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Ethiopia has achieved a landmark foreign exchange inflow of USD 32.1 billion in the recently concluded fiscal year—a significant rise from USD 24.7 billion the previous year. This surge reflects the impact of far-reaching macroeconomic reforms aimed at revitalizing the economy and correcting long-standing structural imbalances.
The announcement was made by National Bank of Ethiopia Governor Mamo Mihretu at the Ethiopian Finance Forum in Addis Ababa. He attributed the strong performance to a series of ongoing reforms, including liberalization of the foreign exchange market and enhanced policies to attract foreign investment and capital inflows.
A key reform has been the adoption of a market-based exchange rate regime. This transition is a cornerstone of Ethiopia’s broader economic transformation, designed to improve transparency, reduce arbitrage, and boost export competitiveness.
The record inflows were driven by improved export earnings, increased foreign direct investment (FDI), rising remittances, and higher development financing. Together, these have helped ease Ethiopia’s chronic foreign currency shortages—long a critical vulnerability in the economy.
Governor Mihretu emphasized that the figures represent more than just financial growth. “This performance is a reflection of investor confidence and growing economic resilience,” he said. “It marks a structural shift towards long-term macroeconomic stability.”
Despite the progress, Ethiopia continues to face significant challenges, including inflation, debt sustainability, and balance of payments pressures. Authorities plan to address these through tighter monetary policy, institutional reform, and improved fiscal governance.
The record-breaking foreign exchange performance could also enhance Ethiopia’s engagement with international financial institutions, potentially unlocking additional support and development funding. The IMF and World Bank have consistently highlighted the need for reforms as prerequisites for broader financial assistance and debt relief.
These developments are part of Ethiopia’s wider economic reform programme, which seeks to transition from a state-led model to a more liberal, market-driven economy. This includes efforts in public sector modernization, privatization, and restructuring of the financial system.
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The government is expected to release detailed sector-by-sector data on foreign exchange sources in the forthcoming National Bank of Ethiopia economic bulletin. While the recent figures mark a turning point, continued reform implementation and resilience to economic shocks will be critical to maintaining momentum.
