Israeli Prime Minister Benjamin Netanyahu publicly announced his country’s decision to recognize Somaliland as a sovereign state on Friday, marking a significant diplomatic development for the self-declared republic in the Horn of Africa.

The announcement was made during a telephone conversation between the Israeli Prime Minister and Somaliland President Abdirahman Mohamed Abdullahi (Irro), in which Netanyahu formally conveyed Israel’s recognition of Somaliland.

The Declaration by the State of Israel which is signed by PM Benjamin Netanyahu, reads “Israel respectfully acknowledges the formal appeal conveyed by Somaliland president, requesting recognition. In response this appeal and in light of the shared values, strategic interests and the spirit of mutual respect that binds the two nations, Israel officially recognizes the Republic of Somaliland as sovereign and independent state.”

Full diplomatic relations is declared between Israel and Somaliland, as per the statement, ‘to advance peace, stability, and prosperity in the Horn of Africa, the Middle East and beyond.”

Somaliland president Abdirahman Mohamed Abdillah (Irro) also issued official declaration, “warmly welcoming and deeply appreciating Israel’s recognition.” Further, Irro stated “Somaliland expresses its firm intention to accede to the Abraham Accord, to contribute meaningfully to peace and stability across the Middle East and Africa.”

In the conversation, he said his country officially recognized Somaliland and its right of self-determination.

“Our friendship is historic,” said Netanyahu. “The recognition would be a good opportunity for expanding our partnership and we intend to work with you in economic, agriculture, and social developments.”

The Israeli PM also invited the President of the Republic of Somaliland to Israel.

In a subsequent social media post, Netanyahu stated that the declaration is in the spirit of the Abraham Accords, signed at the initiative of US President Donald Trump.  

The Office of the President of the Republic of Somaliland has issued a statement declaring the move a “historic milestone in Somaliland’s prolonged quest for international legitimacy.” It asserted that the recognition reaffirms Somaliland’s historical, legal, and moral right to sovereign statehood.

The office further announced Somaliland’s firm intention to accede to the Abraham Accords.

“Somaliland reaffirms its commitment to building constructive partnerships, fostering mutual prosperity, and meaningfully contributing to peace and stability across the Middle East and Africa,” reads the statement.

Somaliland intends to establish full diplomatic relations with Israel, according to the statement.

Costantinos Berhutesfa (PhD), a seasoned economic and political analyst, believes Israel’s recognition of Somaliland could trigger a chain reaction, prompting other influential countries to follow suit, including Somaliland’s former colonial power, the United Kingdom.

He cited recent remarks by the British foreign minister, who stated that the United Kingdom should recognize Somaliland as an independent state, noting that such statements signal growing momentum among Western powers.

Costantinos said Israel’s decision was not taken in isolation.

“They are not alone in this decision,” he told The Reporter. “The United States is part of it, because major decisions of this nature are made together.”

According to him, coordinated recognition by Israel and the United States would carry weight within international institutions, influencing deliberations at the United Nations Security Council and potentially within the African Union.

Costantinos predicts Ethiopia’s recognition could come later, as Addis Ababa seeks to preserve the relations it has built with the Somali federal government and avoid actions that could strain those ties.

Meanwhile, Egypt, Somalia, Turkey, and Djibouti are among the countries that have issued statements condemning Israel’s recognition of Somaliland as a sovereign state.

Ankara characterized the decision as “clear interference in Somalia’s internal affairs.”

In a statement issued following a phone call between the foreign ministers of the four countries, the Egyptian government expressed its “full opposition to any unilateral measures that could undermine Somali sovereignty or destabilize the country.”

However, Costantinos argues the recognition of Somaliland will not undermine stability in the Horn of Africa, noting that the territory has remained stable for more than three decades.

“We have to be intellectually honest about Somaliland,” he said. “For over three decades, it has maintained a level of internal stability that many recognized states envy. It has a functioning democracy and political stability. The delay in recognition has been about who takes the first step, not about bad intentions.”

A political expert spoke to The Reporter requesting anonymity, also shares Costantinos’s view that Israel’s recognition of Somaliland could encourage other countries to take similar steps.

He said it remains too early to draw firm conclusions, as the situation is still evolving, but noted that such political decisions are inherently “contagious.”

“Once a door is opened in situations like this, it is only a matter of time before others follow,” he said, adding that Somaliland’s case had long been delayed over questions of which country would make the first move.

The expert said Israel’s decision has the backing of the United States, noting that officials from the US Embassy and its delegations made an official visit to Hargeisa on the same day to assess Somaliland’s diplomatic capacity.

“Who comes next will depend on time,” he said, adding that Israel’s move may also be aimed at countering the influence of Turkey and Egypt in the region.

He said recognition of Somaliland could act as a trigger for the revival of the memorandum of understanding (MoU) Ethiopia signed with Somaliland.

While stating that Israel would not pose a threat to Ethiopia’s sovereignty, the expert said Somaliland’s recognition would benefit Ethiopia in several respects.

Costantinos also said Ethiopia’s political tensions with Asmara could ease following recognition of Hargeisa, arguing that it would open additional opportunities for Addis Ababa.

“Israel’s move will directly affect Egypt’s interests and could also reduce the significance of the Assab issue with Eritrea by offering Ethiopia a better alternative,” he told The Reporter.

The case was brought forward by Human Rights First Ethiopia, a local civil society organization, which is seeking court orders compelling the defendants to ensure the safe return, security, and sustainable reintegration of internally displaced persons (IDPs).

