Ethiopia’s financial sector is at a watershed moment as the National Bank of Ethiopia (NBE) intensifies its crackdown on the informal remittance market—an unofficial network that for years has funneled billions of dollars outside the formal banking system. This hidden economy has long undermined Ethiopia’s efforts to increase foreign exchange reserves, which are crucial for economic stability and growth.

The NBE has issued strong warnings to the Ethiopian diaspora, particularly those in major hubs such as the United States, urging them to stop using unlicensed money transfer operators. Instead, the diaspora is encouraged to conduct remittance transactions exclusively through legally authorized financial institutions. This directive is part of a broader strategy aimed at consolidating foreign exchange inflows into formal channels, thereby improving transparency and regulatory control.

Efforts to reclaim the remittance market have already gained momentum. Leading banks like the Commercial Bank of Ethiopia (CBE) and Dashen Bank have inked partnerships with international money transfer companies, collaborating with financial hubs across the United Arab Emirates and Saudi Arabia. These agreements aim to offer competitive alternatives to the informal services that have thrived for decades by providing faster, cheaper, and more accessible transactions.

Despite these promising developments, financial experts caution that banks face a significant risk of “losing twice” if these new arrangements fail. Eyasu Theodros, a U.S.-licensed financial advisor, explains that if trusted services are not restored, the cash flow will revert to the informal market, worsening foreign exchange shortages while damaging the reputation of formal financial institutions. “It’s not just about competing on price or speed—it’s about building trust,” Eyasu notes. “The informal market succeeds because it offers customers speedy service, transparent processes, and reliability. Banks must meet these expectations to win back users.”

The challenge, however, extends beyond efficient money transfers to fostering lasting relationships. Remittances are more than just transfers—they represent income for rent, education, healthcare, and daily living expenses. Many recipients use the funds immediately, which limits opportunities for the money to accumulate in savings or investment products within the banking system. Eyasu, a financial strategist, emphasizes the importance of converting single remittance transactions into ongoing engagement with banking services, such as savings accounts, investment opportunities, or credit products. “Without this, money will simply flow out quickly, even if it passes through formal channels,” Eyasu says.

This paradigm shift calls for a fundamental change in the banking mindset, focusing on customer experience and trustworthiness above traditional financial controls. Banks must streamline processes, reduce bureaucracy, maintain transparent exchange rates, and eliminate hidden fees to provide a seamless, secure transaction experience. Such steps could build confidence and gradually foster deeper financial inclusion for the diaspora community.

Recent data from the NBE shows progress: foreign exchange earnings rose 33 percent to $32 billion, with remittances contributing an estimated $7.1 billion. Daily foreign currency sales from banks to businesses have more than doubled to $25 million from $11 million a year ago. However, the informal market’s deep-rooted presence in local communities and abroad remains a formidable challenge that law enforcement alone cannot solve.

The NBE acknowledges the complexity of the issue, recognizing that closing down illegal operators is only part of the solution. Convincing the diaspora that formal channels offer a safer, more beneficial way to send money is equally crucial. Building trust through better services and products will determine the success of Ethiopia’s campaign against informal remittance networks.

In the coming months, the Ethiopian banking sector will be tested on its ability to innovate, adapt, and compete effectively. Their success in attracting remittance flows back into the formal economy will play a pivotal role in strengthening foreign exchange reserves, stabilizing the economy, and supporting sustainable growth. This drive to reclaim the remittance market could mark a vital turning point for Ethiopia’s financial system and economic future.

Miners consume 30% of national electricity production

Ethiopia has become a prominent global hub for the Bitcoin network, with the revenue from the state energy provider’s Bitcoin sector expected to double in the current budget year. This topic was a highlight at the second annual Ethiopia Bitcoin Summit, held on Tuesday, September 17.

In recent years, Ethiopia has garnered significant interest from international cryptocurrency miners, resulting in a number of large companies setting up operations in the country.

Details shared at the summit revealed that nearly 30 mining companies are currently active in the sector, with an equal number seeking licenses to commence operations.

Kal Kassa, founder of BitcoinBirr—a platform focused on cryptocurrency education and awareness—and facilitator of the summit, presented important data.

He noted that Bitcoin miners now consume an estimated 30% of Ethiopia’s total electricity production, which aligns with the country’s potential to harness stranded energy.

