Ethiopia

Corporate Treasury in: Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Rwanda

Report date: 
8 Jul 2026

Commentary

East Africa is not often in the news – and that is probably a good thing. Kenya and Tanzania are both well known tourist destinations, which also have extensive tea plantations. Together, these provide a relatively steady inflow of hard currency. With Uganda, they compose former British East Africa, which, since its independence in the early 1960s, has generally been relatively stable – Uganda being the occasional exception.

In this call, peers mostly discussed these three countries, but also extended the scope to include the “East African corridor”, including Ethiopia, Mozambique and Rwanda. These countries have seen horrific violence in recent decades, but, with the exception of Ethiopia, their economic outlook is improving. 

Even if business is not booming, East Africa, while challenging for treasury practitioners, is not amongst the world’s most difficult regions. There are no formal exchange controls, though hard currency can occasionally be in short supply, especially in Tanzania, Mozambique and Ethiopia. Peers apply several different business models, some of which involve being paid offshore in euros or US dollars: this does not seem to cause any issues. One peer has a non resident entity in Kenya, which also acts as regional headquarters. One peer had made their Ugandan entity dormant, but still found business there was growing, so they have now re-activated the local entity. 

Another peer has production facilities in Ethiopia, Mozambique and Rwanda, and runs import operations in Kenya, Uganda and Tanzania. They find Rwanda works well for treasury operations, with Ethiopia and Mozambique being more challenging, especially when it comes to sourcing hard currency. 

 

Banking in the region, however, can be more difficult....Please Login / Register to read the rest of this Commentary.

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Topics covered in this report: 
Bank Accounts, Bank Relationships, Cash - deposits, Cash Repatriation, Wallets, PSP, FX, Collections - domestic, Funding, CustomerFinance, connectivity
Service providers discussed in this report: 
Standard Bank, Standard Chartered, ABSA, Stanbic, Ecobank, M-pesa, Commercial Bank of Ethiopia, Afrexim Bank, Access Bank, Vista

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Corporate Treasury & FX in Egypt

Report date: 
29 Oct 2024

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Topics covered in this report: 
Bank Relationships, FX, Hedging FX, Letters of Credit (LC), Customs, Factoring, Cash Repatriation
Service providers discussed in this report: 
Standard Chartered, HSBC, QNB, Citi, SWIFT, Commercial International Bank Egypt

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Treasury & Banking in Ethiopia

Report date: 
22 Mar 2022

Commentary

Ethiopia is a deeply troubled country: it was the site of a major famine in the 1980s, and has a long history of civil and other wars, which have resulted in some former regions now being independent states. It has also had a series of revolutions, and turmoil continues to this day.

In these circumstances, business is – unsurprisingly – difficult, with foreign currency being difficult to access. Despite this, participants generally have successful businesses, with a remarkable consistency in approach and problems:

  • Most businesses provide infrastructure type hardware products. Typically, the hardware is sold outside the country, and paid for in hard currency. Warranty and maintenance services have to be provided onshore and billed in local currency – it is very difficult to remit the profits back to HQ, and trapped cash builds up.
  • The hardware imports are usually covered by LCs – but these can be expensive (up to 11%), and difficult to obtain. It is also not unusual for their settlement to be late, by up to nine months is one case.
  • No international banks operate in the country. This leads to the following issues:
    • The local banks often do not speak English, and have a tendency not to turn up for meetings when they have been arranged.
    • This often results in a need for face to face meetings, which can be challenging, with current travel restrictions
    • There is a need to recruit and maintain local staff to manage the resulting relationships – most treasurers do not like doing this.
    • Most processes are...please sign in to continue reading
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Topics covered in this report: 
Banking, Corporate Treasury, FX, Cash Repatriation, Letters of Credit (LC), Intercompany invoices, Sovereign Bonds
Service providers discussed in this report: 
Mashreq Bank, Nib International Bank, Wegagen Bank, Zemen Bank, Commercial Bank of Ethiopia, Awash Bank, Dashen Bank, Bunna Bank, Behran International Bank

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