In its petition, submitted to the Federal High Court, the civil society organization asked the court to order the defendants to facilitate the safe and voluntary return of displaced persons to their places of origin, establish conditions that guarantee security and protection for returnees, take concrete measures to ensure the practical implementation of return processes and ensure that returnees recover their homes and receive sustainable resettlement support.

The lawsuit argues that the rights violations stem from the defendants’ failure to fulfill their constitutional and international obligations.

According to the case file, following the outbreak of war in the Tigray region on December 3, 2020, citizens of Tigrayan origin were displaced from Western Tigray Zone and Shehet Woreda of the Afar Region.

The petition states that more than one million people remain unable to return to their homes and are currently living in temporary shelters and host communities in locations including Shiraro, Shire, Axum, Adwa, Tembien, Adigrat, Mekelle, and other areas across Tigray.

The plaintiff further reported that nearly 520,000 IDPs from Oromia are sheltering in Debre Birhan city and the North Wollo Zone of the Amhara region. It also states that more than 84,000 IDPs within Oromia remain displaced in temporary shelters or host communities within the region itself.

The organization said many displaced people are living in overcrowded shelters, schools, and open spaces, without adequate food, water, sanitation, shelter, or health services, exposing them to severe hunger, poverty, and psychological distress.

The case file also cites various constitutional and international obligations the defendants are obligated to fulfill, including the African Union Kampala Convention, ratified by Ethiopia in 2009, and formally approved by Parliament in February 2020.

According to the filing, all defendants are legally bound to implement the Convention’s provisions, which require them to ensure the voluntary return of IDPs, provide adequate security, and facilitate reintegration assistance.

The lawsuit alleges that the Amhara regional government, which currently administers areas from which Western Tigray IDPs were displaced, has prevented their return in violation of the Constitution, which guarantees freedom of movement and residence. The petition claims this has subjected displaced citizens to years of suffering and hardship.

It further argues that the Tigray Interim Administration, under the Pretoria Peace Agreement, is obligated to work with federal authorities to prioritize the return of displaced persons. However, the organization alleges that political considerations were prioritized over humanitarian responsibilities.

Similarly, the Oromia Regional Government is accused of failing to facilitate the return and resettlement of displaced persons, both those displaced from the region and those internally displaced within Oromia, despite constitutional and legal obligations.

The case was presented to the Federal High Court this week, and the bench has scheduled a hearing for January 2, 2026, where judges will rule on whether the defendants are required to formally respond to the claims raised in the lawsuit, The Reporter learnt.

In an interview with The Reporter in May 2025, Tesfalem Berhe, director of Human Rights First Ethiopia, stated that the organization was finalizing preparations to file a court case against the government over the plight of internally displaced persons.

Dalliance in the approval of gene editing projects is delaying research and arresting desperately needed improvements in agricultural productivity, say experts at the Ethiopian Institute of Agricultural Research (EIAR).

Ethiopia adopted a guideline on the regulation of genome-edited products nearly six months ago, permitting research and active gene editing for the first time in the country’s history, adding to legislation that opened the door to genetically modified organisms a decade ago.

Research institutions and investors have been awaiting approval to embark on gene editing projects, but it has yet to transpire.

“Following the ratification of the guideline, specific approval letters have to be issued by the Ethiopian Environmental Protection Authority (EPA). We have been awaiting approval letters from the Authority to embark on a number of gene editing projects that are very crucial for Ethiopia’s agriculture. But the Authority is taking time for some unknown reason,” said one EIAR expert who spoke to The Reporter on condition of anonymity.

The EPA is the authority charged with regulating biosafety and genome editing. Its tasks include granting permits, conducting risk assessments, and overseeing compliance. On the other hand, the Bio and Emerging Technology Institute (BETin) supports policy, coordination, and public communication.

A National Biosafety Advisory Committee consisting of representatives from various ministries, the Customs Commission, universities, and research centers (all appointed by the Prime Minister) is also involved in regulation.

EIAR and universities play central roles in R&D and capacity building, while the Ethiopian Food and Drug Authority (EFDA) is relevant for safety assessments.

A director at EIAR confirmed the wait for approval, and noted that Ethiopia is signatory to the Convention on Biological Diversity (CBD) and the Cartagena Protocol, which regulate GMO-related activity worldwide.

“So far, we have been working on genetic engineering, because Ethiopia’s laws allow that. A guideline that allows gene editing has been introduced, but the guideline is not enough. Approval and go-ahead is required to start activity. We are awaiting it from the Ethiopian Environmental Protection Authority. We will also have a new facility for gene editing once it is approved,” said another director at EIAR.

One gene editing project involving teff has already yielded results, but cannot be implemented on a larger scale for lack of approval from more senior authorities.

The director explained the thinking behind the gene editing project.

“When teff bears more seeds, the plant gets heavy and its stem can no longer support it. Teff is thin and long, meaning it can fall over even during light wind. Hence, a short but strong-statured variety of teff is important. Using gene editing, the gene that gives teff its height was removed, and a field test is being finalized in Bishoftu,” he told The Reporter.

A recent report from the African Union Development Agency (AUDA-NEPAD) highlighted Ethiopia’s nascent venture into gene editing.

