In the dynamic landscape of 2024, Ethiopia is undergoing major changes marked by large-scale regulatory reforms and unanticipated transformations. Ethiopia is making quick progress in updating existing laws to reflect modern needs and trends, as well as developing new ones. These initiatives demonstrate Ethiopia’s determination and constant drive to move forward in the face of challenges brought on by the shifting global economic landscape. These are the main regulatory and transformative changes Ethiopia is implementing in 2024.
Ethiopia Breaks Ground with ‘Historic’ Port Agreement with Somaliland for Crucial Sea Access
Ethiopia has recently secured a ground-breaking agreement granting access to the main port in Somaliland, Somalia’s autonomous region. The deal, deemed “historic,” provides Ethiopia, a landlocked country, with vital access to the port of Berbera in Somaliland. The Memorandum of Understanding (MOU), signed by Ethiopian Prime Minister Abiy Ahmed and Somaliland leader Muse Bihi Abdi, aims to fulfill Ethiopia’s long-standing aspiration to diversify its sea access and strengthen security, economic, and political ties with Somaliland. The agreement includes provisions for Ethiopia to lease a military base. This move comes months after Prime Minister Abiy Ahmed emphasised Ethiopia’s right to port access, raising concerns among neighboring nations. The agreement marks a significant step forward in Ethiopia’s efforts to overcome decades-long limitations on sea access, initially imposed after Eritrea’s secession in 1993. The port of Berbera, in which Ethiopia acquired a 19 percent stake in 2018, plays a pivotal role in enhancing Ethiopia’s economic prospects by opening up new shipping channels.
The agreement marks a significant step forward in Ethiopia’s efforts to overcome decades-long limitations on sea access, initially imposed after Eritrea’s secession in 1993.
Capital Market Service Providers Licensing and Supervision Directive
The “Capital Market Service Providers Licensing and Supervision Directive No. 980/2024,” was introduced by the Ethiopian Capital Market Authority (ECMA) to be effective as of January 18, 2024. The establishment of an extensive legal structure for governing capital market activities in Ethiopia is greatly advanced by this directive. It provides comprehensive licensing guidelines, lists requirements for license acquisition, and defines the duties and obligations of licensed service providers. The ECMA’s dedication to upholding market integrity, encouraging investor protection, and improving market transparency is demonstrated by the adoption of these new regulations. The directive, which promotes stability while protecting investors’ interests, is cited by Dr. Brook Taye, Director General of the Ethiopian Capital Market Authority, as a significant turning point in the growth of Ethiopia’s capital market.
The Ethiopian Capital Market Authority will grant 15 different kinds of licenses under the new framework to eligible capital market service providers who fulfil the requirements specified in the directive. To guarantee that these licensed service providers are following the rules, the ECMA will play a pivotal role in monitoring and controlling their operations. The authority is finalizing preparations for the launch of the capital market in Ethiopia, aiming to create an environment conducive to investment and economic growth. To promote a growing and well-regulated capital market, the ECMA aims to draw in both domestic and foreign market participants by building a strong legal framework. Ethiopia is well-positioned to strengthen its capital market and propel economic growth in the years to come with these new regulations.
Arifpay launched Arifpay 2.0, pioneering the future of digital payments in Ethiopia
Arifpay Financial Technologies S.C. has introduced Arifpay 2.0, a revolutionary development in the field of digital payments in Ethiopia. The improved system, which was inspired by Arifpay 1.0’s success, offers an online payment tool that works in harmony with e-commerce, delivery services, hotels, transport, and humanitarian aid organizations. With the ability to accept debit cards and digital wallets, this creative solution offers convenience and efficiency to merchants. An improved ArifPOS version is also available with Arifpay 2.0, which supports wallet and card transactions. With a centralized terminal management system, all-encompassing control, and intuitive user interfaces, Arifpay hopes to transform digital payments in Ethiopia and boost the country’s GDP.
Ethiopia’s Personal Data Protection
Ethiopia’s first personal data protection bill has received the Council of Ministers’ approval for parliamentary ratification. Currently, the house of people representatives has been on the process of consultation for its approval. The legislation, it says, would help promote a culture of safeguarding individuals’ privacy and personal data administration. The draft proclamation defines the duties and responsibilities of entities handling personal data and a procedure to enforce them.
In its preamble of the draft proclamation, states that privacy is a right recognized by the Constitution of the Federal Democratic Republic of Ethiopia and the right of individuals over their personal data constitutes an aspect of the aforementioned constitutional right. it is necessary to put in place an enabling legal framework to support the development of culture and practice of personal data protection through defining the general principles by which personal data should be processed. the existence of personal data protection law is essential to the protection of human rights and fundamental freedoms in the development of a successful digital economic initiative. it is necessary to define the rights of data subjects, the duties of persons which control and process personal data, and such other issues essential to a well-functioning personal data protection system.
Ethiopia’s Financial Sector Liberalisation
Ethiopia is finalizing the legal framework to allow foreign banks to operate in the country, aiming to modernize the sector and attract foreign investment. The draft legislation is under discussion and is expected to be passed around mid-2024. According to the recent banking policy of Ethiopia, foreign banks can acquire shares in existing financial institutions, open fully owned subsidiaries, or merely open representative branches in Ethiopia. According to sources from the National Bank of Ethiopia (NBE), however, the question of majority-owned banks is still under discussion.
Ethiopia’s Rural Land Administration and Use Proclamation
The draft proclamation aims to improve the livelihood of farmers, semi-pastoralists, and pastoralists at the level of the country’s economic, political and social development by establishing improved rural land administration and use system that enhance the land property rights of farmers, semi-pastoralists, pastoralists over their land holding. It is also necessary for a modern land information system that provides reliable data to users to bring about significant change in natural resource use and conservation practices by strengthening the tenure security of landholders and reduce land-related disputes.