Ethiopia stands prominently among African nations grappling with large-scale illicit financial flows (IFFs), according to a comprehensive report assessing cumulative IFFs from the continent over the period 1970 to 2008. These illicit financial outflows, which include money illegally earned, transferred, or used, represent a severe drain on Africa’s economic resources, undermining development efforts and exacerbating poverty.

The data reveal a striking concentration of IFFs in a select group of countries, with the top 10 nations accounting for approximately 79 percent of Africa’s total illicit financial outflows during the nearly four decades under review. While oil-exporting countries in North and West Africa dominate the scale of these outflows, with Nigeria responsible for an overwhelming 79 percent of West Africa’s IFFs, and Egypt and Algeria jointly accounting for 66 percent of North Africa’s, non-oil-exporting countries such as South Africa, Morocco, Côte d’Ivoire, and Ethiopia also register significant levels.

Nigeria’s oil sector, in particular, drives its staggering share of illicit financial outflows, a trend mirrored by Egypt and Algeria, whose economies also rely heavily on hydrocarbons. These countries’ heavy dependence on natural resources creates fertile ground for illicit financial activities through mechanisms such as trade misinvoicing, abusive transfer pricing, secret contracts, and corruption which facilitate the leakage of capital beyond their borders.

For Ethiopia, although not an oil-producing country, illicit outflows are still pronounced, constituting a critical challenge for national development. Over the 38-year period, Ethiopia’s cumulative illicit financial flows amounted to substantial levels, reflecting vulnerabilities linked to governance challenges, limited institutional capacity, and the complex global financial systems exploited by perpetrators. The impact of these outflows is particularly glaring given Ethiopia’s development needs and ambitions to accelerate economic growth and reduce poverty.

The consequences of these illicit financial outflows are multifaceted. Foremost among them is the loss of valuable domestic resources that could otherwise have been invested in infrastructure, healthcare, education, and social services needed to improve livelihoods across the continent. The loss further impedes Africa’s ability to mobilize domestic finances, heightening dependence on official development assistance, which has shown signs of stagnation in recent years.

The report draws attention to the intricate nature of IFFs, which comprise commercial activities such as tax evasion and aggressive tax avoidance by multinational corporations, criminal elements including money laundering and trafficking, and corrupt practices by public officials abusing entrusted power. Among these, commercial illicit flows represent the lion’s share, underscoring the need for enhanced regulatory oversight and transparency in business operations.

Policy experts stress that addressing the problem of illicit financial flows requires political will and coordinated global action. African governments must strengthen economic governance institutions, including tax administrations, customs, and anti-corruption agencies, to detect, deter, and prosecute illicit activities effectively. Equally important is international cooperation to regulate financial secrecy jurisdictions and tax havens that facilitate the concealment and movement of illicit funds.

Ethiopia has taken steps toward improving financial transparency and governance, but still faces challenges related to capacity constraints and the complexities of global finance. The nation’s vulnerability to IFFs is further exacerbated by inadequate data systems and limited access to comprehensive trade and financial information needed to track suspicious transactions accurately.

The report calls for African countries, including Ethiopia, to harmonize tax policies, enhance information exchange frameworks, and adopt international standards such as country-by-country reporting and beneficial ownership disclosure. Moreover, Africa must engage actively in global forums to ensure its priorities are represented in the ongoing efforts to curb illicit outflows.

The concentration of illicit financial flows in a handful of countries highlights the critical need for targeted interventions. For resource-rich countries like Nigeria and Algeria, reforming extractive sector governance and ensuring transparency in contract negotiations can significantly reduce capital flight. For Ethiopia and other non-oil economies, diversifying economic activities, strengthening institutions, and fostering regional cooperation are key strategies.

Africa is experiencing one of the fastest growing private wealth markets globally as its millionaire population is projected to rise by 65% over the next decade, according to the Africa Wealth Report 2025, published by Henley & Partners in partnership with New World Wealth. This remarkable growth highlights Africa’s increasing economic resilience and the emergence of new wealth hubs despite ongoing global economic headwinds.

Currently, the continent is home to 25 billionaires, 348 centi-millionaires (individuals with wealth exceeding $100 million), and approximately 122,500 millionaires. This represents a dramatic transformation from the late 20th century, when African economies largely faced decline and only a handful of billionaires existed. The report credits Africa’s rising wealth to robust regional economic growth, with sub-Saharan Africa forecast to expand at 3.7% in 2025—outpacing both Europe (0.7%) and the US (1.4%)—and 4.1% in 2026.

South Africa dominates Africa’s wealth landscape, accounting for 34% of the continent’s millionaires with 41,100 individuals, nearly equal to the total millionaire populations in the next five wealthiest African countries combined: Egypt, Morocco, Nigeria, Kenya, and Mauritius. Of these, Mauritius stands out as the fastest-growing high-net-worth individual (HNWI) hotspot, posting a 63% increase in its millionaire population over the past decade, underpinned by political stability and favorable investment frameworks. In contrast, Nigeria, Africa’s largest economy, has seen a decline in its millionaire population by nearly 47%, reflecting complex economic pressures.

At the city level, Johannesburg leads as Africa’s wealthiest city, with 11,700 resident millionaires anchored by its commercial Sandton district and emerging luxury residential areas. Cape Town ranks second with 8,500 millionaires and holds the distinction of having Africa’s largest concentration of centi-millionaires. The city also boasts Africa’s most expensive prime residential real estate market, signaling its rising attraction as a lifestyle and investment destination. Cairo and Nairobi follow, with Nairobi representing a growing economic powerhouse in East Africa.

