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The National Bank of Ethiopia (NBE) has issued a new directive requiring all commercial banks to identify and report businesses and individual traders who are conducting commercial transactions through personal or third-party bank accounts instead of officially registered business accounts.
In a statement released on Friday, the central bank revealed that a recent assessment uncovered widespread misuse of personal accounts by business entities and traders. According to the NBE, this practice appears to be a deliberate attempt to bypass tax obligations and, in some cases, may facilitate illegal financial activities such as money laundering and fraud.
The central bank emphasized that this coordinated action is critical to maintaining the stability and integrity of Ethiopia’s financial system, ensuring fair taxation, and curbing illicit money flows. It stated, “This coordinated action is essential to protect the soundness of our financial system and the broader economy.”
Under the new directive, commercial banks must now gather comprehensive data on all customers engaged in such activities and submit detailed reports to the NBE. This data will help the regulator strengthen its oversight and enforcement capabilities across the banking sector.
The move is part of the NBE’s broader strategy to enhance financial transparency, reinforce compliance with anti–money laundering (AML) regulations, and close loopholes that enable tax evasion.
Ethiopia’s tax performance remains below the regional average, with a tax-to-GDP ratio of about 8% in 2025—considerably lower than the sub-Saharan African average of 12–15%. Despite this, domestic tax revenues have shown significant growth, reaching 165.4 billion Birr in the first quarter of the 2024/25 fiscal year, marking a 65% increase compared to the same period last year.
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The NBE’s latest directive underscores its commitment to strengthening financial discipline and promoting transparency within the Ethiopian banking system, as part of a continued effort to safeguard economic stability and ensure equitable revenue collection.