“Genome editing in Ethiopia is moving from policy design to early implementation. Momentum increased in 2023-2024 with the acceleration of teff Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) collaborations, supported by external regulatory experiences that clarified non-transgenic pathways and informed Ethiopia’s domestic approach. Culminating in 2025, Ethiopia officially published its Guideline on the Regulation of Genome-Edited Products, which is now being applied in dossier scoping and preparing the ground for the country’s first confined field trials of gene-edited crops,” reads the report.

The guideline introduces a risk-proportionate, case-by-case pathway for evaluating gene-edited organisms distinct from transgenic GMOs, according to the AU agency.

The report details that a number of private companies have expressed interest in investing in genome editing. The list includes MIDROC Investment Group, Luna Group (owner of the Fresh Corner grocery chain), Corteva Agriscience (a US-based agri-tech giant), and BASF (Germany).

These companies want to partner with EIAR to invest and commercialize gene-edited biotech seed varieties and supply them to farmers. However, absence of gene edited products so far remains a challenge, states the report.

Funding for genome editing projects is also another challenge, according to the AU document.

It details that Ethiopia has three ongoing gene editing projects involving teff, Ethiopian mustard, and sorghum. These are being funded by SIDA, Corteva, Feed the Future, and the Donald Danforth Plant Science Center.

Enset, cotton, and coffee are also included in plans for future gene editing projects, according to the report. 

A ‘Bioeconomy Strategy’ approved by the Bio and Emerging Technology Research Institute (BETin) and the Ministry of Innovation and Technology aims to commercialize at least one genome-edited plant variety every year starting from 2028.

Sources close to the issue claim the government is undertaking gene-editing projects without official approval to avoid opposition related to GMOs and gene editing, particularly from conservative stakeholders.

Officials of the EPA did not respond to The Reporter’s requests for comment.

A lobby group representing soap and detergent manufacturers says forex-related issues burdening a foreign-owned supplier of essential chemical inputs have forced production cuts and closures, warning of higher prices for consumers.

The managers of the Ethiopian Chemical Products Manufacturers Association (ECPMA), which represents basic chemicals, soap and detergent, and paint and adhesive factories, say their pleas for government intervention have gone unanswered for months.

An assessment conducted by The Reporter found that countless small-scale soap and detergent manufacturers, as well as large factories like Repi Soap and Detergent PLC, have been forced to shrink their output as they struggle to access key raw materials.

Assessments conducted by a team of experts at the Chemical and Construction Inputs Industry Research and Development Center Ministry of Industry also confirm that a number of soap and detergent factories have been forced to shut down production lines and cut back employee work hours.

The chemicals in short supply are linear alkyl benzene sulphonic acid (LABSA) and sodium lauryl ether sulfate (SLES) —both crucial components in the production of bar soap, powder soap, liquid soap as well as shampoos, body washes, dishwashing liquids, and detergents. 

Allied Chemicals, a firm established in 2008 with backing from Indian investors, is the primary importer of SLES and LABSA in Ethiopia. The firm processes the imported chemicals at one of several plants it operates in the country before supplying them to soap and detergent manufacturers. 

Manufacturers say the chemicals have been unavailable for months.

“For several past months, Allied stopped supplying these inputs. Since July, we’ve been tabling the problem to the Ministry of Industry, but there’s still no solution. Meanwhile, factories are closing their production lines,” a manager at a detergent production plant told The Reporter.

A manager at Allied who spoke to The Reporter anonymously confirmed the firm faced supply issues between September and last month in light of forex shortages, but contends things are now back to normal.

“Our supply stopped for a brief time due to forex shortages. But we didn’t interrupt distribution as we had adequate stock. Our factories are back in operation now. Challenges like forex shortages happen sometimes. It’s normal,” said the manager.

However, he also claimed this interruption in supply was the first since Allied began processing SLES and LABSA a decade ago.

“We have 300 employees at our factories, we are paying them salaries. Why would we stop supply, seeing as it is our own business and benefit? The benefit of the business is not only for the factories but also for us. We also don’t want interruptions and we are sure it won’t occur again,” he told The Reporter.

The manager argues that fluctuations in supply emanate from the soap and detergent factories themselves.

“They never send us their projected annual demand for SLES and LABSA, so we can’t precisely allocate the forex needed to import the raw materials,” he said.

Allied supplies manufacturers with up to 30,000 tons of LABSA and around half as much SLES each year.

“There’s a shift in the domestic market from bar and powdered soap towards liquid soap. So it’s difficult for us to know which raw material is in greater demand unless factories tell us,” said the manager.

The Ministry of Industry’s report says otherwise.

Over a 16-month period, Allied provided 12,888 tons of LABSA. More than two-thirds of the total volume was supplied to four major detergent companies: Zac, Bekas, Unilever, and Repi. Large manufacturers accounted for the lion’s share of 6,300 tons of SLES supplied by Allied as well.

The report concludes that Allied does not possess the production capacity to meet growing demand from manufacturers.

The total installed capacity of Ethiopia’s soap and detergent factories stands at over 535,000 tons. The report indicates they need at least 80,000 tons of SLES, much higher than the 57,000 tons Allied has the capacity to supply, according to Ministry documents obtained by The Reporter.

In reality, Allied is covering just half of demand from manufacturers.

“Factories manufacturing liquid, powder and bar detergents, have huge manufacturing capacity. However, due to lack of raw material supply, inadequate forex supply to import the inputs, inadequate working capital, security issues, local market fluctuations and growing cost of living; they are unable to manufacture at full capacity. The raw material supply from Allied Chemical is covering only half of their demand,” reads the Ministry’s report.

