January 4, 2025
Ethiopia’s central bank has increased the annual credit growth ceiling for commercial banks to 18% from 14%, signalling a cautious easing of monetary controls amid cooling inflation.
The National Bank of Ethiopia (NBE) will maintain its broader tight monetary policy framework despite the adjustment, the regulator said in a statement on Tuesday.
While inflationary pressures have shown signs of moderating, prudent monetary management remains essential, the NBE said, explaining its decision to keep credit growth restrictions in place, albeit at a higher threshold.
The move, approved by the bank’s Monetary Policy Committee (MPC) during its inaugural meeting on December 31, reflects optimism over Ethiopia’s improving inflation outlook.
Year-on-year inflation dropped to 16.9 percent in November, its lowest level in five years, as tighter monetary policy and improved supply chains took effect.
Despite the easing of credit restrictions, the MPC maintained the central bank’s policy rate at 15 percent to curb inflationary pressures and anchor exchange rate expectations. Other monetary tools, including reserve requirements and standing facility rates, remain unchanged.
“While recent inflation out-turns have been encouraging and show a generally disinflationary direction, it nonetheless remains important to maintain a prudent monetary stance” the MPC said in a statement, adding that the central bank aims to achieve single-digit inflation over the medium term
The government estimated that Ethiopia’s economy grew by 8.1 percent in the 2023-24 fiscal year, with strong momentum carried into the current period. A bumper harvest, rising industrial output, and record-high foreign exchange reserves—boosted by a July 2024 exchange rate reform—are supporting growth, according to the NBE.
However, liquidity constraints persist in the banking sector, with high loan-to-deposit ratios and limited excess reserves.
The Committee “recognized the disinflationary trend in the latest monthly inflation data (-0.8 percent for November 2024), the unusually tight liquidity and credit conditions prevailing in the banking system, and the sharp real decline in monetary aggregates relative to nominal GDP.”
The MPC’s next meeting is scheduled for March 25, 2025, with future policy adjustments depending on inflation and broader economic trends.
(BirrMetrics)
Electoral board says TPLF shows ‘no indication’ of planning mandatory assembly as deadline nears
The National Electoral Board of Ethiopia (NEBE) has stated that the Tigray People’s Liberation Front (TPLF) has “shown no indication” of preparing for its mandatory general assembly, despite multiple communications and an impending deadline of February 10, 2025.
In a letter dated December 31, 2024, NEBE reminded the TPLF that it had been registered under “special circumstances” on August 9, 2024, in accordance with Proclamation No. 1332/2016.
NEBE clarified that the law requires parties registered under such conditions to hold their general assembly within six months. The Board noted that it had informed the TPLF of this obligation on August 9, August 26, and October 31, 2024, and reiterated that the assembly must be held “in the presence of Board observers.”
Furthermore, NEBE emphasized that the party is required to notify the Board of the assembly date at least 21 days in advance, as outlined in Directive No. 25/2016. However, it stated, “there has been no indication that the party is taking steps to meet this obligation.”
With less than two months remaining, NEBE urged the TPLF to “focus on this matter” and ensure compliance within the remaining time. The Board also warned of legal consequences, adding, “Failure to fulfill this obligation will result in measures being taken in accordance with the law.”
NEBE previously rejected the TPLF’s request to reinstate its pre-war legal status, instead granting it a certificate of legal personality as a new political party under special conditions. Additionally, it outlined key requirements for the TPLF’s general assembly, including a 21-day pre-notification and the presence of Board observers at the event.
Despite these instructions, the TPLF held its party congress in August 2024, ignoring NEBE’s warning against holding the assembly without its approches.
(AS)
Israeli medical team restores sight to hundreds in Ethiopian humanitarian mission
An Israeli medical team treated nearly 1,000 patients and restored sight to hundreds during a humanitarian mission to Ethiopia’s underserved communities.
Operation Ethiopia, an Israeli humanitarian medical delegation, concluded their latest mission to provide critical eye care services to communities in Ethiopia, the delegation announced on Sunday.
The 15-member team, led by Prof. Morris E. Hartstein, treated nearly 1,000 patients across the country.
The team treated patients in Addis Ababa and the Seba Kare internally displaced persons camp in Mekelle, Tigray.
Along with providing crucial medical care, Operation Ethiopia trained dozens of teenagers aged 15-18 in basic first aid.
Additionally, the team worked to restore the eyesight of over 500 blind people through an extensive Cataract Campaign, distributed 18 canes to the Mekelle School for the Blind, and provided hundreds of pairs of glasses to patients.
“I feel incredibly fortunate to have been part of this remarkable humanitarian effort,” said mission member Adv. Jeremy Lustman, head of the DLA Piper Israel Group.
“Witnessing the direct impact of Operation Ethiopia – how a dedicated team can restore sight, hope, and dignity to hundreds of people in just a few days – is truly transformative. It’s a powerful reminder of how professional collaboration can make a profound difference in people’s lives.”
