The Public Procurement Service (PPS) says Ethiopia’s transition to an electronic procurement system is progressing despite challenges related to price verification and market volatility that continue to affect the public supply chain.

Speaking at a consultation workshop on Thursday, March 5, PPS Director General Asmare Yigezu said the electronic government procurement system—commonly known as e-GP—has not yet met all expectations but is gradually improving transparency and oversight in public spending.

“This system is still in its early stages and needs time to mature,” Asmare said. “However, for the country and for this institution, it remains the most viable tool for ensuring proper management of government expenditure.”

According to the Director General, the recent integration of contract administration into the e-GP platform marks an important step forward. Once fully operational, the system is expected to help monitor procurement activities more closely and reduce irregularities throughout the procurement cycle.

However, participants at the consultation—attended by public institutions and suppliers—identified indicative pricing as a major bottleneck affecting procurement timelines.

Under a new procurement framework introduced during the previous fiscal year, the Ethiopian Statistics Service (ESS) is responsible for providing price analysis data used to verify government procurement costs. The requirement was reinforced by a directive that came into force in May.

Asmare noted that the statistics agency was assigned the responsibility without sufficient preparation to handle the volume of requests from public institutions.

“The directive requires all public bodies to obtain price information from the ESS,” he told Capital. “When the Service attempts to respond to the growing number of requests, delays occur. These delays can postpone procurement processes and eventually lead to price revisions.”

The concern was echoed by workshop participants and PPS officials, including Procurement Lead Executive Worku Gezahegn, who said the expected pricing data from the ESS has not been consistently available.

Under the Federal Public Procurement and Property Administration Proclamation No. 1333/2024, public institutions are required to verify bid prices against official market data. If bids significantly diverge from market prices—or if official data is unavailable—procuring entities may instead rely on manufacturer prices or market surveys approved by the procurement authority.

A related directive, Public Procurement Directive No. 1073/2025, further obliges public institutions to conduct market assessments before launching tenders, with the ESS designated as the primary source of price verification.

Officials say the requirement has created an implementation gap that procurement authorities are now working to address.

“We are collaborating closely with the ESS to resolve these challenges, and the cooperation between our institutions is improving,” Asmare said.

Price volatility in the broader economy has added further pressure to procurement operations. Officials say delays in price verification can discourage suppliers from honoring bids, particularly when input costs rise between tender submission and contract signing.

In cases where official data is unavailable, producers may provide indicative prices, or procurement timelines may be extended with authorization from the relevant authority. Procurement experts, however, warn that such measures are difficult to sustain in rapidly changing markets.

Despite these challenges, officials reported notable progress in public asset disposal, another responsibility under the PPS mandate.

According to Worku, revenue generated from the sale of obsolete public assets—including vehicles and scrap materials—has increased sharply in recent years. Over the past five years, including the current fiscal year ending July 7, 2026, disposal revenue has risen by 528 percent, reaching 400 million birr.

In the first six months of the 2025/26 fiscal year alone, the government generated 208 million birr from disposal activities, primarily through auctions of old vehicles and scrap metal.

“This represents a 153 percent increase compared to the same period last fiscal year,” Worku said.

The e-GP platform, introduced about three years ago under the supervision of the Public Procurement and Property Authority, now covers all federal budgetary institutions. Several regional states, including Oromia Region and Amhara Region, have also voluntarily joined the system as part of efforts to modernize public procurement processes.

Governments in the Horn of Africa are stepping up regional cooperation to address the growing impact of climate change, with Ethiopia, Djibouti, and Somalia committing to a new cross-border initiative aimed at strengthening food systems and protecting livelihoods.

The pledge was announced during the second Food Systems Resilience Program (FSRP) summit held in Addis Ababa, where ministers and development partners emphasized the need for coordinated regional action as climate shocks increasingly affect agriculture and pastoral livelihoods across the region.

Moving away from fragmented national responses, the countries are proposing the creation of an integrated “Resilience Corridor” that would link climate adaptation strategies across borders and support the livelihoods of more than 150 million people.

The summit, held under the theme “Scaling Climate-Smart Agriculture in Eastern and Southern Africa,” was organized by the Intergovernmental Authority on Development (IGAD) and the Centre for Coordination of Agricultural Research and Development for Southern Africa (CCARDESA) with support from the World Bank.