Experts at the event highlighted that in 2024, Ethiopia accounted for about 2.5% of the global Bitcoin network’s hashrate, which is the total computational power used for mining. While this figure positions Ethiopia among the top mining nations globally, it remains below 5%. Projections, however, indicate that this could more than double within a year if current trends persist.

Kal shared these insights and referenced an independent study by Luxor, which reported that over 5% of the Bitcoin network is now secured in Ethiopia. He remarked that this rapid growth was unforeseen just two years ago, firmly establishing the country on the global crypto mining map.

Based on his estimations, Kal believes Ethiopia’s share may now lie between 7% and 10%, suggesting that the Luxor figure from a few months ago is likely outdated.

He also noted that mining activity extends beyond dedicated companies, as some of the approximately 60 data centers operating in Ethiopia are also engaged in mining.

The state-owned Ethiopian Electric Power (EEP) reported earning around $220 million last year from supplying electricity to cryptocurrency miners. Moges Mekonnen PR head of EEP told Capital that they are planning to generate revenue of $312.5 Million in the current budget year that will end in June 2026.

Kal estimates that revenue from energy sales to mining companies could reach half a billion dollars in the current budget year.

Although the government has recently stated that cryptocurrency investment is not its top priority, Kal argued that the state energy enterprise should strengthen its collaboration with miners.

He suggested this could involve partnerships in future renewable energy projects to ensure a sustainable and reliable power supply for the mining industry.

“The two parties are likely to extend their cooperation into the energy sector, aiming not just to benefit investors but also to promote the sector’s growth within the country,” he told Capital.

A key factor driving this mining boom is Ethiopia’s significantly lower electricity tariffs, which are crucial since power costs can account for up to 80% of crypto mining expenses. The BitcoinBirr team deemed the annual summit, which focused on sharing information about the sector, a considerable success

After decades marked by fragmented and often conflicting land management policies, Ethiopia stands on the brink of a transformative shift with the preparation of a new national land use policy. The move aims to tackle long-standing problems that have hindered agricultural productivity and led to widespread illegal land use, particularly the unchecked conversion of vital agricultural land for housing and industrial development.

Historically, Ethiopia’s land governance has suffered from a lack of a unified national strategy. Land use decisions are often made independently by various government bodies and regional authorities without overarching coordination. Tigistu Gebremeskel, head of Rural Land Administration and Use at the Ministry of Agriculture, emphasizes that the absence of a common national vision allows each region and institution to develop disparate land use plans, creating inconsistencies and weak oversight.

“The conversion of agricultural land to non-agricultural use has become a major factor in the decline of agricultural productivity. A national land use policy would enable research-based planning to allocate land effectively for agriculture, housing, and industry,” Tigistu explains.

The roots of Ethiopia’s land challenges stretch back to the monarchy era when land was concentrated in the hands of the ruling class and loyalists, fostering an unequal feudal-capitalist system. Attempts at reform during Emperor Haile Selassie’s reign largely failed, exacerbated further by influential landlords and rampant land trading.

“The widespread grievances over land inequality eventually galvanized the ‘Land for the Tiller’ movement that contributed to the monarchy’s collapse in 1974,” notes Kitaw Gashaw, a land policy consultant and researcher. After the revolution, the Derg regime nationalized all land in 1975, transferring ownership to the state and severely restricting farmers’ land use rights by disallowing the sale or lease of land.

While this system was meant to empower rural farmers, it led to rural poverty, food shortages, and ultimately the civil war and downfall of the Derg government in the early 1990s. The post-Derg government retained land ownership with the state but granted use rights to farmers, pastoralists, and investors via the constitution. However, the decentralization of land management responsibilities to regional states through proclamations like No. 456/2005 introduced fragmented legal frameworks and varying land policies across the country.

Urban land management has also evolved but remains problematic. The Urban Land Lease Transfer Proclamation No. 721/2011 initiated a leasing system replacing traditional land ownership classifications. Still, poor implementation has resulted in opaque land allocation, weak monitoring, and illegal settlements proliferating across cities.

