The Addis Ababa Environmental Protection Authority (EPA) is set to begin enforcing a new federal directive targeting emissions from aging vehicles, in a move aimed at curbing pollution in Ethiopia’s capital. The directive, issued by the Ministry of Transport and Logistics (MoTL) under the title Directive on Vehicle Emission Pollutant Control, introduces stricter environmental standards and penalties for non-compliance, including the possible permanent suspension of vehicles that fail to meet requirements after an initial grace period.

Dida Diriba, General Manager of the city’s EPA, confirmed that the authority is fully prepared to implement the regulation in coordination with the Transport Bureau, Traffic Police, and traffic management agencies. “Gas emission is a key challenge we are now prioritizing,” Dida told Capital. “A standard has been set, and every vehicle must now possess a certificate of verification. We will also conduct instant inspections, similar to alcohol tests, to ensure compliance.”

As part of the broader campaign, the government has also halted the importation of used cars, a measure intended to reduce the number of high-emission vehicles on the roads. Authorities plan to work closely with garages to carry out the necessary mechanical and technological upgrades needed to meet the new standards. The directive is expected to take effect this week.

In line with the government’s push for cleaner transportation, local company Eco Tech Solution plc has introduced the “Combustion Optimizer,” a fuel efficiency and emissions reduction device manufactured by Italy-based Supertech. The aftermarket device is designed for both gasoline and diesel engines, improving fuel combustion efficiency by using detergents to clean critical engine components. This process, according to the manufacturer, enhances fuel burn, cuts unburned hydrocarbon emissions, and improves fuel economy.

Supertech’s Commercial Director, Luigi Salemi, said the device has been available for a decade in overseas markets and has been particularly effective in countries with older vehicle fleets. “We see significant potential in growing economies like Ethiopia, where cars are typically older than in Europe or North America,” Salemi told Capital. He confirmed the company had engaged with Ethiopian authorities and chosen Eco Tech Solution as its local partner based on its capability to oversee a project-based rollout.

Eco Tech Solution’s Marketing Manager, Nahom Mesfin, said the device can reduce carbon emissions by up to 80% and cut fuel consumption by around 20%, aligning with the government’s new environmental requirements. To ensure both reliability and efficacy, the company will avoid direct-to-consumer sales. Instead, products will be distributed exclusively through a network of trained agents and licensed garages.

“We are providing specialized training for technicians at garages and vehicle inspection centers to ensure the device is installed correctly,” Nahom said. “This controlled distribution model is crucial for guaranteeing the technology’s effectiveness for consumers and for delivering the intended environmental impact.”

With both regulatory enforcement and technological solutions moving in tandem, officials and market players hope the combined effort will accelerate Addis Ababa’s transition toward cleaner, more sustainable urban transportation.

The Ethiopian birr has emerged among the weakest performing currencies in sub-Saharan Africa this year, depreciating by more than 10 percent against the U.S. dollar by the end of September 2025. The decline marks a significant setback for Ethiopia’s foreign exchange market, deepening challenges for businesses struggling to access hard currency and widening the premium in the parallel market.

Recent data show that the birr’s decline places it alongside the South Sudanese pound among the region’s poorest performing currencies of 2025. Analysts note that the ongoing volatility highlights persistent structural constraints in the country’s foreign exchange environment and underscores difficulties many businesses face in securing dollars through official channels.

A World Bank report released on October 8, 2025, revealed that the National Bank of Ethiopia (NBE) has implemented a string of corrective measures aimed at stabilizing the currency and narrowing the black market divergence. The measures include tightening regulations on banks’ foreign exchange transaction and service fees while restricting sales to priority sectors such as trade, personal travel, and essential goods.

The report also noted that despite escalating forex pressures, Ethiopia’s 2025 economic growth forecast has been revised upward by 0.7 percentage points, driven by resilient domestic activity and stronger performance in key industries. This gain, along with improvements in Nigeria and Côte d’Ivoire, has positioned Ethiopia among the few African economies with an upgraded growth outlook this year.

Over the long term, Ethiopia’s per capita income had grown at an average annual rate of 5.9 percent between 2000 and 2019, according to World Bank figures. However, recent data from global trading platform XS.com underscore the birr’s continued depreciation against major currencies. As of October 7, 2025, the exchange rate stood at approximately 144.50 birr per U.S. dollar, or $0.0069 per birr.

Economists attribute the weakening currency to multiple domestic pressures, including high inflation, a persistent trade deficit, and political instability that have collectively undermined investor confidence. While the government continues to pursue gradual foreign exchange liberalization, the birr remains under downward pressure, with its official rate still overvalued relative to parallel market rates.

The World Bank’s regional review placed the Ethiopian birr 18th among Africa’s 21 weakest currencies in 2025. A similar assessment by the XS.com Economic Institute ranked Ethiopia as the 26th poorest country globally, positioning its currency just below Yemen and slightly above Haiti in comparative strength.

The International Monetary Fund (IMF) has reiterated that exchange rate evaluations are based on official currency benchmarks against the U.S. dollar, reflecting each country’s macroeconomic fundamentals and market confidence. For Ethiopia, the current trend underscores the complex balance between market reforms and macroeconomic stability as the nation moves toward more liberalized foreign exchange management.

Authorities have initiated a comprehensive financial crackdown on two of Addis Ababa’s most notable international schools, launching simultaneous investigations into the International Community School (ICS) and Sandford International School over alleged tax and administrative irregularities.

A tax investigation team from the Ministry of Revenue (MoR) is scrutinizing ICS, often referred to as the “School of America.” This probe places the prestigious institution under intense scrutiny, particularly as it has long held tax-exempt status due to its charitable classification—a situation that seems increasingly questionable given its reputation for charging some of the highest tuition fees in the city. Reports suggest that the investigation is focusing on potential wage tax violations.

Informed sources allege that ICS employs a dual-payment system for its expatriate staff, directing part of their salaries into overseas accounts. This practice has now caught the attention of the MoR, as it may indicate significant tax fraud.

Renowned for serving the children of the elite and expatriate communities, ICS is now under a magnifying glass. As the investigation progresses, the MoR is working alongside other regulatory bodies, with internal documents confirming a thorough inquiry into specific allegations of tax evasion related to these international payments.

This investigation comes amid previous complaints from parents regarding ICS’s policy requiring tuition to be paid exclusively in US dollars—ranging from $11,760 to $36,520 per year—deemed both unfair and impractical.

Parents argue that this policy forces them to resort to the illegal and costly black market to obtain foreign currency, violating Ethiopian financial laws that mandate local transactions be conducted in birr.

Supporting this, ICS’s official Tuition and Fees Guide, effective August 1, 2025, stipulates that payments must be made in USD or equivalent hard currency. The guide details various payment methods, including wire transfers, and explicitly instructs that funds be sent to a TD Bank account in the United States.

Simultaneously, the MoR is pursuing a separate case against Sandford International School. The ministry argues that despite SIS’s charitable registration, it operates as a for-profit entity due to the substantial fees it charges parents. The MoR contends that revenue generated from tuition constitutes taxable income rather than exempt charitable revenue.

Based on the school’s own audited financial statements and expense reports, authorities have issued a tax claim exceeding 129 million Birr for the years 2018-2022, inclusive of profit tax, penalties, and interest.

Sources indicate that a further joint investigation by the Federal Audit Service and Federal Police has now commenced. The government is currently examining the school’s management to seek a lasting resolution to the matter.