It indicates that while detergent industries’ demand for SLES and LABSA has been surging substantially, Allied’s supply has remained stagnant for two years. The report also showcases fluctuations in the supply of SLES and LABSA in the months since July 2025.

Allied also managed to generate USD 1.2 million in recent months through the export of SLES and LABSA, according to official documents.

However, the lobby group contends the problem goes deeper than forex shortages and production capacity.

Allied is the beneficiary of an exemption from the 15 percent duty levied on the commercial import of SLES and LABSA. Other importers are not exempted, giving Allied what the lobby group describes as an unfair advantage that has allowed it to corner the market.

“The duty free policy is designed to serve only one supplier. It was designed to serve Allied, not the sector. As a result, the whole sector is on the verge of collapse because one company stopped supplying inputs,” said a senior member of ECPMA, which represents more than two dozen large-scale manufacturers.

He alleges Allied is using its superior bargaining power unfairly.

“Allied typically collects payments upfront before supplying the SLES and LABSA. It takes 50 million or 100 million Birr in upfront payments and holds on to the money before eventually supplying the inputs after five or six months. Several factories have their capital tied up before they even get the inputs,” said the senior Association member.

Because other importers do not enjoy the same duty-free privileges that Allied does, buying SLES or LABSA from them carries a 15-percent markup.

“Then soap and detergent companies have to add 15 percent to the price when they sell their products to the public,” said one plant manager.

The lobby group wants to see an immediate solution to the problems.

Melaku Alebel, minister of Industry, convened industry players to discuss their misgivings and review a study on the problems plaguing the sector.

Manufacturers called on the Minister to push Allied to resume imports, and requested that the company’s duty-free privileges be removed. Melaku promised to table the issue to the Ministry of Finance and get back to them with a solution swiftly, but that has yet to happen, according to people who took part in the meeting.

“If importers were also allowed to import the inputs duty-free like Allied, supply could have been secured and the problem would have been solved,” said one industry executive. “The solution is to grant the privilege to all importers so that the policy works for the sector rather than a single company.”

Industry players say the situation has left them in a state of indecision.

“Factories now have to decide whether they should await a solution or buy the inputs from commercial importers with the 15 percent markup,” said one plant manager. “If we buy from the commercial importers, then we have to add the cost to our products, which would affect end consumers. If we keep waiting for Allied to resume imports, we may be forced to close our factories.”

Ethiopia imported soap and polish valued at seven billion Birr in 2024/5, up from five billion in the previous year, according to data from the National Bank of Ethiopia (NBE). Import volumes have also surged in recent years, nearly doubling to 110,000 metric tons since 2022.

A substantial volume of soap and detergent was imported through the franco valuta scheme, according to the NBE.

While Ethiopia sources most of its SLES and LABSA from suppliers in the UAE, Egypt, Turkey, India, or China, suppliers in many of these countries rely heavily on manufacturers in Iran, whose operations have been affected by Tehran’s feud with Israel and the US, industry insiders say.

“The remaining options are India and China. Importing from China can take up to four months. We hope other countries might resume manufacturing the ingredients after January,” said an Association member.

Importing a ton of these chemicals can cost up to USD 3,000.

“SLES and LABSA are dollar-intensive. The NBE says there is no forex problem, but banks do not allocate when importers ask for more,” said one manager.

Experts at the Industry Ministry recommend that soap and detergent manufacturers be allowed to import their own SLES and LABSA at a reduced import duty of five percent as a short-term solution. They urged the manufacturers be granted priority in forex allocation and called for the establishment of a ‘LABSA-SLES Taskforce’ to oversee Allied Chemicals’ import and distribution process.

However, the experts cautioned that Ethiopia can not afford to depend on imported SLES and LABSA. They see attracting able investors to enable the domestic production of these materials as the only sustainable way forward.

“The shortage of SLES and LABSA emanates mainly from deep-rooted problems of forex shortage, distorted tariff systems, and dependency on imported raw materials. To solve these issues permanently, introducing strategic intervention and ensuring sustainable value chain supply for the sector, and attracting domestic investors in the domestication of the raw materials is critical,” reads the report.

Ethiopian authorities have signed a memorandum of understanding (MoU) for a USD 1.5 billion public health cooperation program with the US government, allaying deep concerns that have weighed on the health sector since Washington’s earlier decision to fold the US Agency for International Development (USAID).

The “co-investment plan” will see the US provide up to USD 1.01 billion to priority health programs over the next five years, while Mekdes Daba (MD) and Ahmed Shide, ministers of Health and Finance, respectively, have committed to a USD 450 million (approximately 70 billion Birr) increase in Ethiopia’s own health spending, according to a statement issued by the US embassy in Addis Ababa earlier today.

“This is a new dawn for Ethiopia’s leadership in shaping Ethiopia’s own health system to become more resilient, more responsive, and sustainable for today and for tomorrow,” it quotes US Ambassador Ervin Massinga as saying. “Today’s MOU opens a new five-year chapter, one defined by shared responsibility, transparency, and a clear expectation that Ethiopia will drive its own future by mobilizing resources and sustaining health gains for generations to come.”

The Health Minister has indicated the funding will be directed toward combating HIV/AIDS, tuberculosis, and malaria, and improving medicine supply, maternal and child health, and epidemic preparedness.

