The National Bank of Ethiopia (NBE) has officially implemented a new directive authorizing foreign embassies, international organizations, and foreign direct investors (FDIs) to import fuel using their own foreign currency through a “franco-valuta” system. Signed into law last week by State Minister of Finance Eyob Tekalegn, the landmark policy shift is designed to ease the country’s acute foreign exchange shortages and foster macroeconomic stability. Under the strict guidelines of the regulation, the imported petroleum products are exclusively designated for the self-service and internal operations of the authorized institutions, with a rigorous prohibition on any commercial resale. To ensure compliance and prevent black-market diversion, the government has mandated that the entire procurement and distribution process be strictly monitored through a digital tracking system.
This decision effectively dismantles a long-standing state monopoly held by the Ethiopian Petroleum Supply Enterprise (EPSE). For decades, the state-owned enterprise served as the sole entity legally authorized to import petroleum products into the Horn of Africa nation. Because petroleum stands as Ethiopia’s single largest and most expensive import commodity, chronic foreign currency scarcity has frequently strained the EPSE’s capacity, leading to localized fuel shortages and supply chain disruptions across the country.
By allowing diplomatic missions and major international investors to source fuel independently via offshore funds, the new mechanism is expected to safeguard critical international and commercial operations. More importantly, it relieves significant pressure on the central bank’s limited foreign currency reserves, freeing up essential capital for other vital sectors of the economy. The initiative reflects a broader ongoing push by the Ethiopian government to liberalize key economic sectors and introduce market-driven reforms to attract and retain foreign investment.