Ethiopia ranks near the bottom globally for child survival, with an under‑five mortality rate placing it 135th out of 147 countries in the latest UN Inter‑agency Group for Child Mortality Estimation (UN IGME) report, underscoring persistent gaps despite decades of health investments.
Sub‑Saharan Africa bears 58 per cent of worldwide under‑five deaths at 2.83 million in 2024, with a regional rate of 71.6 deaths per 1,000 live births, 19 times higher than Australia/New Zealand. Ethiopia’s rate reflects this burden, lagging far behind global averages amid conflict, fragility and stalled SDG progress.
Nearly half of all under‑five deaths now happen neonatally (first 28 days), up from 41 per cent in 2000, with prematurity (17 per cent), pneumonia (13 per cent) and birth asphyxia/trauma (10 per cent) topping causes globally – patterns mirroring Ethiopia’s challenges. In sub‑Saharan Africa, infectious killers like malaria, pneumonia and diarrhoea claim one in three post‑neonatal lives, compounded by malnutrition.
Progress has slowed sharply since 2015: the region’s under‑five annual reduction rate fell from 3.8 to 2.0 per cent, neonatal from 1.9 to 1.0 per cent. Ethiopia, classified as fragile/conflict‑affected, sees rates nearly triple the non‑fragile average (74.1 vs. 25 per 1,000).
Rural poverty, low maternal education and short birth intervals double risks, with boys slightly more vulnerable biologically. Off SDG track, Ethiopia must at least double its decline pace for 2030 targets – or risk 27.3 million global under‑five deaths by then, 62 per cent in sub‑Saharan Africa.
UN IGME urges Ethiopia to prioritize newborn care, immunization, nutrition and primary services in fragile zones to avert millions more deaths – achievable if high‑burden nations match high‑income averages (5.1/1,000).
The National Bank of Ethiopia (NBE) has announced a significant change in its regulatory approach, focusing on the “shadow” financial sector to mitigate systemic risks and promote fair market competition. NBE Vice Governor Solomon Desta emphasized the importance of this initiative for national financial stability, revealing that Savings and Credit Cooperative Societies (SACCOs) and pension funds will soon be subject to rigorous central oversight.
For decades, Ethiopia’s financial landscape has been divided. On one side are commercial banks and microfinance institutions, which are closely regulated by the NBE. On the other are SACCOs and large pension funds, which handle billions of Birr but operate under fragmented regulations.
SACCOs, in particular, have transformed from small community-based entities into significant financial players. Traditionally governed by the Ethiopian Cooperative Commission rather than the NBE, these institutions have benefited from lower regulatory costs and lighter capital requirements compared to commercial banks.
Vice Governor Solomon highlighted that “some SACCOs are now competing with licensed and regulated financial institutions.” He cautioned that “if we want a stable and robust financial system, this regulatory gap can no longer persist.”
The Governor pointed out that a modern financial system cannot thrive while substantial capital accumulations remain unregulated. With some SACCOs now rivaling commercial banks in scale, he warned that a liquidity crisis in one could lead to a “contagion effect” throughout the economy. The reform will also extend NBE oversight to pension funds.
The NBE defines “Regulatory Arbitrage” as the practice where financial institutions exploit sectors with looser oversight to gain an unfair market advantage. In Ethiopia, this manifests when cooperatives offer inflated interest rates or loan terms that banks, constrained by strict NBE reserve and prudential requirements, cannot match.
The concern extends beyond unfair competition to encompass systemic stability. Without NBE oversight, these institutions lack the safety nets available to the banking sector, such as the Ethiopia Deposit Insurance Fund.
Narayana SL, Managing Director of Skydive Consulting, stated, “If a large SACCO or pension fund encounters a liquidity crisis, the repercussions for the overall economy could be catastrophic. You cannot implement a ‘Homegrown Economic Reform’ while leaving billions in assets unregulated.”