Although not legally binding, the MoU offers a sense of relief to health professionals and aid workers in Ethiopia who find themselves in a state of uncertainty and unease following the Trump administration’s decision to shut down USAID earlier this year.

The embassy’s statement cites the US has provided Ethiopia with more than USD five billion in aid over the past two decades, much of which came through USAID. The decision to fold the agency hit the health sector especially hard.

In February, the Health Ministry ordered regional and city administrations to suspend all operations and payments funded through financial support from the US Centers for Disease Control and Prevention (CDC) and USAID.

More than 5,000 people lost their jobs as a result, many of whom were involved in various HIV-response programs, according to a United Nations Programme on HIV/AIDS (UNAIDS) report which also cautioned that the funding cuts had the potential to undo years of progress in fighting diseases like HIV, malaria, and tuberculosis, as well as in improving maternal and child health.

In today’s statement, the Finance Minister highlighted Ethiopia’s commitment to raising its health spending by USD 450 million as an indicator of “intent to increase domestic financing and ensure the long-term sustainability of the health sector beyond external support.”

Ethiopia’s health spending has been on a decline over the past few years. In 2020/21, at the height of the COVID-19 pandemic, health and nutrition accounted for a little over 10 percent of the total federal spending budget. This year, the figure sits at 7.3 percent.

While the MoU signals an intent to reverse health spending cuts, US officials caution the volume of funding under the partnership will depend on performance.

“Performance incentives embedded in the agreement will drive results and accountability. If key health outcomes are not achieved, funding will decrease accordingly. This approach aligns resources with impact, ensuring that every dollar spent delivers measurable benefits for both countries,” reads the embassy’s statement.

Data and record-keeping are also an integral part of the agreement, which itself is part of the Trump administration’s ‘America First Global Health Strategy,’ according to the statement.

“The MOU’s focus on scaling up electronic health records and data systems will empower Ethiopia to track and respond to health threats with greater speed and precision,” it reads.

Intense unrest in the Gambella Regional State over the past couple of weeks has claimed dozens of lives as the region struggles with rising ethnic tensions and a fresh influx of South Sudanese refugees seeking shelter from violence in already overcrowded camps.

Eyewitnesses, local officials, humanitarian workers, and investors in Gambella who spoke to The Reporter over the past week allege a far-reaching web of corruption preying on humanitarian aid meant for refugees is implicated in the violence that has gripped the region.

Sources say the unrest began two weeks ago, following the closure of roads connecting the regional capital—the town of Gambella—to several surrounding woredas. Early this week, a manager of Commercial Bank of Ethiopia (CBE) branch in the area, who was reportedly a member of the Nuer ethnic group, was killed, according to the sources.

This was followed by the killing of a Gambella police commander, who was reportedly a member of the Annuak ethnic group.

Sources say these events eventually led to the widespread violence that had claimed close to 100 lives as of Friday, December 19. Towns like Akedo and Abol have been razed, while areas like Lare, Itang, and Gambella town have also been affected, according to reports. Gunfire was heard in several areas, according to sources.

Gatluak Ruon (PhD), deputy head of the regional administration, said the unnamed attackers targeted ambulances and government vehicles during the first days of the violence, killing at least five people.

Regional president Alemitu Umod declined to provide further details when The Reporter contacted her for comment on Friday. However, the president confirmed to local media that the regional government is working with the federal government to ensure peace and the Ethiopian National Defense Force (ENDF) has deployed troops in the region to contain the conflict.

The Gambella Police Commission has also issued statements confirming that regional security forces and the Federal Police Commission are working with the ENDF to bring the perpetrators to justice.

Despite making allusions to a hidden hand orchestrating the unrest in the region, both Alemitu and Gatluak refrained from naming the actual perpetrators while speaking to BBC and local media over the week.

Officials also say that opposition political figures in Gambella have an understanding with the government and are strictly engaged in peaceful politics.

This month’s unrest is not the first incident of its kind in the region, whose security issues stretch back decades and have roots in Juba, Addis Ababa, and Gambella itself.

In recent years, unrest in the region has been linked to tensions between residents and its large refugee population.

Data from UNHCR indicates there are over 483,000 South Sudanese refugees in Ethiopia, comprising nearly half of the one million refugees estimated to be living in the country. The vast majority of South Sudanese refugees, close to 450,000, reside in around half a dozen camps in Gambella.

The camps have long been at capacity, but renewed tensions in South Sudan have caused many more to flee to Gambella for safety over the past year.

In October, the UN Commission on Human Rights in South Sudan cautioned that armed clashes, political detentions, and human rights violations in the country have skyrocketed in recent months.

The violence began to escalate in March, when the government of President Salva Kiir arrested Vice President Riek Machar.

Machar was taken into custody on suspicion of working with the White Army, a militant organization tied to the Nuer ethnic group. At the time, Machar’s Sudan People’s Liberation Movement-in-Opposition (SPLM-IO) party denied ongoing links with the militia, which it fought alongside during the civil war that had engulfed South Sudan for years following its independence in 2011.

Machar and several other individuals have since been accused of treason, crimes against humanity, terrorism, mass murder, and destruction of property, and a criminal trial is ongoing.

In October, Benjamin Bol Mel, another of South Sudan’s five vice presidents, was taken into military custody under direct orders from the office of President Salva Kiir, heightening fears that the country is slipping back into a state of civil war.

While the armed conflict is concentrated in Upper Nile State and Jonglei State, there are pockets of fighting in other parts of the country, triggering population movements both within South Sudan and across its borders.

