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Monthly Regulation Update - Ethiopia

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39 views7 pages

Monthly Regulation Update - Ethiopia

Uploaded by

Surafel girma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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This Month in

Regulation: Ethiopia
Financial and Economic Updates – July 2024

Grant Thornton Ethiopia

2024 | Grant Thornton


www.et.gt.com
1
Ethiopia
Grantthornton.global
The National Bank of Ethiopia Introduces
Ethiopian Foreign Exchange Directive No.
FXD/01/2024

Following the Ethiopian Government’s The Foreign Exchange Directive seeks


recent statement regarding Ethiopia’s to create a robust foreign exchange
economic reform program, the market with clearly defined
National Bank of Ethiopia announced a regulations, roles, and
major revision of the country’s foreign responsibilities. The directive's goal is
exchange (FX) system, effective July to make the market more competitive
29th, 2024. The reform introduces a and transparent in order to
competitive, market-based guarantee effective resource
determination of the exchange rate allocation, draw significant foreign
and addresses a long-standing exchange inflows, and promote
distortion within the Ethiopian increased transparency in foreign
economy. The implementation of the exchange operations. Furthermore,
reform will be guided by a new Foreign the Directive will create a single, all-
Exchange Directive (FXD/01/2024) encompassing framework for foreign
released on the 29th of July 2024. exchange by consolidating several
previous directives.

© Grant Thornton Ethiopia | www.et.gt.com


2024 | © Grant Thornton Ethiopia 2
Licensing of the first securities
exchange in Ethiopia
The Ethiopian Capital Market authority announced a
directive that will enable the licensing of the first securities
exchange in Ethiopia.

This directive enables government and private companies to


utilize the market for selling shares and bonds.

The Board of Directors of the National Bank of Ethiopia has


approved a new directive permitting banks to invest in and
set up subsidiary capital market service providers, such as
investment banks. This strategic move is expected to greatly
strengthen banks' role in developing a vibrant and efficient
capital market ecosystem.

© Grant Thornton Ethiopia | www.et.gt.com


2024 | © Grant Thornton Ethiopia 3
New Directive to provide goods exempt
from Value Added Tax No.1006/2024
FDRE Ministry of Finance (MOF) has published a new directive
,No. 1006/2024 which includes a list of exempt items in
addition to those listed in VAT Proclamation.

The new directive also excludes any items and services that
were previously exempt under prior MOF directives or rulings.
Such goods will now be subject to the usual VAT rate of 15%.

© Grant Thornton Ethiopia | www.et.gt.com


2024 | © Grant Thornton Ethiopia 4
Announcement on
purchase price of gold
The National Bank of Ethiopia announced that, as
of July 29, 2024, it will be purchasing Gold from
suppliers and producers at a rate of the
International Market Pricing converted to Ethiopian
birr - calculated by daily market exchange rate
provided by the National bank itself.

© Grant Thornton Ethiopia | www.et.gt.com


2024 | © Grant Thornton Ethiopia 5
Foreign banks to invest
in Ethiopia
The National Bank of Ethiopia (NBE) is currently in
the process of finalizing a draft banking
proclamation that aims to pave the way for
foreign banks to invest in Ethiopia. This significant
legislative move is expected to reshape the
country’s banking landscape, enhancing
competition and potentially improving financial
services in Ethiopia.

© Grant Thornton Ethiopia | www.et.gt.com


2024 | © Grant Thornton Ethiopia 6
How can
Grant Thornton
assist you?
At Grant Thornton, we offer comprehensive Advisory,
Audit, and Tax services to support private businesses,
foreign investors, public interest entities, NGO’s and
international organizations on their business and
investment interests in Ethiopia.

For further debrief on these new regulations or any other


concerns you have in the business, investment and tax
space, please contact us.

Grant Thornton Advisory


Ethiopia

Grant Thornton Building, 4th Floor


Guinea Conakry Street, Kazanchis
Addis Ababa, Ethiopia

Tel: +251-11 5-53-63-64


Email: [email protected]
Web: www.et.gt.com

© 2024 Grant Thornton Advisory Ethiopia. All rights reserved.


‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context
requires. Grant Thornton Ethiopia is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate
legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for
one another’s acts or omissions. This publication has been prepared only as a guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a
result of any material in this publication.
2024 | © Grant Thornton Ethiopia 7

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