Ethiopian merchandise imports rise; government reports import substitution gains

Ethiopia’s merchandise imports rose to 22.1 billion USD in the 2025/26 fiscal year, according to a report by Cepheus Research & Analytics, driven by continued high demand for fuel and capital goods. The merchandise trade deficit widened to approximately 10.91 billion USD. Despite rising imports, the government claims success in import substitution, with Prime Minister Abiy Ahmed reporting 5 billion USD in savings through local production efforts. The National Bank of Ethiopia noted that 2024 foreign-exchange reforms have improved currency availability and reserves. Financial inflows, including nearly 8 billion USD in private transfers and 4.4 billion USD in foreign direct investment, helped finance external payments.