Prime Minister Abiy Ahmed addressed the business community’s and experts’ concerns over Franco-Valuta’s openness policy. Ethiopia will triple Egypt’s wheat production, making it Africa’s top producer.

Abiy’s most recent statement, made during his appearance in parliament this week, calls for the repeal of the Franco-Valuta openness policy, which had been in effect for three months.

A few weeks ago, Capital revealed that illegal actors now have a means to channel foreign currency via their unlawful scheme thanks to the Franco-Valuta openness policy, which was put into place in tandem with macroeconomic reform and the liberalization of the FX market.

Experts said that it would be challenging for the authorities to taint the black market.

The illicit foreign exchange market is created by people operating at key crossings, according to industry experts, including importers and bank executives contacted by Capital very recently.

The government has liberalized the exchange rate in relation to the reform, which takes effect on July 29. This allows the market to establish the exchange rate based on the market or the interests of traders (individuals and banks).

The government reported that since the reform went into force, the gap between the legal and parallel currency markets has shrunk to three percent, according to a statement by Mamo Esmelealem Mihretu, Governor of the National Bank of Ethiopia. In addition, the inward remit has increased vertically, which has enhanced banks’ liquidity.

Experts in the field, however, assert that the forex market is being impacted by some of the government’s actions made in relation to the reform.

Specifically, they emphasized that the government’s Franco-Valuta strategy is indeed acceptable.

“The idea behind the government’s decision to launch the Franco-Valuta plan makes sense because the free flow of products and services is essential to a market economy, but the choice was made relatively early,” they said.

Before the reform, relatively few necessities were subject to the Franco-Valuta, while other items were meant to be imported after the official banking process.

Through the Franco-Valuta scheme, foreign exchange is accessed outside of the banking system.

The freedom to transport goods and services is what motivates the Franco-Valuta.

Zemen Bank President Dereje Zebene claims that it is not necessary to adhere to the same bureaucracy as the banking system.

As the government opened up the exchange rate, importers told Capital that the goal of implementing an effective Franco-Valuta was to permit the free flow of goods and services.

“This is good, but the concept is misinterpreted in the market, and some traders are abusing the opportunity to evade even some legal responsibilities,” the importers said.

According to experts, people prefer simple ways to obtain foreign exchange. “And as long as the country allows the payment instrument that the importer uses to buy the goods, anyone can import small to large goods or services without any preconditions,” the experts stated about the Franco-Valuta scheme.

 “Controlling it is challenging; therefore, in the absence of a system to verify the resource’s source, it will serve as a haven for illegal activity and promote a parallel market,” they clarified.

“You are supposed to ease the requirements at banks since you opened up the Franco-Valuta, which may access foreign currency from informal sources,” Dereje told Capital.

“The liberalized exchange rate will draw individuals seeking true value for their money, but if they have other options, they will pursue them, which will not be consistent with our current circumstances,” a banker stated.

“Improving the legal system’s liquidity is also essential to reducing illegal acts,” he added.

According to him, most merchants would choose to employ the most straightforward scheme, regardless of how the revenue administration decides to handle the tax inquiry.

“It will be used if banks have a plentiful supply of foreign currency, which would lower the exchange rate and benefit importers. However, even though the official system is improving, since you launched the Franco-Valuta when there are some problems, the forex flow will be impacted,” he continued.

“Ample resources should be available in the banking system if authorities prefer to continue on the current decision,” stated the head of Zemen Bank three weeks ago. The government should, in my opinion, keep allowing the Franco-Valuta for a few essential goods rather than allowing it for everything.

Abiy said on Thursday, October 31, that although the opening of Franco Valuta was not a component of macroeconomic reform, it was implemented with the intention of promoting the recovery of the nation’s outflow of resources.

He told lawmakers, “The other target was to give banks time to adjust to the economic opening up and fill the market with ample commodities, even though it has negative impact.”

“A new change will be applicable very soon on the Franco Valuta system, as the result that we evaluated indicated that it would not need to apply the policy further,” Abiy continued.

The PM stated that the nation would produce 30 million tons of wheat this fiscal year, a huge triumph for his government.

According to him, 8.2 million hectares would be used for farming, which is defined as producing fewer than 40 quintals per hectare.

Egypt is now Africa’s largest producer of wheat, with an annual production of over 9.5 million tons, followed by Ethiopia, which is estimated to produce over seven million metric tons.

The PM claims that the nation would surpass the continent’s leading wheat producer in terms of production by three times within the budget year.

According to him, the shipping of 450,000 tons of coffee, Ethiopia’s main source of foreign exchange, is anticipated to bring in USD 2 billion throughout the budget year. 

Ethiopia is among the countries now targeted by the Grandoreiro banking trojan, a significant cyber threat that has expanded its reach into Africa and Asia. According to a recent report by Kaspersky, the Grandoreiro malware has been active since 2016 and is responsible for approximately five percent of global banking trojan attacks in 2024.

