Atse Bakafa, a hotel in Gondar city of the Amhara region; TPLF, the leading party in the ruling coalition EPRDF; Selam, a bus line established by the Tigray Development Association.

Ethiopia is one of the last "frontier markets" with a population of over 120 million people making it a rare market opportunity for strategic investors with long term plans.

Ethiopia has of late taken measures that liberalize the financial sector. The issuance of the new Banking Business Proclamation No. 1360/2025 (Banking Business Proclamation) and Capital Markets Proclamation No. 1248/2021 (Capital Market Proclamation) are salient examples.

The banking business sector in Ethiopia was exclusively reserved for domestic investors for a half century. The sector began to be opened to foreign investors since 2023.

Ethiopia's National Bank has transferred Letter of Credit approval authority from central oversight to commercial banks while introducing annualised, pro-rata fee structures aligned with international standards. The regulatory shift affects foreign currency account holders and retention account holders engaged in cross-border trade finance, removing prior NBE approval requirements for eligible LC and Cash Against Documents transactions.

On February 12, 2026, the National Bank of Ethiopia issued the Foreign Exchange Amendment Directive No. FXD/04/2026 revising provisions of the Foreign Exchange Directive No. FXD/01/2024.

In this edition, we present a concise overview of key legislative developments from May and June 2025 that may be of relevance or may have an impact on your business

On 27 February 2026, the National Bank of Ethiopia (NBE) issued a public notice declaring that Birr-paired peer-to-peer (P2P) arrangements on trading platforms are not permitted unless explicitly authorized by NBE, and that any Birr-denominated P2P trading or exchange involving cryptocurrencies is prohibited.

Ethiopia’s “homegrown” reform agenda has recently moved from policy statements to legally operative market institutions. The post-2020 investment regime (Investment Proclamation No. 1180/2020 and implementing regulations) is now paired with a functioning capital market architecture (Capital Market Proclamation No. 1248/2021, implementing directives, and the Ethiopian Securities Exchange (ESX)).

Reasons ranging from macro-economic conditions to poor management may result in placing a business in financial distress.

Yes. For the first time in over 50 years, Ethiopia has opened its banking sector to foreign institutions. On December 17, 2024, the Ethiopian Parliament approved Proclamation No. 1360/2024...

The commercial relationship between the United Arab Emirates and Ethiopia has deepened considerably over the past decade, driven by geographic proximity, complementary economic profiles, and a growing web of bilateral agreements that provide the legal infrastructure for sustained investment flows. For UAE-based investors — whether Emirati nationals, family offices, sovereign-adjacent funds, or the substantial community of international entrepreneurs who operate through UAE corporate structures —

Ethiopia has enacted the Banking Business Proclamation No. 1360/2025 and Directive No. SBB/95/2025, opening its banking sector to foreign investors for the first time in over 50 years.

Ethiopia's banking sector stands at a historic inflection point. The enactment of the Banking Business Proclamation No. 1360/2024 — together with a series of implementing directives from the National Bank of Ethiopia (NBE), most notably Directive SBB/94/2025 — has fundamentally reshaped the legal architecture governing banking in Ethiopia.

On 12 February 2026, the National Bank of Ethiopia (NBE) issued Directive No. FXD/04/2026, amending the foundational Foreign Exchange Directive No. FXD/01/2024. The new directive, signed by NBE Governor Eyob Tekalign (PhD), represents the most significant liberalization of Ethiopia's foreign exchange regime since the landmark July 2024 reforms.

Secured Lending Comparative Guide for the jurisdiction of Ethiopia, check out our comparative guides section to compare across multiple countries

Project Finance Comparative Guide for the jurisdiction of Ethiopia, check out our comparative guides section to compare across multiple countries