As artificial intelligence (AI) rapidly transforms global economic and social landscapes, African leaders have issued a stark warning that the continent stands at a critical crossroads: failure to actively invest in AI innovation, leadership development, and infrastructure risks leaving Africa behind in global growth throughout the coming century. The cautionary message was delivered ahead of and during the 11th African Think Tank Summit, scheduled for October 8-10 in Ethiopia’s capital.

Zadig Abraha, CEO of the African Leadership Excellence Academy (AFLEX), emphasized that the competition shaping the future is no longer between developed and developing nations but between humans and machines. “The race is man with machines,” he said. He warned that even global superpowers like the United States cannot guarantee their dominance in the next century without significant investment in AI technologies and capabilities.

Describing a future full of unprecedented change, Abraha envisioned a world where long-standing practices and assumptions give way to emerging and transformative phenomena. He underlined that success will require visionary leadership capable of converting good ideas and policies into concrete outcomes, especially in public finance and governance.

The theme of the upcoming summit, “Bridging the Gap Between Public Finance Policy and Implementation: From Taxation to Action,” reflects Africa’s perennial struggle to translate well-crafted fiscal policies into measurable development gains. Abraha stressed that without farsighted leaders, competent public servants, and strong institutions, the most innovative policies risk remaining mere ambitions on paper.

AFLEX has been highlighted as a leading institution committed to nurturing such transformative leadership across the continent—leaders who can deliver results, manage complexity, and inspire confidence amidst rapid technological and economic change.

Echoing these sentiments, Mamadou Biteyethe, Executive Secretary of the African Capacity Building Foundation (ACBF), reminded participants that the core challenge in fiscal reform lies not in design but execution. “Knowledge without practicality has little effect,” he cautioned, underscoring the need for rigorous policy monitoring and effective translation of reforms into tangible citizen benefits.

To bridge the gap between policy intent and real-world impact, the summit aims to prioritize actionable results over theoretical discussion. Leaders emphasized the urgent need to build a financial ecosystem capable of supporting Africa’s AI-driven future, investing heavily in the continent’s youth and innovation capacity to ensure they are active contributors—not mere observers—to Africa’s development.

Crucially, summit planners envision this event as a platform to jointly shape Africa’s leadership evolution and fiscal transition, turning ambitious goals into real improvements that benefit citizens across the continent.

As AI reshapes labor markets, commerce, healthcare, and governance globally, Africa’s ability to harness the technology will determine its developmental trajectory in the 21st century. Participants underscored that urgent collaboration among governments, the private sector, academia, and civil society is essential to build ethical, inclusive, and sustainable AI ecosystems tailored to Africa’s unique socio-economic realities.

The African Union Commission Deputy Chairperson, Selma Malika Haddadi, has earlier affirmed the continent’s commitment to leveraging AI for inclusive prosperity, stressing investments in renewable-powered data centers, regional compute hubs, and data sovereignty to protect African identities.

Ethiopia’s rapidly growing digital logistics sector, notably led by startups like Moteregna Transport, is facing significant regulatory challenges that threaten to slow its momentum and disrupt a vibrant segment of the economy. Central to the turmoil is the lack of consistent and clear policies governing motorcycle logistics, particularly concerning taxation, licensing, and insurance coverage.

Moteregna CEO and founder Mesfin Getahun emphasized the urgency of the issue, noting that “the sector is changing rapidly, creating an atmosphere of instability.” Without a unified regulatory framework, businesses in the motorcycle delivery space are grappling with unexpected costs and legal uncertainties that could impair growth and innovation.

Rather than retreating, Moteregna has adopted a proactive stance, actively engaging with regulatory bodies to demonstrate how its business model aligns with job creation, tax transparency, and Ethiopia’s broader Green Growth Strategy. “We aim to provide empirical evidence to help develop innovation-driven and law-abiding regulations,” Mesfin explained. The firm collaborates with a range of stakeholders—including other businesses and community organizations—to push for policies that promote sustainable growth, safety standards, and fair competition.

A critical gap in the current ecosystem is the absence of carrier liability insurance, exposing logistics operators and their customers to significant financial risks. To mitigate this, Moteregna has established a risk reserve fund and implemented rigorous safety and cargo handling protocols. The company is also in discussions with insurers to create partial coverage schemes for high-value delivery routes. These financial safeguards, together with clear contractual terms, enable Moteregna to operate securely while working toward comprehensive insurance solutions.

Mesfin further highlighted the importance of integrating technology with security, using digital tracking to monitor risks in real time and respond promptly. This combination of technological innovation and proactive risk management builds trust with clients, reinforcing Moteregna’s reputation for reliability in a sector often perceived as informal.

A key part of Moteregna’s vision is to tackle the informal nature of the logistics industry by building a digital taxation system that records every transaction and ensures transparency. The company plans to train government officials in the use of these digital tools to foster a culture of accountability, setting a new benchmark for the wider sector.

