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The Commercial Bank of Ethiopia (CBE) has reaffirmed its position at the forefront of the financial industry, bolstered by new capital and a strong balance sheet following the resolution of state-owned enterprise (SOE) obligations. This revitalization at the micro level is reflected in macroeconomic success: the fiscal year 2024/25 has concluded with a notable improvement in the country’s current account balance, highlighting a period of significant economic stabilization.

The recently released third edition of the Financial Stability Report reveals that CBE’s systemic importance gained considerable traction during the fiscal year ending June 30, 2025. The report, which offers a thorough assessment of the Ethiopian financial sector’s health, credits this growth to the implementation of bold macroeconomic reforms during the period.

According to the report, Ethiopia’s only systemically important bank (SIB) increased its market share, reversing a declining trend observed in previous years. CBE successfully passed all three stress tests conducted as of June 2025, which evaluated its resilience to credit, liquidity, and foreign exchange risks. As a result, despite existing market concentrations, the systemic risk posed by this SIB is now deemed low.

The report outlines that CBE is undergoing extensive institutional reforms, including a comprehensive overhaul of its lending policies to government enterprises, workforce capacity building, and the enhancement of its institutional frameworks. Additionally, the bank is strengthening its capital buffers through a government capital injection and concessional financing from the World Bank. “In doing so, the bank will continue to play a major role in sustainably supporting Ethiopia’s economic development,” the report states.

In the fiscal year ending June 30, 2025, CBE’s market share across key balance sheet indicators rebounded significantly compared to the previous year. Its share of total banking sector assets rose from 47.9% to 49.1%. More notably, its share of loans and bonds increased sharply from 45.2% to 51.7%, and its share of deposits grew from 47.1% to 48.1%. The bank’s capital market share surged from 24.2% to 43.1%.

“These figures illustrate the bank’s increasing market share and reaffirm its status as the only systemically important bank in Ethiopia’s financial system, thanks to comprehensive reform activities,” the report noted, while cautioning that “this situation heightens concentration risk within the financial system.”

The report also points to a significant improvement in the current account balance, with the deficit narrowing from 3% of GDP in June 2024 to just 0.2% in June 2025. This improvement is seen as evidence of the economy’s positive adjustment to the liberalization of the exchange rate. In absolute terms, the current account deficit shrank dramatically from $6.2 billion in June 2024 to $289.3 million in June 2025, signaling a systemic improvement in the balance of payments.

Foreign currency reserves experienced a significant increase. The National Bank of Ethiopia’s (NBE) reserves rose by over 209% year-on-year, while commercial banks’ foreign currency holdings reached $2.8 billion. “This strengthened reserve position has allowed banks to reduce net foreign exchange obligations and allocate more foreign currency to businesses,” the report stated.

As of June 2025, the total assets of the financial sector, including social security institutions, reached 5.6 trillion birr, representing a 40% increase from 4 trillion birr the previous year. This growth elevated the sector’s share of GDP to 37.2%, up from 34.6% in June 2024.

In terms of credit allocation, the trade sector (both domestic and international) maintained the largest share of aggregate bank loans, accounting for 41.5% of total outstanding loans at the end of June 2025, compared to 39.7% a year earlier. In contrast, the manufacturing sector’s share of outstanding loans fell from 23% to 16.2% during the same period. The report attributes this decline in part to the Commercial Bank of Ethiopia’s (CBE) balance sheet restructuring, which involved converting a portion of its manufacturing loan portfolio into bonds. This restructuring is part of a broader effort supported by a ten-year, approximately 900 billion birr government capital injection and a $700 million World Bank loan, aimed at addressing non-performing loans of state-owned enterprises and mitigating exchange rate shocks.

At the end of the review period, the 31 commercial banks were classified based on total asset size as follows: one large bank (CBE), five medium-sized banks, and 25 small-sized banks.

South African Trade Mission Focuses on ICT and Agro-Processing Sectors in Ethiopia

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March 22, 2026

South African Trade Mission Focuses on ICT and Agro-Processing Sectors in Ethiopia

A new chapter of economic diplomacy has reportedly begun, aiming to tap into the potential of two of the largest economies in East and Southern Africa. Officials from Ethiopia and South Africa stated that the two nations are transitioning from their historical political cooperation toward a robust and comprehensive strategic partnership.