Participants stressed that because climate change transcends national boundaries, adaptation strategies must also be regional in scope.

At the center of the new commitment is the “Addis Ababa Reaffirmation,” a framework built on four strategic pillars aimed at strengthening regional resilience.

These include expanding shared climate data and early warning systems through digital platforms; developing harmonized pastoral policies and climate-smart mobility corridors for livestock; distributing drought-resistant seed varieties while protecting soil health; and aligning national agricultural investment plans with the Comprehensive Africa Agriculture Development Programme (CAADP) targets for 2025.

Daher Elmi, representing IGAD at the summit, warned that climate change poses a direct threat to agricultural productivity and livelihoods across the region.

“A coordinated regional response is both a practical necessity and a responsibility to future generations,” he said.

Speakers also highlighted national efforts underway. Kefelegn Getahun, climate change and land use coordinator at the Agricultural Transformation Institute (ATI), noted that Ethiopia is currently undertaking large-scale land restoration programs aimed at rehabilitating millions of hectares of degraded land.

He emphasized that climate adaptation investments must increasingly rely on data-driven planning to help shift the region from vulnerability toward sustainable growth.

According to Mohamed Abdi Ware, Deputy Executive Secretary of IGAD, strengthening food systems is also essential for regional stability.

“Scarcity of water and grazing land often contributes to conflict,” he said. “Ensuring reliable resources for farmers and pastoralists can help reduce the economic pressures that fuel instability.”

Despite the renewed commitments, participants acknowledged that financing remains a major challenge for climate adaptation initiatives.

Experts at the summit noted that while many countries have adopted climate-smart agriculture strategies, long-term funding for implementation remains uncertain. A study presented during the discussions found that although 87 percent of regions in Kenya have developed climate plans, fewer than half have allocated budgets to implement them.

Cliff Sibusiso Dlamini, Executive Director of CCARDESA, said the transition to climate-resilient agriculture will require more predictable financing.

“To transform agricultural production systems, we need a reliable financial horizon that goes beyond short-term aid,” he said.

In response, the World Bank introduced a new financing initiative known as AgriConnect, designed to mobilize up to USD 5 billion annually through 2030. The model aims to attract private sector investment by reducing risks for banks financing agricultural development and solar-powered irrigation projects.

Regional and continental institutions are also promoting a strategy described as “Scaling Up, Out, and Deep,” which focuses on strengthening policies, expanding access to climate-smart technologies, and encouraging behavioral change among farming communities.

Further financial commitments for the Horn of Africa are expected to be discussed at the African Food Systems Transformation Summit 2026, scheduled to take place in Accra, Ghana, in May. Organizers say the meeting will focus on translating donor pledges into concrete investment for climate resilience and agricultural transformation across the continent.

The Ethio Telecom has signed a major network expansion and modernization agreement with its long-time technology partner Ericsson, a move expected to significantly expand mobile connectivity and digital services across Ethiopia.

The agreement was signed on the sidelines of the Mobile World Congress 2026 in Barcelona, and forms part of Ethio Telecom’s broader efforts to strengthen infrastructure and support the country’s digital transformation.

According to the companies, the partnership will focus on upgrading existing mobile infrastructure and expanding network capacity to improve service quality and extend coverage, particularly in underserved areas.

The project is a key component of Ethio Telecom’s three-year “Next Horizon” strategy, which aims to reposition the state-owned operator as a modern digital services provider.

Under the agreement, Ericsson will modernize 1,500 mobile network sites within the areas it manages. The upgrade is expected to increase 4G capacity while also expanding access to 5G services, particularly in urban centers.

In the Ericsson-managed network zone, the modernization will create capacity for 2.8 million additional 4G users, raising total capacity in the area to around 4.1 million subscribers.

The project is also expected to significantly improve network reach. Officials say population coverage in the targeted region will increase by 45 percent, bringing overall accessibility to about 85 percent.

As part of the expansion, LTE services will be extended to 157 additional towns, raising the total number of towns connected through the upgraded network to 276.

While the rollout of 5G technology in major cities has attracted considerable attention, both companies say the agreement places strong emphasis on expanding connectivity in rural areas.

The initiative includes tailored mobile solutions for 75 rural localities, where network coverage and digital services have historically been limited.