The UN estimates at least 370,000 South Sudanese civilians have been displaced by violence since March, with many more fleeing to neighboring countries including Ethiopia.

In April, local officials in Gambella, which shares a long border with South Sudan, told The Reporter they were struggling to cope with the influx of refugees fleeing violence and air strikes.

Reports indicate that at least 50,000 South Sudanese refugees have crossed into Gambella in the months following Machar’s arrest.

They add to the estimated 430,000 South Sudanese refugees already sheltered in the region at a time when funding constraints are forcing humanitarian organizations like the World Food Program (WFP), the sole humanitarian assistance provider for over 1.1 million refugees and millions of IDPs in Ethiopia, to scale back aid programs.

Two months ago, WFP officials announced their decision to cut rations for more than 780,000 refugees in camps across Ethiopia to less than 1,000 calories a day in response to funding shortfalls.

It is against this backdrop that unrest and violence have erupted in Gambella in recent weeks.

Sources say the ethnic tensions in the region often involve refugees.

“Local residents in Gambella fear their land will be taken over by refugees. Ethnic groups point fingers at one another, each accusing the other of purposely hosting more refugees belonging to their own ethnicity. Dominating in numbers often means dominating resources,” said a humanitarian expert with experience working in Gambella.

Officials and humanitarian workers who spoke to The Reporter on condition of anonymity claim that members of armed groups operating in South Sudan are also entering Gambella disguised as refugees. These armed groups include SPLM-IO and the White Army members, sources told The Reporter.

Security concerns notwithstanding, the influx of refugees poses a serious burden for Gambella, which was already buckling under the strain of its large refugee population.

A UNHCR report indicates that 994 upgradable emergency shelters have been built to accommodate new refugees in the region, while an additional 611 shelters are underway.

A joint border monitoring mission, conducted by regional authorities and humanitarian partners, found over 800 makeshift shelters along the Baro River, accommodating an estimated 8,000 individuals in congested and precarious conditions, reveals the report.

It notes that new arrivals were and are being hosted by local communities, but many remain exposed to harsh weather, the risk of cholera, and face serious protection risks.

UNHCR warns that without a political resolution in South Sudan, increased cross-border movement remains very likely. The agency says it is conducting border monitoring to “uphold the civilian character of asylum and prevent the infiltration of armed elements.”

Meanwhile, sources in the region allege the cycle of unrest and violence in Gambella is due in part to a network of corrupt government officials and humanitarian organizations, who benefit by diverting aid resources.

“The reason the refugee crisis and ethnic conflict in Gambella has gone without resolution is because the officials benefit greatly from it. There exists a large and influential network composed of regional and federal officials, and international organizations working in Ethiopia that is involved in diverting aid. Flour, cooking oil, and other resources and materials are siphoned off into commercial markets. A huge amount of resources are embezzled by the officials but nobody, including security forces, dares to intervene because there are real heavyweights behind it,” a well-placed source told The Reporter.

The unrest in Gambella also raises concerns about Ethiopia’s new refugee policy.

The Makatet Roadmap, which translates to ‘inclusion’, was introduced earlier this year as Ethiopia’s country refugee response plan (CRRP) by experts at the Ethiopian Refugees and Returnees Services (RRS) and UNHCR.

Makatet forwards a number of initiatives designed to integrate refugees in Ethiopia, mainly in Gambella but also slated for implementation in Somali, Amhara, and others, to assimilate into local host communities and Ethiopia’s national development programs.

However, its critics argue the plan fails to consider the will of local host communities and argue that refugees should return to their country of origin when the situation allows.

A growing trend of adulteration in the National Bank of Ethiopia’s (NBE) gold supply has prompted regulators to swap out outdated methods for measuring the purity of bullion for new, more reliable technology.

The central bank is the sole entity authorized to buy gold from miners and export the mineral. A massive increase in the volume of gold being supplied to the NBE, particularly from the Tigray Regional State, coupled with record global gold prices have filled the central bank’s coffers over the past couple of years.

However, sources in the industry say adulterated gold has become increasingly common in recent months, threatening the NBE’s supply. They claim most of the adulterated gold in the market originates in Tigray, where the NBE operates a purchasing center in the town of Shire.

To date, the central bank utilized outdated densitometric analysis to determine the purity of gold by measuring its density or by using fire assays, which can be slow, unreliable, or pose risks in the form of toxic fumes.

However, increasingly common adulteration has pushed the NBE to procure spectrometers which utilize X-ray fluorescence (XRF) technology to determine quality and molecular composition with far greater accuracy.

In addition to impurities like copper, the machinery can detect traces of substances like hazardous chemicals that may have been used during the mining process.

The NBE reports it has received nearly 19 tons of gold from its Shire outpost over the first five months of the fiscal year. The figure is the highest on record and is especially striking considering that supply from Tigray was cut off during the northern war.

Still, a portion of volume, according to inside sources, has turned out not to have been gold at all. They say the adulteration problem has impeded Shire’s booming gold trade

“Even large scale gold suppliers from Tigray have recently been implicated in [adulteration]. These large scale suppliers have for years been licensed to collect small volumes of gold from artisanal miners and supply it to NBE. Recently, the NBE accused them of supplying adulterated gold. They use special imported chemicals that make it difficult to tell [the adulterated bullion] from gold. When NBE found out, it froze payments to several suppliers over the past months. As a result, many suppliers in Tigray are awaiting payment despite already supplying gold,” a source close to the issue told The Reporter, speaking anonymously.