Yasmin Wohabrebbi, State Minister for Trade and Regional Integration, noted that the focus of this relationship extends beyond mutual respect to “accelerating Africa’s economic transformation.” It was highlighted that the foundation for major trade expansion has already been laid, as South Africa is currently Ethiopia’s 5th largest export destination and 4th largest source of imports within the continent.

These remarks were made during a Business-to-Business (B2B) networking forum held in Addis Ababa. The event was organized by the Embassy of the Republic of South Africa in collaboration with the Department of Trade, Industry, and Competition (DTIC) to strengthen trade and investment ties between the two countries.

Led by the DTIC, the South African trade delegation focused on Information and Communication Technology (ICT), agro-processing, and metals fabrication. It was noted that these sectors will significantly bolster African trade integration. While trade between the two nations averaged $154 million between 2020 and 2025, recent data indicates a major shift. In the 2024-2025 fiscal year, Ethiopia doubled its performance from the previous year, generating $3.8 billion in total export revenue.

“In the first seven months of the current fiscal year, we have reached $5.9 billion,” Yasmin stated, adding that the country is on the right track to achieve its annual goal of $9 billion. This growth is attributed to the “Homegrown Economic Reform Program,” which focuses on streamlining customs procedures, reducing trade barriers, and improving logistics corridors.

The South African delegation expressed a strong interest in participating in Ethiopia’s rapidly growing digital and agricultural sectors. In the ICT sector, South African innovators aim to create platforms for connectivity and capacity building, with a specific interest in collaborative work using Artificial Intelligence (AI) to solve continental challenges.

In the agro-processing sector, both countries share a goal of transforming the agricultural value chain to ensure food security and create job opportunities. While Ethiopia is well-known in the South African market for its specialty coffee, it is now diversifying its exports to include products such as kidney beans, floral products, strawberries, and oilseeds.

In return, South Africa continues to supply essential goods to the Ethiopian economy, including machinery, electrical equipment, and base metals. This partnership is anchored within the framework of the African Continental Free Trade Area (AfCFTA). South Africa began trading under the AfCFTA in January 2024, and Ethiopia has completed its domestic process for publishing its specific tariff offers according to the agreement.

Additionally, Ethiopia’s massive infrastructure developments were a major topic at the forum. It was noted that in January 2026, Ethiopia officially began construction on what will be the largest airport in Africa within the next five years. This project is expected to create significant opportunities for South African companies in logistics, hospitality, and the aviation sector.

Ethiopia, Russia Move to Strengthen Agricultural Cooperation and Coffee Trade

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March 22, 2026

Ethiopia, Russia Move to Strengthen Agricultural Cooperation and Coffee Trade

Ethiopia and Russia are stepping up efforts to deepen cooperation in agriculture, with a focus on boosting trade in coffee and improving access to key agricultural inputs.

Ethiopia’s Minister of Agriculture, Addisu Arega, held talks with a Russian delegation led by Maxim Markovich, Deputy Minister of Agriculture of the Russian Federation.

Following the meeting, the minister described the discussions as “productive and forward-looking,” emphasizing the shared commitment to strengthening strategic ties in the agricultural sector.

According to the minister, the talks focused on priority areas such as agricultural input supply, trade in coffee, oil crops, and horticulture, as well as agricultural mechanization, agrochemicals, and the transfer of knowledge and technology.

Ethiopia and Russia maintain a longstanding bilateral relationship, which both sides now aim to elevate through expanded collaboration in agriculture.

Gambella Gold Production up 35 Percent

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March 21, 2026

The Gambella Region of Ethiopia announced that in the past seven months the region has produced more than 4,488 kilograms of refined gold (up 35 percent from last year same period) and submitted to the National Bank of Ethiopia.
The production is which is 988 kilograms higher than the plan, according to Gambella Regional Mineral Resources Development Deputy Director General Mr. Elias Gedamu stated that the amount of gold production submitted to the National Bank is more than 1,175 kilograms higher compared to the same period of the previous year, according to the state media Ena report.

Elias Gedamu mentioned the result was achieved due to the government’s focus on the sector and the implementation of regulation, monitoring, and support activities. The gold production submitted to the National Bank was produced in the Dima, Abobo, Gambella, and Mengesh woredas of the region through traditional methods, special small scale, and large-scale gold companies.

Elias Gedamu confirmed that work is being done with focus to further strengthen the activities started in the region and submit more than the planned 6,000 kilograms of gold to the National Bank in the budget year.

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