Ethiopia’s banking sector stands at a critical crossroads, facing the daunting task of encouraging innovation, while at the same time grappling with complex financial concerns and regulatory challenges. This tension was evident at the recent industry meeting, ” securing Sustainable Growth Balancing Innovation with Intelligent Risk Management,  ITSS Ethiopia Hosted by Sheraton Addis on February 26 in collaboration with Comfort|Temenos.

The event, attended by dignitaries from institutions such as Awash Bank, Sun Bank, Ethiopian Development Bank, It-Switch and Bank of Abyssinia, highlighted the urgent need for the sector to embrace digital transformation. However, the discussions show that the path to achieving modernization is fraught with obstacles primarily related to risk management and legal compliance.

A consistent theme throughout the event was the importance of using technology to improve customer experience and operational efficiency. Banks are well aware of the need to adopt digital solutions to remain competitive and meet the changing needs of their customers. However, this push for innovation has been undermined by ever-evolving financial risks, increasing cyber security breaches, and the need to manage changing regulatory conditions.

There is a clear understanding that technology is the future, in the same way that there is also an attentive awareness of inherent risks,” said at the events . “Finding the subtle balance between innovation and risk reduction is critical to sustainable growth.”

Key insights from the event highlighted the sector’s major challenges: aggressive monitoring of digital solutions must be accompanied by robust cyber security measures and strict compliance with flexible regulatory requirements

In addition, the discussions explored the importance of developing sustainable growth strategies, including adopting new business models and implementing financial inclusion initiatives. These initiatives are seen as critical components of Ethiopia’s banking future and provide opportunities to expand access to financial services and encourage economic growth.

The event served as a critical platform for networking and knowledge exchange and provided participants with practical strategies for navigating through the complexities of Ethiopia’s rapidly growing financial sector. However, it also highlighted the ongoing struggle to align innovation with risk reduction – a challenge that will undoubtedly shape the future of Ethiopian banking.

Ahead of the 2025 Conference of African Ministers of Finance, Planning, and Economic Development, a Committee of Experts has gathered at the United Nations Conference Centre in Addis Ababa for a three-day meeting. The session, running from March 12 to March 14, aims to assess Africa’s economic and social development while evaluating progress toward regional integration under the African Continental Free Trade Area (AfCFTA).

Themed “Advancing the Implementation of the Agreement Establishing the African Continental Free Trade Area: Proposing Transformative Strategic Actions,” this year’s conference seeks to address critical challenges and opportunities in realizing the AfCFTA’s potential.

Opening the expert segment, Ethiopia’s State Minister of Finance, Semereta Sewasew, emphasized that the AfCFTA is more than a legal framework—it is a transformative initiative aimed at fostering industrialization, job creation, and poverty alleviation. “The AfCFTA underscores the urgency of unlocking Africa’s economic potential through enhanced intra-African trade,” she said.

Minister Sewasew highlighted Ethiopia’s commitment to regional integration through investments in infrastructure projects like the Addis Ababa-Djibouti railway and energy resources such as the Grand Ethiopian Renaissance Dam. However, she acknowledged significant hurdles to AfCFTA implementation, including infrastructure gaps, financing constraints, and varying capacities among member states. She urged delegates to propose actionable recommendations to ensure tangible progress for women, youth, and small and medium enterprises (SMEs), which form the backbone of Africa’s economy.

Antonio Pedro, Deputy Executive Secretary of the Economic Commission for Africa (ECA), underscored the AfCFTA’s role as both a development blueprint and a political platform for asserting Africa’s collective interests globally. He called for reducing Africa’s dependency on imports by leveraging local production capabilities for key commodities such as fertilizers and refined petroleum.

Pedro noted that intra-African trade remains low, accounting for only 14.4% of total trade on the continent. He projected that reducing tariffs and non-tariff barriers under the AfCFTA could increase intra-African trade by 45% by 2045. However, he stressed that achieving this goal requires significant investments in infrastructure—estimated at $411 billion for transport systems like railways, vessels, and trucks.

The outgoing Chair of the Conference of Ministers from Zimbabwe highlighted ECA’s achievements over the past year in supporting member states with macroeconomic stability, development planning, and industrialization. However, he emphasized the need for a fair global financial system to support Africa’s transformation through the AfCFTA.

Participants also discussed systemic challenges such as limited infrastructure funding and non-tariff barriers that hinder cross-border trade. Despite these obstacles, there was optimism about the AfCFTA’s potential to create jobs, boost income levels by $450 billion by 2035, and lift 30 million Africans out of extreme poverty.

The preparatory meeting sets the stage for next week’s ministerial segment on March 17-18, where African finance ministers will deliberate on recommendations from the experts’ session. As one of Africa’s premier forums for policy dialogue on economic development, this conference underscores the importance of collective action in advancing regional integration and sustainable growth.

