Issue 243: New Tolls

1. Ethiopia Set to Redraw Its Payment Landscape

2. Council of Ministers Approves over 2.3 Trillion Birr Draft Budget for 2026/27

3. Ethiopia Begins Issuing New National Vehicle Plates

4. Food Insecurity Looms Larger as Middle East Crisis Pushes Fertilizer Costs to New Highs

5. Ethiopia’s Inflation Rises to 13.4% as Food Prices Put Pressure Back on Households

For a few brief years, Ethiopia’s digital-payments landscape felt like a frontier town. The rules were permissive, the barriers low, and the promise strong. A central bank directive in 2020 had thrown open the gates to non-bank operators, setting a tiered licensing framework with capital requirements as low as 3 million Birr for a payment gateway. A few startups rushed in. The fintech ecosystem, long dormant, began to stir. But frontiers, by their nature, attract settlers and speculators alike. Over the past few weeks, the National Bank of Ethiopia (NBE) has circulated a draft amendment that signals the end of that era and the beginning of a more sober, stability-obsessed phase of regulation.

The capital requirements stand out from the get-go. Under the draft, a National Switch Operator (effectively EthSwitch, the incumbent) would need 5 billion Birr in paid-up capital, a sixteen-fold increase from the 2020 baseline. A payment gateway operator, with a far lighter risk profile, would require 60 million Birr, twenty times the previous threshold. These jumps go well beyond inflation or currency depreciation. They could appear to some as a deliberate attempt to ensure that only well-capitalized players survive. The logic is not foolish: adequately capitalized operators are better able to absorb losses, maintain resilient infrastructure, and settle obligations under stress. International standards, including the CPMI-IOSCO principles, endorse high capital adequacy for systemically important infrastructure.

But can it be said that Ethiopia’s payment ecosystem has matured to the point where it is time to raise entry barriers? Read more.

Ethiopia’s Council of Ministers unanimously approved a historic 2.34 trillion Birr draft federal government budget for the upcoming 2026/2027 FY. The newly proposed budget significantly increases the government’s spending requirements, showing an increase of nearly 400 billion Birr (about 21.2 percent) compared to the 1.93 trillion Birr budget approved and implemented for the current 2025/26 fiscal year. Read More.

Vehicle owners in Addis Ababa began receiving Ethiopia’s new standardized vehicle license plates on Thursday, marking the launch of a nationwide registration overhaul that authorities say will modernize vehicle identification and curb fraud. The owners of privately owned fuel-powered vehicles will have to shell out 56,000 Birr for the plates, while electric vehicle owners will pay 44,500 Birr, and public transport operators 11,000 Birr. Read More.

A growing burden on teaching hospitals at public universities is leading the federal government to consider compelling regional administrations to cover a share of expenses in a bid to offset budgetary pressures. Read More.

The economic fallout from the conflict in the Middle East is threatening to deepen food insecurity across Africa, with rising energy, transport, and fertilizer costs expected to place additional pressure on countries already struggling with hunger, inflation, and fiscal constraints, according to a new World Bank report. Read more.

Ethiopia’s annual inflation rate rose to 13.4 percent in May 2026, as food prices accelerated for a third consecutive month, complicating the government’s effort to sustain a recent decline in the cost of living. The latest Consumer Price Index data from the Ethiopian Statistical Service showed headline inflation increased from 11.7 percent in April and 9.4 percent in March, reversing part of the gains recorded earlier in the year. Read More.