Kaspersky’s Global Research and Analysis Team (GReAT) revealed that the trojan is currently targeting over 1,700 financial institutions and 276 cryptocurrency wallets across 45 countries. This includes several African nations, such as Algeria, Angola, Ghana, Ivory Coast, Kenya, Mozambique, Nigeria, South Africa, Tanzania, Uganda, and notably Ethiopia.

Despite efforts to combat this threat, including the arrest of key operators in early 2024, Grandoreiro continues to evolve. The malware’s creators have developed lighter versions to evade detection and continue their operations. The new variants are particularly concerning as they have been linked to an increase in incidents reported in Mexico, where around 51,000 cases were recorded this year alone.

Fabio Assolini, head of Kaspersky’s Latin American division, noted that the fragmented nature of these newer versions indicates a shift in tactics among cybercriminals. “These developments underscore the evolving nature of the threat,” he explained. “Fragmented and lighter versions may represent a trend that could extend beyond Mexico and into other regions.”

Kaspersky’s analysis indicates that the Grandoreiro trojan employs sophisticated techniques to mimic legitimate user behavior, making it harder for security systems to detect fraudulent activity. By recording mouse movements and simulating real user patterns, the malware aims to bypass machine learning-based security measures.

As Ethiopia grapples with this emerging cyber threat, Kaspersky emphasizes the need for heightened awareness and robust cybersecurity measures among financial institutions and users alike. The spread of Grandoreiro serves as a stark reminder of the importance of international cooperation in combating cybercrime and protecting vulnerable economies from financial exploitation.

Huawei has recognized the accomplishments of university students who participated in the national and continental finals of the Huawei ICT Competition. The company celebrated these achievements while also announcing the launch of the 2024-2025 competition, aimed at fostering technological skills among students across Ethiopia.

The ICT competition, organized in collaboration with the Ministry of Education, saw over 2,500 students register this year. Of these, 120 qualified for the national finals and received participation certificates, while nine students represented Ethiopia at the sub-continental competition in Tunisia, where they secured a commendable third-place finish. Additionally, a team of three students achieved notable success at the international finals held in Shenzhen, China.

Liming, Head of Public Relations for Huawei Ethiopia, highlighted the significance of the ICT competition during a recent ceremony. “The Huawei ICT competition is invaluable for our young people and serves as a catalyst for their personal and professional development,” he stated. “By participating, students gain experience with cutting-edge technologies while honing their technical skills to prepare for a changing job market.”

Zelalem Assefa, CEO of the Ministry of Education’s ICT and Digital Education sector, emphasized the competition’s role in enhancing employment opportunities and fostering entrepreneurial thinking among students. He commended Huawei for its commitment to developing student skills through initiatives like the ICT Academy.

Seminew Keske, representing the Minister of Innovation and Technology, noted that competitions like the Huawei ICT Competition equip young people with essential technical skills while promoting critical thinking, teamwork, problem-solving, and innovation—qualities vital for developing future leaders in technology.

At the event, Huawei officially launched its 9th International ICT Competition for 2024-2025, with registration open until December 31. This annual competition aims to enhance and showcase students’ skills in information and communication technology (ICT), providing a platform for participants to demonstrate their knowledge and practical abilities in various ICT fields.

The Horn of Africa is facing a critical juncture as civil wars and conflicts continue to threaten the lives of countless civilians, leading to widespread persecution and economic crises. In light of these escalating challenges, there is an urgent need to restore peace and stability in the region.

The ongoing turmoil in the Horn of Africa has not only heightened tensions within the continent but has also drawn international concern. Factors contributing to this instability include inadequate government action, a lack of civil society participation, and the exclusion of marginalized groups, including people with disabilities, from peace-building processes.

In response to these pressing issues, the American Friends Service Committee (AFSC) and Bread for the World launched the Horn of Africa Advocacy Strategy for Peace and Stability (ASPS) on October 16-17, 2024, in Addis Ababa. This ten-year regional strategy aims to address chronic problems and promote sustainable peace initiatives across the Horn of Africa.

Moses Chasich, Director of Salama Hub, emphasized the urgency of the situation, stating, “The call to action to restore peace and stability in the East and Horn of Africa has never been more dire.” He warned that without sustained efforts in conflict management, post-conflict reconstruction, governance improvement, and sociopolitical culture change, the region could face worsening conditions over the next five to ten years.

The ASPS focuses on five key pillars: research-based advocacy, inclusion, transitional justice and healing, governance, and climate and environmental justice. Chasich highlighted the importance of including people with disabilities in implementing this strategy, particularly in its second pillar.

In conflict-affected East Africa, individuals with disabilities have demonstrated their resilience and potential, underscoring the necessity of advocating for disability rights at a political level. The ASPS serves as a framework for programs and projects aimed at fostering peace-building efforts throughout the region.