By addressing challenges head-on and implementing transformative strategies, African nations have an opportunity to harness the full potential of the AfCFTA—a game-changing initiative poised to reshape the continent’s economic future.

Ethiopia has extended an open invitation to Kenyan businesses, highlighting the vast potential of its emerging market, particularly in sectors like banking, imports, and retail. However, despite this optimism, significant obstacles remain in translating policy reforms into tangible trade benefits.

The second Ethiopia-Kenya Business Conference, held in Addis Ababa, underscored the importance of collaboration between the two nations. George Orina, Ambassador of Kenya to Ethiopia, noted the historic decision to allow foreign investment in the Ethiopian banking sector, stating, “The doors have opened for Kenyan banks to come here in Ethiopia and do business.” However, this opportunity is tempered by ongoing challenges.

Despite existing trade agreements, such as the 2012 Special Status Agreement, trade volumes between Ethiopia and Kenya remain below expectations. “We need to improve on translating agreements into concrete action,” Ambassador Orina emphasized.

The conference highlighted severe foreign exchange shortages and bureaucratic obstacles as major hurdles to trade between the two countries. While recent reforms by the National Bank of Ethiopia allowing for freely negotiated foreign exchange rates are expected to alleviate these issues, their practical impact remains to be seen.

Tobias Alando, CEO of the Kenya Association of Manufacturers (KAM), emphasized Ethiopia’s strategic importance in accessing North African markets through the African Continental Free Trade Area (AfCFTA). He urged Kenyan businesses to form joint partnerships with Ethiopian counterparts to navigate the complex market environment and seize emerging opportunities.

“We would like to see such discussions create more trade agreements between us,” Alando said, highlighting the focus on business-to-business partnerships.

The Ethiopian market presents a compelling opportunity for Kenyan businesses, but they must navigate significant operational challenges. The success of this economic partnership will depend on both governments’ commitment to addressing these barriers and facilitating smooth trade flows.

As Ethiopia continues to open up its sectors, including banking, to foreign investment, there is potential for increased collaboration and mutual benefit. However, overcoming bureaucratic and foreign exchange challenges is crucial for realizing these opportunities.

The 6th Business Fair and Business Conference of the Common Market for Eastern and Southern Africa (COMESA) is set to take place in Addis Ababa from May 7 to 9, 2025. Organized by the Ministry of Trade and Regional Integration (MoTRI) in collaboration with COMESA, the event aims to empower women entrepreneurs and youth by creating market opportunities and fostering skills development.

Held under the theme “A Thriving COMESA Through Gender-Responsive Regional Integration: Unlocking Opportunities in Green Investments, Value Chains, Tourism, and Mining,” the conference will focus on sectors such as agribusiness, textiles, tourism, digital marketing, intellectual property services, and financial delivery, with a special emphasis on green development and sustainable growth.

The event is expected to attract over 500 participants, including 300 women entrepreneurs, 100 government officials, and 100 representatives from partner organizations. Additionally, more than 200 business-to-business (B2B) discussions will be held during the conference, which is projected to generate $260 billion in GDP across the region.

Despite its ambitious goals, the conference highlights ongoing challenges faced by women entrepreneurs and youth in the COMESA region. Speaking at a media briefing ahead of the event, Yasmin Wohabrebbi, State Minister of Trade and Regional Integration, acknowledged that women and youth are key drivers of innovation and economic growth but continue to face significant barriers.

“Limited access to financing, market shortages, and socio-cultural barriers have hindered women’s ability to fully contribute to trade and investment in the region,” Yasmin noted. She emphasized that addressing these challenges is critical for achieving sustainable regional economic integration.

Maureen Sumbewe, Chairperson of the COMESA Federation of Women in Business (COMFWB), echoed this sentiment. “While this program will significantly enhance the empowerment of businesswomen and entrepreneurial youth, more efforts are needed to overcome persistent obstacles,” she said.

The COMFWB Trade Fair is recognized as one of Africa’s largest gatherings of women and youth entrepreneurs. It provides a platform for networking, knowledge sharing, business pitching, matchmaking, and B2B interactions. The event also aims to strengthen economic ties among member nations while showcasing products and services from across the region.

This year’s fair will feature participation from women’s business associations across COMESA’s 21 member states. Exhibitors will include representatives from various industries such as agribusiness, textiles, tourism, cutting-edge technologies, digital commerce, and financial services. The focus on green investments aligns with global sustainability goals while promoting inclusive economic growth.

The event underscores the importance of regional integration in unlocking opportunities for women entrepreneurs. By fostering collaboration among member states through initiatives like the COMESA Free Trade Area (FTA), which serves a market of over 600 million people with a combined GDP of $260 billion, the fair seeks to enhance intra-regional trade and investment.

“We look forward to seeing African women entrepreneurs connect with international buyers and partners,” Sumbewe added. “This is an opportunity to create business linkages that will drive growth across borders.”