The upcoming national land use policy, currently in draft stages under the Ministry of Agriculture’s leadership, aims to clarify distinctions between land policy—the legal and institutional framework—and land use policy, which strategically allocates land for specific purposes. By focusing on evidence-based land use planning, the policy seeks to curb unregulated land grabs and support sustainable agricultural, residential, and industrial development.

This initiative gained momentum at the recent Knowledge Exchange Workshop (KEW 2025), where nearly 60 land management experts from eight African countries convened to share experiences and strategies to promote responsible land governance. The workshop, hosted jointly by the Global Program for Responsible Land Policy (GPRLP) and the Advisory Capacity Building Program on Land Management in Africa (SLGA), focused on collaboration and impact, titled “Making Responsible Land Management Work Together in the Future.”

Participants from Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Ethiopia, Madagascar, Niger, and Uganda engaged in a six-month online learning process culminating in the forum. Their collective insights underscored the importance of aligning national frameworks while addressing local realities to improve land tenure security, equitable access, and sustainable land use.

Experts see Ethiopia’s draft land use policy as a critical step toward resolving historical inequalities, boosting agricultural output, protecting natural resources, and guiding urban expansion responsibly. Tigistu Gebremeskel affirms, “A well-designed land use policy will back data-driven decisions on land allocation, preventing chaotic development and ensuring that land remains a cornerstone of Ethiopia’s economic growth.”

New tuition payment guidelines unveiled by the International Community School (ICS) for the 2025-26 academic year have sparked significant backlash among parents and financial experts. The school’s policy requires all tuition and fees to be paid exclusively in United States dollars (USD) or other hard currencies, a demand that many families argue is impractical and financially burdensome in Ethiopia’s current economic context.

Effective August 1, 2025, ICS’s Tuition and Fees Guide specifies that payments must be made in USD or an equivalent hard currency. The document details payment deadlines, refund policies, and penalties for late payments. These payments can be made via various methods such as cash, personal check, wire transfer, and foreign currency checks. However, the guide also directs that funds be sent to a TD Bank account in the United States, complete with routing and account numbers.

The annual tuition fees range from $11,760 to $36,520 depending on grade level, all payable in US dollars. Such rigid foreign currency demands have triggered frustration among Ethiopian parents. One mother, who requested anonymity, said, “We cannot easily access foreign currency. Being forced to buy dollars from the black market is illegal and extremely costly. The school insists we pay in foreign currencies rather than Ethiopian birr, even though the latter is our country’s official currency. This is simply unfair.”

Parents voiced concerns over the logistical and legal implications of transferring fees abroad for a school located in Ethiopia. “Our children study here, but we are forced to transfer payments to a foreign bank,” another parent said. “Why can’t we pay in birr, the nation’s official currency?”

Financial experts and legal professionals raised alarms regarding the policy’s legality. A financial lawyer explained, “By law, transactions within Ethiopia must be conducted in Ethiopian birr. Requiring payment in foreign currency for a service rendered locally violates the country’s financial regulations.” The expert further highlighted that funneling funds through international bank accounts may conflict with Ethiopia’s foreign exchange control laws and encourage black market currency trading, exacerbating economic instability.

While ICS has not publicly commented on the controversy, the school document confirms that tuition rates and the requirement to pay in US dollars are set by the Board of Trustees.

ICS justifies the dollar-only policy citing operational needs such as foreign workers’ salaries, imported school supplies, and funding international programs. Despite these considerations, the policy places a disproportionate financial burden on local families facing foreign currency scarcity and rising black market rates.

Founded in 1964, ICS is a prestigious international school serving students aged 3 to 18 from over 80 nationalities. The campus is situated on 15 hectares of land originally donated by Emperor Haile Selassie I to support Addis Ababa as a diplomatic hub for Africa and the international community. Today, the school educates students from more than 70 countries and is regarded as a key contributor to education in Ethiopia and beyond.

As the school year approaches, growing parental concerns spotlight the challenges of education financing amid Ethiopia’s complex currency environment. The calls for ICS to allow tuition payments in Ethiopian birr reflect broader frustrations shared by families navigating an increasingly difficult economic landscape. The ICS dispute highlights the tension between international educational institutions operating in Ethiopia and the realities faced by local communities. Moving forward, dialogue between the school administration, parents, financial authorities, and regulators is essential to ensure accessibility and compliance with national guidelines while maintaining the school’s commitment to educational excellence