Officials say improving connectivity in these areas is expected to support digital inclusion and enable broader access to mobile financial services, online education, and other digital platforms as Ethiopia works to accelerate its transition toward a digital economy.

Horizon Addis Tyre Manufacturing (HATM), Ethiopia’s pioneer and sole tyre manufacturer and a key player in East Africa’s industrial landscape, has announced that its survival is under grave threat due to surging illegal tyre trade and the absence of mandatory quality standards.

Established in 1972 and currently under the MIDROC Investment Group, Horizon Addis has grown from producing four types of tyres to over 54 varieties, including specialized tyres for agriculture, industry, and military vehicles.

However, company leaders argue that these industrial achievements require urgent protection from an unregulated “shadow market” operating across Ethiopia’s borders and within its cities without accountability.

The company, which boasts over half a century of history, stated that it currently faces a high existential risk due to widespread contraband trade, the lack of mandatory national quality standards, and sophisticated tax evasion methods.

Elias Gebremichael, the Marketing Section Head at HATM, told Capital that while the factory has the capacity to cover 35% to 40% of the domestic market, its actual share in the formal market is being significantly eroded by illegal traders.

He emphasized that the survival of this massive institution now depends on the speed and effectiveness of government intervention. The manufacturer identified the primary obstacle as the lack of a mandatory national standard for tyres entering Ethiopia.

To date, the Ethiopian Conformity Assessment Enterprise has not implemented strict standards to prevent low-quality products from entering the market.

“Because there is no mandatory standard, the market is open to anyone,” Elias stated. “Whether the tyres enter legally or via contraband across borders, they are sold openly. The lack of criteria has allowed low-quality and often dangerous products to be viewed as equal to high-quality, locally produced tyres.”

The manufacturer also pointed out another widespread deception among importers: “Ply Rating” (PR) fraud. In the tyre industry, the ply rating determines the load-bearing capacity of the tyre.

“We have a ‘Capacity Analysis’ method where we cut and examine the internal components of the tyre,” Elias said. “We often find tyres labeled ’16 Ply’ for heavy trucks that don’t even meet an ‘8 Ply’ count when inspected.

“They look the same to the consumer, but they explode under pressure. This isn’t just unfair competition; it’s a public safety concern.”

Beyond quality issues, the factory is struggling against an illegal practice known locally as “yetregate Goma” (tyres fitted on vehicles). These are tyres brought into the country fitted to a vehicle to evade import taxes.

According to Elias, while the government does not charge duty on tyres fitted on imported vehicles, the scale of this activity suggests it is being used as a strategic contraband method to bring in new or slightly used tyres in bulk.

While Horizon Addis covers high manufacturing costs—including salaries for over 800 employees and tax obligations—contrabandists operate out of hidden warehouses with minimal overhead, he protested.

“It is estimated that the monthly tyre trade in Ethiopia exceeds 3 billion Birr,” Elias told Capital. Contrabandists focus on high-demand “work vehicle” tyres—specifically for Isuzu trucks, minibuses, and ‘Abadula’ (LGR) vans. Because these vehicles travel long distances, their tyres wear out quickly, making them the primary source of revenue for the sector.  By controlling this segment illegally, smugglers are negatively impacting the local factory’s main revenue stream.

Regional traders often refuse to buy from the factory because Horizon Addis issues legal invoices, which leaves a paper trail for tax authorities.  Instead, these traders prefer to buy from illegal wholesalers in suburban warehouses who sell without documentation.

“When we compare our prices to the market, we can’t even factor VAT into the competition because our competitors simply don’t pay the tax,” Elias said.

“We aren’t just talking about money; we are talking about our survival,” the marketing head emphasized. With over 800 employees working 24 hours a day across three shifts, the factory is the livelihood for thousands of families.

Although the Ministry of Industry and other relevant bodies are providing support, the pace of the solution does not match the scale of the problem.

The Horizon Addis Tyre Factory was inaugurated in 1972 by Emperor Haile Selassie and later operated as a joint venture with Slovakia’s MATADOR. Since 2013, it has been fully under Horizon Plantation (MIDROC) and has significantly modernized its production.

The company data indicates that the factory is a peerless institution in the sector, producing tyres suited for Ethiopia’s landscape, providing warranty services, and offering technical training.

However, the organization reiterated that unless decision-makers take immediate action regarding standard controls and anti-contraband measures, the future of the domestic tyre industry remains precarious.