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Top Stories of the Week
Running on Empty: Ethiopia's Fuel Price Spiral and the Households Left to Absorb It
Inside the Room: Binance's Africa Legal Head on Talks with Ethiopia's Central Bank
Ethiopia's Debt Bill Hits $51.8 Billion
Double-Digit Inflation Returns
Fed to Enforce New Law Mandating Fair Bank Lending to Manufacturing Sector
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Shega Launches Policy Monitor to Track Ethiopia’s Fast-Shifting Regulatory Landscape
Shega just published the inaugural edition of Policy Monitor, a new monthly briefing tracking Ethiopia's legislative and regulatory shifts. Policy Monitor cuts through the noise, summarizing what changed, what it means in practice, and what to watch next.
If you invest, operate, advise, or build in Ethiopia, April 2026 was a month worth understanding.
Here's what moved last month:
The NBE overhauled insurance governance across four simultaneous directives: brokers, ownership, audits, and distribution
The Ministry of Finance eliminated income tax for qualifying Free Trade Zone traders, effective immediately
Parliament passed Ethiopia's first new criminal procedure code since 1961, introducing bail reform, plea bargaining, and digital evidence rules
Amhara Region enacted sweeping rural land reforms: extended rights, women's co-ownership, and digital certificates
Agricultural extension services were opened to private actors for the first time.
Running on Empty: Ethiopia's Fuel Price Spiral and the Households Left to Absorb It
The Signal
On May 4, 2026, the Ministry of Trade and Regional Integration raised fuel prices for the second time in a single month, pushing gasoline to 167.50 Birr per liter and white diesel to 180.46 Birr, a 40% increase on diesel alone since December 2025. Kerosene and jet fuel more than doubled within 30 days, a pace of adjustment with few precedents in Ethiopia's recent history. The Ministry attributed the revisions to global oil market volatility following the Strait of Hormuz disruption, tanker traffic through the corridor collapsed by up to 95% after the February 2026 US-Israel strikes on Iran, sending Brent crude above $130 per barrel and inflating maritime insurance premiums beyond anything the country's import economics were designed to absorb. The prices took effect at 6:00 PM and were immediately operative at pumps across Addis Ababa.
Why It Matters
Start with the trajectory, because the May adjustment is not an isolated event. In 2021, a liter of gasoline cost below 50 Birr. By September 2023 it had reached 77.65 Birr; by October 2024, 91 ETB; by January 2025 it crossed the symbolic 100-birr mark for the first time. Retail gasoline now exceeds 167 Birr, a 230% nominal increase over five years. Two forces are compounding each other.
The government has been deliberately phasing out fuel subsidies as part of its Homegrown Economic Reform Agenda, having spent an estimated 100 billion birr annually to cushion domestic prices from global markets, an expenditure it could no longer defend fiscally. Onto that already-rising baseline, the Hormuz shock has landed with full force. Ethiopia, which sources virtually all of its refined petroleum from Gulf producers and routes 90-95% of it through a single chokepoint at the Port of Djibouti, had no structural buffer against a disruption of this scale. The result is a compounding of reform-driven price increases and geopolitical price shocks with no mechanism to separate them, and, critically, no publicly communicated plan for protecting the people who can least afford either.
More Stories
Inside the Room: Binance's Africa Legal Head on Talks with Ethiopia's Central Bank
When Binance announced in late April that it would disable Ethiopian Birr peer-to-peer (P2P) trading on its platform effective May 15, 2026, it marked a consequential step in a months-long squeeze on crypto P2P activity in Ethiopia.
Shega's Kaleab Girma sat down with Larry Cooke, Binance Africa Legal Head, during his visit to Addis Ababa as part of ongoing consultations with Ethiopian regulators.
Larry spoke on a wide range of issues, from what led to the delisting and what Binance told the central bank, to what comes next.
"The parallel market is something that existed before Binance," Larry says, pushing back against the narrative that crypto platforms are destabilizing the Birr.
Furthermore, the discussion alluded to broader questions around IMF recommendations on P2P, currency sovereignty, and regional comparisons. Read more.
Ethiopia's Debt Bill Hits $51.8 Billion
Ethiopia’s domestic debt burden has climbed to $18.3 billion, pushing total public liabilities to $51.8 billion.
Finance Minister Ahmed Shide disclosed the figures while presenting the ministry’s nine-month performance report to the House of People’s Representatives. Read more.
Double-Digit Inflation Returns
Ethiopia’s inflation rate climbed back into double digits in April 2026, highlighting renewed pressure on household budgets as rising food and fuel prices, combined with global supply disruptions, tested the country’s recent progress in stabilizing prices.
Headline inflation rose to 11.7 percent in April, up from 9.4 percent in March, according to the latest inflation data. Food inflation accelerated to 13.5 percent, while non-food inflation increased to 9.1 percent. Read more.
Fed to Enforce New Law Mandating Fair Bank Lending to Manufacturing Sector
Prime Minister Abiy Ahmed (PhD) announced that the government will introduce legislation within weeks compelling both public and private banks to allocate credit more equitably to Ethiopia’s manufacturing sector, following an official assessment that found lending to the industry remains persistently low.
The proposed law responds to a government evaluation concluding that manufacturers are not receiving sufficient financing to expand operations or compete regionally. Read more.
Defendants in 1.9bn Birr Fintech Fraud Scheme Granted Bail
Several defendants accused of involvement in an alleged 1.9 billion Birr fintech investment fraud have been granted bail by the Lideta Division of the Federal High Court, while remaining under a travel ban pending further investigation.
The defendants, who include well-known public figures and social media influencers, stand accused of causing substantial financial harm by allegedly disseminating false information and exploiting public trust through social media platforms and digital communication tools. Read more.
Ethiopia’s Factories Are Stalling, Credit Costs Are to Blame
Ethiopia’s manufacturing ambitions are increasingly threatened by soaring borrowing costs, currency depreciation, and structural financing barriers.
As interest rate deregulation drives lending rates to record highs, many MSMEs are abandoning factory projects altogether.
Yinebeb Bahru examines the growing crisis in capital goods financing and outlines practical reforms needed to restore industrial growth and investor confidence.
"Industrialization is built by machines that are installed, operating, and producing. Currently, those machines are still awaiting affordable credit lines."
Read the full Commentary.
TerraPay, Quantoz, Coop Bank Launch Cross-Border Remittance Solution
The Commercial Bank of Oromia, in partnership with TerraPay and Quantoz, has launched the COOP REMIT application to facilitate euro-denominated remittance flows from Europe. Read more.