By Miwodew Muluye
Addis Ababa, (AMECO)- For decades, rigid foreign exchange controls and heavy import reliance constrained Ethiopia’s foreign trade balance. That trajectory shifted in July 2024 when the government abandoned its 30-year-old crawling-peg system in favour of a market-determined floating exchange rate.
The reform restored trade competitiveness, driving annual export earnings from under $3bn before the liberalisation to a record $10.7bn in 2025-26.
Multilateral backing
The macroeconomic float was anchored by substantial international financial support:
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International Monetary Fund: A $3.4bn Extended Credit Facility to support foreign exchange float and macroeconomic stabilisation.
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World Bank: A $1bn Development Policy Operation targeted at trade competitiveness and structural reform.
Export revenue trajectory
Market-rate incentives drove consecutive years of rapid export growth:
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2023-24: $3.8bn (baseline prior to liberalisation)
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2024-25: $8.3bn (initial post-float adjustment)
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2025-26: $10.7bn (record high, up 29% year-on-year and beating annual targets by 14%)
Key export drivers
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Gold surge: Aided by market exchange rates and a 45% surge in international prices, gold became the single largest foreign exchange earner, generating $5.5bn.
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Record coffee sales: Coffee export value reached $3bn in 2025-26, accounting for roughly 28% of total national export receipts.
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Manufacturing and industrial parks: Exports from state-supported industrial parks reached a record $266.9m, driven by product diversification into electronics and solar panels.
Economic outlook and risks
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Balance-of-payments gains: Gross foreign exchange reserves more than doubled to exceed $3.4bn, while headline inflation fell to 9.7%.
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Commodity concentration: Gold ($5.5bn) and coffee ($3bn) account for 78% of total export receipts, leaving foreign exchange earnings vulnerable to international price shocks.
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Artisanal dependence: Gold volumes remain heavily dependent on small-scale artisanal mining rather than commercial industrial capacity.
