Outgoing Central Bank Chief Responds to Investor Concerns Amid Record Forex Gains
BaseLine Team
19 Sep, 2025
Outgoing National Bank of Ethiopia (NBE) Governor Mamo Mihretu used his final appearance before the European Chamber in Ethiopia (EuroCham), as members cited 11 fresh concerns during a technical meeting a fortnight ago.
Investors talked about challenges ranging from steep deposit requirements to access foreign exchange to the sudden withdrawal of horticulture investment incentives. They warned that birr depreciation is driving up repayment costs on forex-denominated loans, forcing costly recapitalizations to renew business licenses. They also flagged cash flow pressures from advance tax payments and local banks’ demand for large deposits before releasing forex.
Logistics bottlenecks including the mandatory use of Ethiopian Shipping & Logistics, container shortages, and delays in repatriating manifest charges, were also raised.
The horticulture sector cautioned that removing duty-free privileges for capital goods without a transition period has left shipments already in transit facing taxes of up to 92percent, threatening competitiveness and investor confidence.
Outgoing NBE Governor Mamo Mihretu acknowledged the issues.
He highlighted record-high foreign exchange reserves and Ethiopia’s first positive balance of payments. Foreign currency inflows climbed from 24 billion dollars last year to 33 billion dollars this year, driven by exports, remittances, and services.
Mamo projected single-digit inflation for the coming fiscal year and stressed that credit growth remains within the Bank’s stability objectives.
“For the first time in 12 years, there was no credit from the central bank to the treasury. This discipline supports our price stability objective,” he said.
EuroCham Board Chair Ben Depraetere praised the Bank’s reforms — including clearing nearly all backlogged dividend payments — but emphasized the need for continued dialogue to address new hurdles. They agreed to keep using the technical meetings as a platform to drive solutions and sustain reform momentum.
