National Bank of Ethiopia warns Middle East war could reverse inflation gains

Ethiopia utilizes only half its export potential, Afrexim Bank report indicates

A new report from Afrexim Bank reveals that Ethiopia is only utilizing half of its export potential. The report suggests that sustained annual growth of 12.2 percent could enable the country to earn nearly USD 20 billion by 2030. It recommends that the Ethiopian government prioritize growing exports in coffee, textiles, leather, and manufacturing. The report commends Ethiopia’s industrial parks initiative as a model for accelerating entry into global value chains and fostering domestic value capture. While only a few African countries, such as South Africa, Angola, Morocco, and Algeria, utilize over 60 percent of their export potential, countries like Egypt and Nigeria are closer to 57 percent. Africa's export earnings are nearly half a trillion dollars below their potential, indicating significant untapped opportunities. The largest export gaps are identified in automotive products, machinery, chemicals, food processing, and communication technology, sectors known for high multiplier effects on employment, productivity, and technological advancement. Despite geopolitical tensions, African economies expanded by 4.2 percent in 2025, up from 3.4 percent in 2024, driven by robust domestic demand, strong export performance, growth in services, and infrastructure investment. However, the continent remains vulnerable due to its over-reliance on commodities. Inflation is projected to moderate to 9.2 percent by 2026 from 16.3 percent in 2025, and public debt is expected to decline. T