Ethiopia’s foreign exchange reserves surged to $6.8 billion in 2025, more than tripling from $2.0 billion in 2023, as a shift to a market-based currency regime, tighter monetary policy, and stronger external inflows transformed the country’s macroeconomic position, according to the African Export-Import Bank’s (Afreximbank) African Trade Report 2026.
Import cover — the number of months a country can finance imports using its reserves — climbed to three months in 2025 from 1.8 months a year earlier, a threshold widely regarded as a minimum buffer for emerging economies. The improvement signals a materially stronger capacity to absorb external shocks.
The gains followed a sharp exchange-rate adjustment. The birr weakened to 138.4 per US dollar in 2025 from 83.1 the previous year after Ethiopian authorities moved towards a more market-based foreign exchange regime. Despite the devaluation, inflation eased considerably, falling to 13.2% from 21.0% in 2024 as the initial price effects of the currency shift moderated and monetary policy remained restrictive.
Ethiopia’s economy expanded by 9.2% in 2025, making it the fastest-growing economy in Eastern Africa and the largest single contributor to the region’s 6.7% growth rate — the strongest of any African sub-region. Afreximbank noted that Ethiopia outpaced Rwanda, Uganda, Tanzania, and Kenya, and helped lift Africa’s overall growth to 4.5% from 3.4% the prior year.
Trade volumes reflected the underlying momentum. Merchandise imports rose 51.6% to $5.36 billion, driven by stronger domestic demand, while exports to African markets climbed 26.1% to $2.13 billion. Imports from the continent increased by 73.4% to $940 million, pointing to deepening integration with regional partners.
Afreximbank identified Ethiopia — alongside Uganda, the Democratic Republic of the Congo, and Zambia — as one of the key drivers of intra-African trade growth. Total intra-African trade rose 5.5% to a record $213.8 billion in 2025.
The report also flagged a structural shift reshaping African trade patterns. Disruptions along the Red Sea-Suez corridor are pushing African economies to strengthen regional supply chains and reduce dependence on long-haul global routes — a dynamic that could deepen Ethiopia’s role as a trade hub given its landlocked position and proximity to Djibouti’s port infrastructure.
At the continental level, Africa’s merchandise trade grew 6.1% to approximately $1.5 trillion in 2025. Afreximbank cautioned, however, that a trade finance gap estimated at $74 billion, alongside infrastructure and industrialisation constraints, continues to limit the continent’s full trade potential
