Ethiopia’s macro-economic reform agenda has continued yielding tangible results, ushering in a new chapter of financial modernization and resilience. The recent Finance Forum held at the Science Museum here in Addis Ababa provided not only a platform for reflection but also a timely affirmation that the country’s century-old financial system is finally adapting to the demands of the 21st century.
President Taye Atske Selassie’s remarks at the forum underscored a profound truth: reform is not a mere technical adjustment—it is a strategic national imperative. His acknowledgement of Ethiopia’s progress in aligning its financial sector with international standards and digital innovation is an important milestone. More significantly, this progress has caught the attention of global institutions like the International Monetary Fund (IMF) and the World Bank (WB)—a sign of growing trust in Ethiopia’s economic management.
One of the clearest indicators of success is the elimination of domestic borrowing, announced by National Bank of Ethiopia Governor Mamo Miheretu. For the first time in 12 years, the government has broken from a cycle of unsustainable fiscal dependence—a move that not only reduces inflationary pressures but also sends a strong message to investors and development partners: Ethiopia is serious about financial discipline.
The impact of this shift cannot be overstated. For decades, inflation and market instability have plagued Ethiopia’s economy, largely due to short-term borrowing and inefficient financial practices. The decision to stop borrowing domestically marks a turning point in economic governance, potentially laying the foundation for a more stable macro-economic environment.
Further, Governor Mamo pointed to improvements in foreign exchange management—a long-standing area of concern for both local businesses and international investors. With growing foreign reserves and a narrowing gap between official and parallel market exchange rates, Ethiopia is addressing one of the most persistent challenges in its economic landscape. As a result, businesses are beginning to access much-needed forex, unlocking productivity, trade potential, and economic inclusivity.
But beyond numbers and statistics lies a more important narrative—one of restored confidence. The attention and renewed engagement from global financial institutions are not coincidental. They reflect Ethiopia’s demonstrated commitment to reform, transparency, and fiscal responsibility. This momentum must now be safeguarded and expanded through continued engagement with the private sector, which remains a critical engine for innovation, employment, and investment.
The call by President Taye for private sector involvement in financial technology (FinTech) solutions is both timely and strategic. As digital platforms redefine financial inclusion across the continent, Ethiopia must seize this opportunity to modernize its banking infrastructure, support digital payments, and empower underserved communities through mobile banking and inclusive credit services.
The Finance Forum, which brought together policymakers, regulators, and private sector leaders, is a commendable step toward fostering a coordinated, transparent, and inclusive approach to financial sector reform. Policy dialogue is essential not only for diagnosing persistent bottlenecks but also for ensuring that reforms are both equitable and sustainable.
Still, the path ahead is not without challenges. Ensuring macro-economic stability, improving access to finance for small and medium enterprises (SMEs), and building trust in financial institutions will require continued commitment. Strengthening regulatory frameworks, bolstering public-private partnerships, and deepening financial literacy must be the next frontiers of reform.
In sum, Ethiopia is demonstrating that bold policy decisions, grounded in economic discipline and global cooperation, can unlock enduring transformation. The achievements seen in the past few months must now serve as the foundation for broader, deeper reforms that will define Ethiopia’s financial future.
The time to build on this momentum is now. Let the success of the current reforms inspire even greater ambition and collaboration—for a stronger economy, for sustainable development, and for all Ethiopians.
THE ETHIOPIAN HERALD SATURDAY 17 MAY 2025
