The establishment of forex bureaus in Ethiopia marks a pivotal moment in the nation’s transition to a market-based foreign currency exchange system. As the National Bank of Ethiopia (NBE) moves away from a decade-long fixed exchange rate regime, these bureaus represent a critical step toward afostering greater transparency and efficiency within the foreign exchange market. By bridging the gap between official and black market rates, the bureaus provide businesses and individuals with a legitimate means of accessing foreign currency.
However, from the outset, these bureaus have faced substantial challenges. Despite the widespread issue of local currency liquidity across the economy, they have voiced concerns about the operational limitations of the Real-Time Gross Settlement (RTGS) system, which disrupts the smooth transfer of funds between banks. This technical bottleneck has added complexity to their operations, limiting their ability to fully support the goal of a more streamlined and transparent forex market. “We are only transferring a limited amount to our clients and losing trusts due to this reason,” said Moges Eshetu, CEO of Rooha Forex Bureau.
In addition, forex bureaus face significant challenges due to regulatory constraints imposed by the National Bank of Ethiopia (NBE), which limit their ability to expand branches both in Addis Ababa and across regional cities. These restrictions have made it difficult for them to scale their operations to meet the rising demand for foreign currency. With limited access to capital and facing tight liquidity, the bureaus are struggling to secure the necessary funds to grow. This financial strain, coupled with high operational costs, hinders their ability to expand and fully contribute to addressing the country’s currency shortages and broader financial modernization goals.
“We have submitted a request to the NBE for approval to expand our branch network, but we were informed that the expansion process has been temporarily suspended,” Moges told Addis Insight. He added that there should be a clear rationale behind this suspension, especially considering the bureau is licensed to operate within the country.
He also drew attention to the challenges surrounding the “on-arrival visas”. While the NBE has made it clear that only clients holding traditional visas will be accepted, many individuals traveling for medical or other urgent reasons arrive with on-arrival visas, which are now issued digitally. This discrepancy between policy and the reality of modern travel has created significant hurdles for certain travelers, who, despite holding valid digital visas, find themselves unable to meet the NBE’s requirements. “Humanity will force you to provide services to those who present what they have, but the NBE imposes harsh penalties. There needs to be a law that addresses this issue,” Moges stated.