Despite this momentum, political tensions, governance challenges, and mobility restrictions continue to cast shadows on Africa’s wealth story. The report highlights a widening “mobility gap” as many African nations face increased visa restrictions, curtailing their citizens’ global travel freedom and economic opportunities. In response, affluent Africans are increasingly seeking alternative citizenship and residence rights to secure global mobility, educational access, and investment diversification.

Looking toward the future, experts note that Africa’s wealth growth is expected to be driven by emerging sectors such as fintech, renewable energy, healthcare, biotech, and eco-tourism. Lifestyle and tourism hubs like Mauritius, Namibia, Seychelles, and Morocco are poised to attract significant wealth inflows amid shifting global preferences. The continent’s youthful population, with a rising middle and upper class, is also seen as a critical force in shaping Africa’s socio-economic transformation.

The report concludes with a hopeful note, emphasizing that the surge in millionaires and private investable wealth—estimated at $2.5 trillion—presents a unique opportunity for Africa. The key challenge lies in translating this wealth into broad-based economic development, creating sustainable ecosystems where prosperity circulates locally, benefits communities, and positions Africa as a leader in the global wealth landscape.

After years of postponements, the much-anticipated construction of the Gerbi Drinking Water Dam project is officially scheduled to commence in the fiscal year 2018 Ethiopian Calendar (2025/26 Gregorian), according to information exclusively obtained by The Capital.

The Addis Ababa city administration has taken the bold step of funding the project independently, thereby overcoming previous hurdles related to loan delays from China Exim Bank, which had been in limbo since 2016. This decisive move clears the path for the long-awaited infrastructure development critical to the capital’s water supply.

The Gerbi Dam is a vital component of Addis Ababa’s water infrastructure system and is designed to produce over 73,000 cubic meters of water daily. According to earlier research, upon successful completion, the dam is expected to meet the city’s growing water demands for up to 20 years without disruption. Valued at approximately 3 billion birr, the project faced numerous challenges over the years, including the need for enhanced feasibility studies and the establishment of a new regulatory framework.

In December 2024, Addis Ababa Mayor Adanech Abiebie held crucial discussions with Chen Hai, China’s Ambassador to Ethiopia, alongside representatives from the CGCOC Group, the Chinese construction company assigned to the project. The meeting resulted in a renewed agreement on collaboration.

Mayor Adanech stated, “To support this project under the city administration’s budget, we will work closely with the Chinese Embassy and CGCOC. We have reached an agreement that will help us accelerate the construction process and respond effectively to the city’s water supply needs.”

The project, anticipated to span three to four years, will be administered under the supervision of the Addis Ababa Water and Sewerage Authority (AAWSA). Beyond the dam itself, the initiative includes the development of a filtration station and the installation of new water distribution pipelines, aimed at significantly improving residents’ access to safe drinking water. Officials have set an ambitious target to complete up to 20% of the project during the upcoming fiscal year.

Meanwhile, AAWSA has reported notable financial growth. In the 2024/25 fiscal year, the authority generated revenue exceeding 5 billion birr, with plans to increase this figure to 7.5 billion birr by the fiscal year 2018 EC. The agency’s forward-looking plans include the collection and treatment of 40.04 million cubic meters of wastewater, with 39.01 million cubic meters processed through existing pipelines and approximately 1.03 million cubic meters collected via vehicle transport.

Ethiopia’s digital economy has experienced rapid growth, with digital transactions now exceeding 18 trillion birr annually, more than three times the country’s gross domestic product (GDP), according to the National Bank of Ethiopia (NBE). This milestone was announced during the official launch of FenanPay, a new digital payment platform developed by Ethiopian talent under B-Net Technology Solutions.

Solomon Damtew, Director of Payment and Settlement at the NBE, highlighted the dynamic transformation taking place in Ethiopia’s digital finance sector. “The digital finance sector is changing rapidly,” Solomon said. Previously dominated solely by banks, the ecosystem is now expanding to include innovative institutions like FenanPay. He emphasized that within a single year, digital transactions in Ethiopia will surpass 18 trillion birr, underscoring the sector’s massive growth potential. However, Solomon noted that the majority of Ethiopians remain outside the digital financial system, pointing to significant opportunities yet to be explored.

The newly launched FenanPay aims to address two key barriers hindering financial inclusion in Ethiopia: high transaction fees and fragmented payment systems. Data indicates that although Ethiopia’s population approaches 130 million, only 39% have access to banking services, and a mere 9% actively use banking or mobile money platforms.

Biniam Negesu Mulisa, Board Chairman of FenanPay, explained that the platform intends to create a single digital hub uniquely connecting all banks, providing comprehensive services to businesses and consumers alike. By doing so, FenanPay aims to reduce transaction fees dramatically, working towards the ambitious goal of zero commission. “We built this system entirely with Ethiopian talent,” Biniam said. He proudly cited FenanPay’s impressive 99% transaction success rate within just five months of licensing, which has fueled continued collaboration with the National Bank.

Beyond payment services, FenanPay plans to offer essential software solutions designed to help businesses optimize operations and cut unnecessary costs. During a six-month trial phase, the platform successfully processed over 1.5 million transactions, transferring more than 1.5 billion birr, demonstrating its reliability and efficiency well before its formal launch.