Ethiopia

Exchange controls

Ethiopia used to have stringent foreign currency controls, which were regulated through Directives issued by the National Bank of Ethiopia (NBE) and applied to both resident and foreign companies. The Directives were used to govern the flow of foreign exchange, and, generally, all outgoing and incoming foreign currency denominated funds were regulated.

However, on 30 July 2024, the NBE announced the liberalisation of Ethiopia’s foreign currency exchange system. The NBE issued a new directive to govern all foreign currency exchange control-related issues, repealing all previously issued guidelines and directives.

With this new development, foreign currencies will now be transacted based on market rates. The NBE has lifted restrictions on foreign exchange trading, allowing banks and authorised foreign exchange dealers to buy and sell forex at freely negotiated rates as the currency floats.

Adoption of IFRS

Ethiopia has adopted international standards for financial reporting, including International Financial Reporting Standards (IFRS), as well as International Public Sector Accounting Standards (IPSAS) for public sector entities, including not-for-profit organisations.