Regulators refrained from commenting on issues related to adulteration, large-scale gold mining, or gold smuggling when approached by The Reporter.

During the 2024/5 fiscal year, the central bank received 39 tons of gold—the vast majority from small-scale miners—and generated a record USD 3.5 billion from exports.

The NBE offers a 15 percent premium on bullion and recently opened 10 new gold purchasing centers tied to Commercial Bank of Ethiopia (CBE) branches across the country.

Gold exports accounted for more than a tenth of the country’s total forex revenues last year, which grew to USD 33 billion from 24 billion in 2023/4.

The central bank’s latest report indicates its forex reserves can cover 2.8 months of imports, more than three times the value reported in June 2024. The document also reveals a massive drop in current account deficits, which are down to USD 60 million from USD 6.2 billion the previous year.

“The near elimination of the current account deficit is a monumental shift. This was likely fueled by export incentives, improved forex retention rules, and a formalization of gold exports. Reserves at 2.8 months of import cover, while improved, still sit below the recommended 3-month benchmark,” reads the document.

The report indicates the official exchange rate depreciated by more than 136 percent since last year and says an 85 percentage point drop in the parallel market spread since the liberalization in July 2024 indicates “successful currency unification.”

Zenith’s executives, including the bank’s president and board chairperson, visited Addis Ababa this week for talks with central bank chief Eyob Tekalign (PhD) and officials at the Ethiopian Investment Commission (EIC).

Zinabu Yirga, deputy head of the Commission, stated that Ethiopia is ready to welcome reliable and giant international financial institutions, noting that Ethiopia being the third-largest economy in Sub-Saharan Africa, the expansion of trade relations with other countries, and the existence of grand infrastructure and industrial projects have created a favorable environment to conduct long-term financial sector investment.

Zenith’s head of international market expansion, Olukayode Akinbinu, stated that Zenith Bank has a strong desire to invest in the country’s financial market by utilizing the opportunities created by Ethiopia’s rapidly growing economy, recent sectoral reforms, and the liberalization of banking and financial services.

He added that the bank is currently evaluating investment opportunities in Ethiopia by focusing on digital and technology-based financial solutions as well as financing large government-led projects.

Zenith Bank is headquartered in Lagos, Nigeria, and is a sizable financial institution operating through branches and representative offices in Africa and key international financial centers, providing corporate, retail, digital, and infrastructure financial services.

Zenith is the latest African bank to express interest in the Ethiopian market.

In June, sources at the National Bank of Ethiopia (NBE) hinted that Kenya’s KCB Group Limited will be the first foreign banking institution to join the Ethiopian financial sector under the government’s liberalization drive.

The Banking Business Proclamation amended by lawmakers in November 2024 permits foreign banks to enter in one of four ways. They can incorporate a subsidiary in Ethiopia, buy stakes in a domestic bank, establish a local branch office, or open a representative or liaison office. The law caps foreign investment in a bank at 40 percent ownership, while a domestic bank cannot sell more than 49 percent of its authorized shares to foreign investors.

Led by Tigray Interim Administration (TIA) president Lt. General Tadesse Worede, regional officials traveled to Addis Ababa this week for discussions with their federal counterparts. Talks with CBE executives were on the schedule for Friday.

Tadesse reportedly urged the bank to invest in sectors like construction to reduce the region’s high unemployment rate. Tadesse and his deputy, Amanuel Assefa, also requested CBE to provide loans for more than 60,000 people seeking housing in Tigray, according to a statement issued by the bank.

The request came a few days after the federal government notified commercial banks about the lifting of an embargo that had been placed on companies under the Endowment Fund for the Rehabilitation of Tigray (EFFORT) during the two-year war.

The conglomerate had been the subject of an intense power struggle between Tigray’s political elite, with the TPLF faction led by Chairman Debretsion Gebremichael on one side and former TIA chief Getachew Reda on the other.

The TPLF has reportedly been attempting to replace EFFORT’s board and management team with loyal supporters since Tadesse replaced Getachew at the helm earlier this year. However, the opposing side, which includes former EFFORT CEO Beyene Mikru, managed to secure a court order to stop TPLF’s intentions for a reshuffle.

As TPLF moved to have the decision repealed, Getachew and his allies managed to secure a freeze on all accounts tied to nearly two dozen subsidiaries under the EFFORT conglomerate.

TPLF leaders and TIA officials have decried the freeze as severely impacting Tigray’s post-conflict recovery efforts. TPLF also has been using the situation as a political instrument to amplify tensions between Tigray and the federal government.

However, this week, as the TIA delegation headed by Tadesse arrived in Addis Ababa, the federal government lifted the injunction on EFFORT bank accounts.

A letter addressed to commercial banks from the Ministry of Justice states that the freeze on the bank accounts of 22 companies including Sur Construction has been lifted.

An official close to the matter expressed hope that the development will help ease tensions.

“The lifting of the ban is also good as several people in Tigray, including Dedebit MFI clients, can now access their accounts. Yet, the board and management of the conglomerate is still on the side of Getachew’s group,” the official told The Reporter.

Ephrem Mekuria, CBE vice president, told Tadesse’s team that the bank has been contributing to Tigray’s reconstruction in terms of rebuilding schools, health facilities and others, and will continue investing in the region.

