The Government of Ethiopia has officially lifted the long-standing restriction that limited the issuance of export licenses for goods destined for the People’s Republic of China exclusively to the Commercial Bank of Ethiopia (CBE).

Effective immediately, all licensed commercial banks operating within the country are fully authorized to process export permits, manage documentary credits, and handle all related financial transactions for trade with China.

For years, Ethiopian exporters targeting the massive Chinese market were legally bound to route their trade finances and permit applications solely through the CBE, under a historical directive (Ref. No. 10-11/097/99).

This restriction was originally anchored in a broader economic and financial cooperation agreement between the governments of Ethiopia and China.

While intended to streamline state-to-state trade relations, the single-bank monopoly often created operational bottlenecks for the private sector, forcing exporters to maintain specific accounts and adapt to the processing times of a single institution, regardless of their existing corporate banking relationships.

According to the official public notice released by the NBE, the decision to eliminate this restriction is a deliberate effort to modernize the nation’s foreign trade framework. By decentralizing the authorization process, the central bank aims to substantially reduce bureaucratic delays, lower transaction friction, and create a highly accessible, agile environment for local businesses.

The central bank emphasized that opening the playing field will naturally enhance the competitiveness of Ethiopia’s export sector on the global stage. Private commercial banks can now leverage their tailored customer service and digital banking platforms to attract exporters, potentially speeding up the influx of much-needed foreign currency into the country.

While the NBE’s new directive hands unprecedented operational freedom to the broader banking industry, it comes with a strong reminder of regulatory oversight. The central bank has instructed all newly authorized commercial institutions to facilitate these China-bound export services in strict compliance with Ethiopia’s existing standard foreign exchange laws and national export regulations.

The National Bank of Ethiopia (NBE) has revised its foreign-exchange directive to allow commercial banks to approve Letters of Credit (LCs) and Cash Against Documents (CAD) for institutions holding foreign-currency and retention accounts without requiring prior approval from the central bank. The NBE also instructed banks to standardize LC-related fees and charges on an annualized, pro-rata basis, while keeping them within the maximum limit previously set by the bank.

The changes, announced on 25 May 2026, form part of the central bank’s broader shift toward a market-based foreign-exchange regime launched in July 2024. The NBE said the latest amendments are aimed at removing approval bottlenecks, improving the efficiency of foreign-exchange transactions and strengthening Ethiopia’s trade finance system.

Under the revised rules, banks may approve LCs on acceptance for clients with foreign-currency or retention accounts without first seeking NBE approval. The same applies to CAD transactions. Account holders under these arrangements may also initiate shipments without prior bank approval, although payment will still depend on the submission and verification of the required documents.

The central bank said the fee rationalization is intended to make LC charges more competitive and align them with international pricing practices. It added that the measure is expected to reduce costs for importers and exporters while supporting the credibility of Ethiopia’s ongoing foreign-exchange reforms.

The NBE said it will continue monitoring developments in the foreign-exchange market and take additional steps if necessary to support stability and efficiency.