The National Bank of Ethiopia (NBE) has officially enacted a comprehensive new directive to regulate the use of franco-valuta—a mechanism allowing the importation of goods using foreign currency sourced outside the domestic banking system. Effective May 21, 2026, the “Franco-Valuta Importation Directive No. FVD/01/2026” aims to facilitate trade and investment without depleting the nation’s official foreign exchange reserves. By replacing Article 8, Sub-Article 8.1.3 of the previous Foreign Exchange Directive (FXD/01/2024), this regulatory shift seeks to modernize the sector and transition operations into a fully digital framework.
Central bank officials stated that the absence of a unified and modern legal framework had previously exposed the franco-valuta system to illicit financial flows, transparency deficits, regulatory fraud, and institutional fragmentation. To address these vulnerabilities, the new directive establishes a uniform legal structure designed to shield the national economy from foreign exchange mismanagement and unfair trade practices. Furthermore, the central bank aims to foster robust inter-institutional coordination and implement a technology-driven monitoring system to oversee all incoming shipments.
The directive clearly defines eligible beneficiaries into specific categories. Authorized users include licensed domestic investors within Special Economic Zones, diaspora investors, foreign investors, and manufacturing enterprises owned by foreign entities. Additionally, traders engaged in Foreign Direct Investment (FDI) and diaspora businesses, strategic development projects, and individuals importing personal effects (excluding vehicles) are permitted. Aid-receiving religious institutions, government offices, civil society organizations, diplomatic missions, and international or regional non-governmental organizations (NGOs) also fall under the eligible scope.
To streamline operations, the central bank has categorized approved franco-valuta applications into two main sectors: investment and commerce. Under investment and manufacturing, permitted items include capital goods, machinery, spare parts, raw materials, technological equipment, software, and inputs for renewable and non-renewable energy projects. Commercially, the directive allows wholesale and retail goods supplied by authorized foreign and diaspora traders, items entering special economic and free trade zones, and specific commercial goods granted special permission by the NBE.
A core feature of the new framework is the implementation of rigorous digital oversight to tighten regulatory control. Under this system, the Ethiopian Customs Commission will work in tandem with the Foreign Exchange Monitoring and Orchestration Unified System (FEMoUS) to digitally register and track every step of the franco-valuta import process. Importers are strictly required to maintain valid business licenses, submit accurate proforma invoices and freight documents—such as Bills of Lading or Air Waybills—and keep detailed, verifiable financial records accessible for future audits.
To ensure compliance, the NBE has outlined strict administrative and legal penalties for violations, which include the misuse of franco-valuta privileges, submitting fraudulent declarations, or attempting to bypass the digital monitoring network. Entities found violating the directive will face financial penalties, product confiscation, and criminal prosecution under the National Bank of Ethiopia Amendment Proclamation No. 1359/2025. Proponents view the digital shift as a crucial step toward stabilizing the economy, while market observers remain focused on how smoothly businesses will adapt to the stringent compliance demands.