The National Bank of Ethiopia’s (NBE) Monetary Policy Committee (MPC) is scheduled to meet early this week, with high expectations for a significant decision that could impact the economy.

The MPC was established following an amendment to the NBE proclamation at the end of 2023, which mandated its formation. After its inaugural meeting in December 2023 and a subsequent quarterly meeting in June, the committee will convene again at the end of the first quarter of the current fiscal year, which closes on Tuesday, September 30.

This upcoming meeting, the MPC’s fourth, will be chaired by Eyob Tekalegn, the newly appointed NBE Governor, and is anticipated to introduce measures aimed at stimulating the economy.

One key decision expected from this meeting is the removal of the 18 percent cap on bank credit growth, one of the last remaining direct monetary policy instruments. This cap was initially set at 14 percent at the beginning of the 2023/24 budget year as part of a series of direct interventions to address inflation.

The MPC raised the cap to 18 percent during its first meeting in December 2023. In its third meeting, the committee eased controls by repealing a directive that required commercial banks to purchase Treasury bonds equivalent to 20 percent of every loan disbursement.

The private sector, including financial institutions and newly established banks, has consistently voiced concerns that the credit cap has hindered their operations. Consequently, removing it is expected to alleviate some of these constraints.

However, this potential move raises concerns among economic experts and market participants. They caution that lifting the cap could lead to an increase in the money supply, potentially driving inflation higher.

Some members of the business community, particularly those reliant on imports, welcome the prospect of improved access to finance but are apprehensive about a surge in demand for foreign exchange.

“I fear that the demand for foreign currency will spike when banks extend more credit to their customers,” said a businessman with an economics background, adding that such an increase could exert downward pressure on the birr, leading to a higher exchange rate.

Despite these concerns, experts believe the central bank has the tools necessary to address potential challenges. The NBE has indicated its shift from traditional direct controls to conventional, market-based monetary policy instruments to combat inflation.

Recent data from the Ethiopian Statistics Service shows that inflation has slightly decreased to 13.7% as of last month. Meanwhile, the Ministry of Finance projects that inflation will drop to 11.9% by the end of the budget year in June 2026.

In a statement issued on June 30, the MPC reaffirmed its commitment to a disciplined monetary policy utilizing these market-based tools to reduce inflation to single digits while fostering economic recovery. The committee intends to carefully manage the money supply through the banking sector.

Before the third MPC meeting, Fikadu Digafe, Vice Governor and Chief Economist at the NBE, informed Capital that the bank would employ various policy instruments to ensure market stability.

The following statement clarified that although the credit growth cap is expected to be revised by September 2025, any adjustments would not inadvertently loosen monetary policy.

The NBE committed to utilizing its full range of tools, such as the policy rate, Open Market Operations, foreign exchange interventions, and adjustments to reserve requirements.

In a notable change, the NBE introduced its first-ever policy rate in July 2024, set at 15%, to transition to an interest rate-based framework. The central bank indicated that this NBE Reference Rate (NBR) would serve as its primary signaling tool for policy.

Experts predict a potential decline in this rate, pointing out that yields on Treasury bills (T-bills) have recently decreased compared to auctions prior to the start of the current budget year on July 7.

They attribute this decline to the government showing less interest in accepting high-yield offers, a change possibly linked to the suspension of Treasury bond issuances for the current budget year.

Analysts argue that the removal of the mandatory Treasury bond requirement beginning in July has significantly enhanced bank liquidity, a change that is reflected in the recent bi-weekly T-bill auctions.

This improved liquidity was underscored in an extraordinary domestic debt bulletin published by the Ministry of Finance (MoF) a few weeks ago, which reported that investor demand for T-bills surged to 159% of the amount offered.

The Ministry attributes this increase in demand to better primary market conditions following the introduction of a three-month T-bill issuance calendar at the start of the budget year.

According to the MoF’s first domestic debt bulletin, issued in early September, “The issuance calendar provides market participants with improved transparency regarding upcoming auctions, enabling better planning and fostering investor confidence.”

Since its implementation, participation and subscription rates in the market have notably improved across all T-bill tenors. In the first two months of the 2025/26 fiscal year (July and August), the government raised 111.1 billion birr through four T-bill auctions, surpassing its planned issuance of 103.4 billion birr.

In an unusual move, the government chose not to accept the full amount of funds offered by bidders, despite receiving significantly higher bids than anticipated.

The auction results also indicated a decline in yields, which experts suggest implies that potential buyers, primarily banks, are highly liquid. However, the most recent auction, scheduled for mid-last week, did not take place.

The NBE has stated that the NBR will be adjusted according to inflationary pressures and monetary conditions.

Additionally, a few months ago, the bank released a revised draft directive on reserve requirements to align with international standards.

This update introduces mechanisms such as partial reserve averaging and a lagged maintenance period to enhance interbank market efficiency and provide banks with greater flexibility in liquidity management. Under the new rules, banks must maintain a minimum of 5% of their reserve base daily in their NBE settlement account, while also achieving a monthly average reserve requirement of 7% of their deposit liabilities.