in New Delhi, emphasizing climate action (Green Legacy), digital and economic transformation, and green finance cooperation. Payments & Inclusion: EthSwitch reports EthioPay-IPS hit 1 million daily transactions, signaling momentum in Ethiopia’s digital payments push.

IMF Support for Ethiopia: The IMF says it is stepping up financing for at least four African countries affected by the US–Israel war’s spillovers, with Ethiopia set for accelerated access to a $200m tranche under its existing program, paving the way for a wider $468m disbursement this week. Green Mobility Push: Ethiopia’s move to ban traditional internal-combustion vehicle imports is creating early opportunities for investors in cleaner transport, with Nordic partners also signaling support for Ethiopia’s EV ambitions ahead of COP32. Payments & Inclusion: EthSwitch says EthioPay-IPS has surpassed 1 million daily transactions, processing over ETB 5bn, reinforcing momentum in Ethiopia’s digital payments ecosystem. Carbon Rights Framework: Ethiopia is drafting a centralized federal proclamation for carbon market ownership, setting the federal government as default owner of carbon rights unless contracts specify otherwise—reshaping how local forest owners and developers can trade credits. Regional Trade Lifeline: Coverage highlights how the Djibouti–Ethiopia corridor remains a shared economic engine, with most Ethiopian trade routed through Djibouti’s port activity. Security Watch: A deadly drone strike in Ethiopia’s Tigray region has raised fresh fears of renewed conflict, with tensions still linked to the incomplete peace process.

IMF & Ethiopia Macroeconomy: Ethiopia’s tight monetary policy has won IMF praise, paving the way for a near-$500m disbursement, after an IMF staff-level deal on the review and a reported $468m support package. Green Finance & Carbon Rights: Ethiopia is moving toward a centralized framework for forest carbon rights, with a draft proclamation set to make the federal government the default owner of carbon credits and mitigation outcomes, reshaping how communities and developers trade globally. E-Mobility & Investment: Nordic partners are backing Ethiopia’s EV ambitions ahead of COP32, while Ethiopia’s e-payments push continues as EthSwitch/ EthioPay-IPS hits 1m daily transactions and processes over ETB 5bn. Regional Trade & Diplomacy: Ethiopia and Canada have launched a new chamber of commerce to deepen commercial ties; Ethiopia and Pakistan agreed to forge a stronger parliamentary bond covering trade, investment, agriculture and aviation. Energy & Integration: GERD is highlighted as a catalyst for regional integration and cooperation across the Horn, with calls for more research to protect Ethiopia’s Nile water rights. Sports & Youth: Ethiopia’s U-17 women miss CECAFA due to financial constraints, despite World Cup qualification momentum. Business Climate: AU says it will adopt an austerity budget for 2027 amid staffing and budget shortfalls.

Ethiopia–Pakistan Diplomacy: Ethiopia and Pakistan agreed in Islamabad to forge a stronger parliamentary bond, aiming to deepen cooperation in trade, investment, agriculture, aviation and culture. Ethiopia–Canada Trade: Ethiopia and Canada launched a new chamber of commerce in Addis Ababa to boost business links and investment. Nile Basin Integration: At Assosa University, officials said GERD is not just an energy project but a tool for regional integration and cooperation across the Horn, calling for more research to protect Ethiopia’s Nile rights. Industrial Policy for Locals: Ethiopia’s IDPC will cut service fees and offer four years of free access to selected industrial parks to help domestic manufacturers scale up and create jobs. Digital Payments Push: EthSwitch reported hitting 1 million daily EthioPay-IPS transactions, signaling momentum in financial inclusion. Tech Skills Network: Afretec added Addis Ababa Science and Technology University as its 10th partner, expanding university collaboration for digital growth. E-mobility for Climate: UNECA said Ethiopia’s e-mobility strategy supports a low-carbon economy and reduces costly imported fuel dependence.

Tech & Infrastructure: Smart Hands Africa was appointed an authorised Services Partner for Supermicro, expanding post-sales installation, maintenance, break-fix support and consulting across multiple African markets including Ethiopia. Industrial Policy: Ethiopia’s Industrial Parks Development Corporation (IDPC) introduced reduced service fees and four years of free access to selected industrial parks for eligible domestic manufacturers, aiming to grow local firms and jobs. E-Mobility & Climate: UNECA says Ethiopia’s e-mobility strategy is cutting emissions and reducing dependence on imported fossil fuels, while improving energy security. Ethiopia Election & Diplomacy: Reports highlight large-scale voter participation and observer assessments of Ethiopia’s June 1 election, while Russia’s foreign ministry welcomed the process as peaceful and democratic. AfCFTA Implementation: Ethiopia and Togo are reviewing AfCFTA progress under AFIRM, focusing on legal and operational gaps that have slowed trade uptake. Regional Ties: South Sudan’s deputy mission head says both countries want to deepen cooperation with Ethiopia, including through connectivity projects. Payments & Inclusion: EthSwitch reported 1 million daily EthioPay-IPS transactions, signaling momentum in Ethiopia’s digital payments ecosystem. Global Finance: Ethiopia’s $1bn Eurobond restructuring talks reportedly failed again, raising pressure for alternative funding or faster domestic revenue mobilisation.