(Jerusalem Post)
Turkey-Brokered Deal Spurs Thaw in Somalia, Ethiopia Relations
Somalia is considering reversing a decision to exclude Ethiopian troops from a multinational force battling Islamist insurgents, another sign that diplomatic tensions between the two countries are easing.
Ethiopian Defense Minister Aisha Mohammed Mussa traveled to the Somali capital, Mogadishu, for talks on Thursday about her country’s participation in the mission, Somali Minister of State for Foreign Affairs Ali Balcad said by phone.
Ethiopia has been one of the main contributors to the United Nations-backed force that’s been fighting al-Qaeda-linked militants in neighboring Somalia for almost two decades. Mogadishu objected to Addis Ababa’s future participation in the mission after a yearlong dispute over Ethiopia’s offer to recognize Somaliland — a breakaway territory in northern Somalia — in return for access to a port in the semi-autonomous region.
Last month, Ethiopia and Somalia agreed to resolve their differences after talks brokered by Turkey in Ankara. That accord opens the way for Ethiopia’s inclusion in the so-called African Union Support and Stabilization Mission, Balcad said.
“Given that the contentious issues between Somalia and Ethiopia have been resolved through the Ankara Declaration, Somalia is ready to reconsider the inclusion of the Ethiopian National Defense Force in the upcoming AUSSOM mission,” he said.
Diplomats had warned that Ethiopia’s exclusion from the force risked escalating into conflict between the two nations — Addis Ababa has been a target of attacks by al-Shabaab militants and has sought to extend its longstanding participation in the mission.
The UN Security Council agreed on Dec. 27 to renew the peacekeeping force’s mandate in Somalia, though it failed to come up with “sustainable financing mechanisms” to fund the operation, according to a January report by Balqiis Insights, a Mogadishu-based thinktank.
(Bloomberg)
Burundi withdraws from new AU Mission in Somalia
Burundi has announced its decision to withdraw its National Defense Forces from the upcoming African Union Support and Stabilization Mission in Somalia (AUSSOM).
The move comes after a disagreement with Somalia over the allocation of troop numbers for the Burundi National Defense Forces (BNDF) and is a blow to regional peacekeeping efforts as the mission prepares to commence operations in 2025.
According to a statement from the Burundi Embassy in Addis Ababa, the disagreement centres on the number of troops Burundi would contribute to AUSSOM. Burundi had been seeking a larger allocation, but Somalia offered only 1,041 troops, which Burundi deemed inadequate and disrespectful as it wanted to deploy at least 2,000.
‘Following the lack of consensus between Burundi and Somalia on the allocation of numbers to the Burundi National Defense Forces, for the upcoming African Union Support and stabilization, Burundi’s Permanent Representative to the African Union HE Ambassador Willy Nyamitwe, held a phone call with his counterpart of Djibouti and Chair of the AU Peace and Security Council HE Ambassador Mahamoud Eybe, to convey Burundi’s unfortunate non-participation in AUSSOM”, reads the statement.
Despite efforts to resolve the issue, the two countries failed to reach an agreement. As a result, Burundi has decided to withdraw its troops from AUSSOM, which is set to replace the African Union Mission in Somalia (AMISOM) in January.
The African Union and the AU Peace and Security Council are expected to address the issue and ensure that AUSSOM remains operational and effective.
In a letter to the Minister of National Defense and War Veterans of Burundi, the Minister of Defense of the Federal Government of Somalia Abdulkadir Mohamed Nur expressed appreciation for Burundi’s contributions to Somalia’s peace and security and regret over the lack of consensus.
Nur also requested a technical team to be dispatched in order to commence the discussion of BNDF smooth and orderly exit from the mission and agree on timelines of handover of BNDF positions within ATMIS to the Somali National Armed Forces.
However, top security experts say that having more troops is advantageous but compromising on a troop-contributing country’s terms can jeopardize the security of its personnel.
Sources also said that the decision for Burundi to withdraw was because of pressure from the people back home for losing thousands of soldiers to Al-Shabab.
Security analyst Fred Egesa said that the withdrawal of Burundi from Somalia is double-faced. He said Burundi was the second largest force which has stayed there fighting many complex wars, trained the Somali forces and overall mastered the fight against the rebels and therefore their exit will have some vacuum left.
“The Somalia forces need space to exercise what they have learned if they are to be considered a professional force and this is the time for the Somalia forces to systematically take their space”, said Egesa.
Egesa further said that the withdrawal may stretch the Somalia Forces and other complementary forces but that can be managed for Somalia must be allowed to systematically stand on their own. He believes that the Uganda Peoples Defense Forces-UPDF which is among the contributing forces can handle challenges.
Reports highlight Burundi’s resistance to deploying troops to the contested Gedo region, an area marked by tensions between Somalia and Ethiopia.
Burundi’s withdrawal comes amid Somalia’s plans to exclude Ethiopian forces from AUSSOM, a move driven by territorial, political and insurgency concerns and fears of Ethiopia re-framing Somalia’s security.