Currently, the NBE acts more as an owner than a supervisor, but it plans to introduce strict investment guidelines to safeguard the lifelong savings of millions of Ethiopians. This will prevent pension assets from being invested in high-risk projects or non-performing government debts.
While industry experts support this initiative, they caution that implementation may be challenging. Consolidating thousands of community-based associations will require a significant digital transformation and must be executed carefully to avoid undermining financial access for lower-income segments of society.
Although pension funds currently report to the NBE, the bank is seen more as a “passive owner” than an active supervisor. The Vice Governor made it clear that the era of “indirect” oversight has ended. The NBE is now advocating for pension funds to be treated as systemic financial institutions, requiring them to adhere to strict investment guidelines, actuarial supervision, and transparent reporting.
Integrating these institutions into the regulatory framework presents significant challenges. The experience of six large microfinance institutions that transitioned to commercial banks demonstrated that moving to a higher level of regulation demands considerable human resources and the development of digital infrastructure.
The National Bank is currently collaborating with the Ethiopian Cooperative Commission to study how to incorporate SACCOs into the regulatory framework without compromising their social utility. Additionally, recommendations are being made to policymakers to empower the National Bank of Ethiopia (NBE) to directly supervise pension funds.
These developments were showcased at the 13th International Microfinance Conference in Addis Ababa, organized by the Association of Ethiopian Microfinance Institutions (AEMFI) in partnership with the European Union and the International Fund for Agricultural Development (IFAD).
Teshome Kebede, CEO of AEMFI, noted that while the microfinance sector has supported nearly 5 million citizens over the past 28 years, both global and national financial landscapes are shifting rapidly. “Customer needs from five or six years ago are vastly different from today and what will be expected in the future,” he stated, emphasizing that institutions can no longer rely on traditional, slow processes and must embrace customer-centric services.
The evolving financial sector in Ethiopia—marked by the entry of foreign banks and licensed Fintech firms—will intensify competition. To remain viable, institutions must prioritize digitalization, enabling customers to access services via mobile phones from anywhere.
In addition to technological advancements, there is a call for institutions to modernize service delivery by aligning loan and savings products with the living conditions of customers, focusing on innovation, and creating accessible financial options for youth and women to broaden their market reach.
Currently, there are 62 microfinance institutions in the country. It is crucial for these institutions to leverage international experience and address capacity gaps to effectively reach the millions of citizens still lacking access to essential services.
Investors in Ethiopia’s industrial parks have reported that shortcomings in banking procedures and restrictions on fund transfers between banks are imposing significant hardships and unnecessary costs.
These concerns were raised during a consultative forum attended by officials from the National Bank of Ethiopia, the Industrial Parks Development Corporation (IPDC), and various commercial banks.
A primary issue highlighted by investors was their inability to freely transfer their own capital between banks. This restriction not only limits their financial flexibility but also creates obstacles when they need to manage funds for various purposes. As one investor lamented, “We have become prisoners of our own money due to the limits set by banks.”
A representative from Everest Apparel in the Hawassa Industrial Park underscored the severity of the situation, stating, “We should have full freedom to transfer funds held in our company’s name to another bank for better financial management; however, we are completely restricted. This is deeply frustrating.”
Additionally, delays in processing foreign currency (USD) payments by bank professionals have resulted in substantial losses for companies. Payments for land rent and immigration fees to government institutions have been delayed for over a week, forcing investors to incur a daily penalty of $30.
“This is a clear injustice against our company,” the representative added, emphasizing that since the delays were caused by the bank and not the company, it is unfair for the investor to bear such penalties.
Furthermore, the prohibition on earning interest on foreign currency held in bank accounts for extended periods has become another significant grievance.
Investors have reported that when they seek to place their funds in Time Deposits to earn interest, banks deny their requests, citing “no directive.” They have called for clarification on whether this is a regulation from the National Bank of Ethiopia or an internal policy of commercial banks.
