The Ethiopian Diaspora Service has announced that over USD 2.5 billion in foreign exchange was received from the diaspora over the past five months. Ambassador Fitsum Arega, Director General of the service, revealed that the surge was largely attributed to macroeconomic reforms, particularly those implemented by the National Bank of Ethiopia.
According to Ambassador Fitsum, allowing foreign exchange rates to be market-driven has boosted export trade, while enabling the formal banking system to process foreign exchange previously brought into the country illegally has also yielded substantial benefits. Banks in Ethiopia have now prepared home construction loans worth up to USD 100 billion. This initiative has spurred an increase in foreign currency account openings, as advance savings are required to qualify for the loans.
Additionally, the introduction of systems allowing dollar deposits and withdrawals has encouraged more investments, with returns in local currency proving highly lucrative. Ambassador Fitsum noted that diaspora contributions, including remittances and export-related revenues, have shown an upward trend since September. Fueled by diaspora arrivals and remittances, further growth during the Christmas and Baptism holiday seasons is expected.
While noting the diaspora’s growing investment in real estate and other sectors, the ambassador acknowledged past challenges, including unreliable systems that deterred many from sending money or investing in Ethiopia. However, the anticipated launch of a capital market is set to address these issues, creating a more transparent and trustworthy environment for diaspora engagement.
Source: The Ethiopian Herald