Other topics the TIA delegation discussed with the federal government were not made public.

The government has instructed the central bank and the Information Network Security Administration (INSA) to establish a new joint cybersecurity and fraud department in a bid to patch vulnerabilities in Ethiopia’s fast-growing digital payment system.

A national financial cybersecurity framework is also reportedly in the works, with the National Bank of Ethiopia (NBE) and INSA expected to deliver within the coming year,

The country’s cybersecurity challenges took center stage at the launch of the second National Digital Payment Strategy this week.

“A major vulnerability in Ethiopia’s digital payments ecosystem is the lack of a coordinated, sector-wide cybersecurity and threat intelligence mechanism. At present, information on cyber incidents—including phishing campaigns, ransomware, malware, distributed denial-of-service (DDoS) attacks, insider threats, and sophisticated fraud typologies—remains fragmented within individual institutions.This siloed approach prevents collective defence, leaving the ecosystem exposed to repeated exploitation of the same vulnerabilities across banks, MFIs, PIIs, PSOs, and telecom operators,” reads the document.

It outlines plans to establish a ‘Shared National Cybersecurity and Threat Intelligence System within the NBE, which officials envision functioning as a secure, centralized hub for real-time intelligence exchange.

The document notes the absence of a unified, sector-specific cybersecurity framework creates inconsistent security standards across the financial ecosystem, leaving institutions vulnerable to an increasingly sophisticated threat landscape.

It proposes the establishment of a new National Payment System Council as the highest governing body for the strategy, providing executive-level support and mandate for its implementation. The council will be chaired by the NBE governor and include representatives from financial lobby groups such as the Ethiopian Bankers Association, according to the document.

It describes the establishment of a dedicated cybersecurity and fraud directorate within the NBE as crucial for dealing with the increasing sophistication and volume of cyber threats and financial fraud.

“Without a dedicated supervisory body, responsibility for managing these complex risks can become fragmented, hindering the development of a unified and proactive security posture for the nation’s financial system,” it reads.

The document’s authors foresee the directorate serving as the financial sector’s focal point for risk monitoring and incident response in partnership with security agencies such as INSA and the Financial Intelligence Service (FIS).

The document notes that at present, coordinating an effective response becomes complex and slow when fraudulent transactions cross between different financial service providers.

“Individual institutions lack visibility into the full, end-to-end transaction chain, which can delay resolution for consumers. Establishing a shared cybersecurity and fraud desk at the national switch operator addresses this operational gap,” it reads.

Two months ago, EthSwitch, the national switch operator, announced that person-to-person (P2P) transactions had surpassed ATM cash withdrawals for the first time.

The company reported processing more than 128 million interoperable P2P transactions, which include account-to-account and wallet-to-account transfers, valued at nearly 578 billion Birr over the year, highlighting Ethiopia’s rapid adoption of digital payments.

“Positioned at the heart of the payment system, switches have a unique view of interoperable transactions. A dedicated desk at this level can therefore act as a neutral and central coordination point for incident management,” reads the strategy document.

It calls for a National Financial Sector Cybersecurity Framework, which officials hope will harmonize existing directives into a single, risk-based standard aligned with international best practices.

The document notes that although Ethiopia’s established National Public Key Infrastructure (PKI) —a cryptographic that ensures secure communication over a network—provides a foundational security layer for the entire country, financial institutions are largely yet to integrate.

The strategy mandates INSA to onboard all licensed banks, MFIs, PIIs and PSOs to embed Ethiopia’s National PKI into their core-banking systems, payment gateways and customer channels, using its digital certificates to sign and verify all interbank messages, authenticate payment instructions, provide non-repudiation, and enable fully remote, e-signature onboarding.

The strategy also includes plans for a national digital infrastructure working group made up of various agencies, including the National ID Program, to “coordinate and fast-track interoperability between payments and other digital public infrastructure, as well as coordinate data protection reforms.”

The document details that a lack of clarity on where responsibility and fault lies between financial institutions and consumers during instances of fraud often leaves the burden of loss from digital payment fraud almost entirely on the consumer.

This lack of a clear compensation mechanism weakens the incentive for financial institutions to invest in the advanced security systems needed to prevent such fraud and is a major barrier to building trust in the digital ecosystem, according to the strategy.

Officials plan to implement a directive for authorized push payment fraud they hope can help clarify the responsibilities and liability of consumers and financial institutions in preventing fraud.

“Such a policy would mandate that consumers are reimbursed in instances where financial institutions’ staff, agents, or systems are at fault for causing fraud or failing to adequately prevent fraud. Importantly, this would shift the responsibility for reimbursing victims, requiring both the sending and receiving financial institutions to share the cost of the loss, provided the consumer has acted with reasonable care and the financial institution can be deemed at fault,” reads the document.

While Ethiopia has a foundational financial consumer protection directive, its broad nature does not fully address the specific risks inherent in digital financial services, such as agent-related fraud or the complexities of instant payment disputes.

The strategy outlines plans to amend the directive to include a dedicated section for digital financial services.

 Much of the plans hinge on designating the Fayda ID as the primary, mandatory identifier for all new and existing financial accounts, which officials foresee creating a foundational “trust anchor” for the entire ecosystem and reducing the scope for fraud.

The strategy also sets a two-year deadline for the ratification and full implementation of the African Continental Free Trade Agreement (AfCFTA) Digital Trade Protocol in a bid to unlock cross-border e-commerce and digital payment flows.