A representative from NASA Garment in Hawassa Industrial Park elaborated on how the banking system overlooks the practical needs of the industry. He noted that banks’ persistent focus on property collateral for lending presents a major challenge.
Specifically, NASA pointed out that banks’ failure to distinguish between Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) significantly hampers domestic investors. This misunderstanding has led to operational cash shortages for companies in the sector, diminishing their competitiveness.
Currently, there are about 22 operational Special Economic Zones in Ethiopia, developed by both the government and private developers, with nearly 700 enterprise activities underway across the country.
According to the latest IPDC report, domestic investors now account for 58.5% of new firms entering Special Economic Zones.
Following the implementation of the new Special Economic Zone Proclamation (No. 1322/2016), aimed at accelerating economic growth and attracting foreign investment, the Ethiopian government has established strict requirements for developers wishing to operate in this sector.
Under the new directive, investors or organizations must have a minimum investment capital of $75 million to obtain a license as a Special Economic Zone Developer. Additionally, the land area to be developed must not be less than 50 hectares.
These zones serve as hubs for government policy experimentation and play a crucial role in diversifying the country’s economy beyond manufacturing into trade and service sectors.
Ethiopia has launched a major nationwide polio vaccination campaign, aiming to protect more than 17 million children under five. Running from March 27 to 30, the campaign spans 118 zones and cities across 11 regions, including high-risk areas, to prevent outbreaks and move the country closer to eradicating polio.
More than 125,000 personnel—including vaccinators and social mobilizers at national and woreda levels—are engaged in this intensive door-to-door effort.
Rotary International has been a key partner in Ethiopia’s fight against polio, contributing over USD 100 million globally to support eradication efforts. Through advocacy, resource mobilization, and active field engagement, Rotary plays a central role in the Global Polio Eradication Initiative (GPEI), alongside WHO, UNICEF, Gavi, the Gates Foundation, and the CDC.
At the Addis Ababa City Administration level, a focused vaccination effort began on March 27, 2026, targeting more than 830,000 children under five. Dr. Yohannes Chala, Head of the City Administration Health Bureau, noted that 4,850 health professionals have been organized into 967 teams to deliver vaccines efficiently. The campaign aims to reach every child under five, including those who may have missed or discontinued previous immunizations.
Although Ethiopia has been free of poliovirus since 2017, the country remains vigilant against potential importation from neighboring nations. This campaign forms part of a broader global push to achieve a polio-free world by 2027. Thanks to the combined efforts of GPEI partners, the virus has been reduced to just 0.1 percent in affected regions.
This week, a delegation of nine Polio+ Rotarians from France and Belgium joined local Rotarians and health workers to support the campaign in Addis Ababa, Sheger City, Adama, and Hawassa. Organized by PDG Alain Bouvard of the Rotary Club of Bourg-en-Bresse Brou (District 1710) and led by Rotarian Jean Piron, the delegation is working alongside local teams to administer vaccines, raise community awareness, and mobilize international support.
“This visit strengthens international collaboration and highlights Rotary’s ongoing commitment to eradicating polio,” said Rotarian Piron. Similar delegations from the district have previously visited Pakistan and Côte d’Ivoire; this year, their itinerary includes Cameroon and Ethiopia.
According to WHO, repeated high-quality vaccination campaigns have led to a dramatic reduction in poliovirus detections. In recent months, Ethiopia has recorded a sharp decline—from 79 cases in the previous 12 months to just eight in the past year, with the most recent case reported in October 2025. This progress reflects strong national commitment and deserves recognition.
However, poliovirus transmission persists in neighboring countries, including Djibouti, South Sudan, Sudan, Kenya, and Somalia. Given Ethiopia’s porous borders, continued vigilance remains essential—through sustained immunization efforts, strengthened cross-border collaboration, and a highly sensitive surveillance system to detect and respond to any new cases.
With strong government leadership, active community participation, and support from global partners like Rotary, Ethiopia is on track to make polio a disease of the past, safeguarding millions of children across the nation.
