ETHIOPIA Trends and Developments Contributed by: Getu Shiferaw, Awoke Mitku, Gutema Kajela Ejeta and Debora Belachew, Mehrteab & Getu Advocates LLP
the Green Directive and the circulars of dif - ferent authorities presents a potential chal - lenge. The Ministry of Finance, in a letter to the NBE dated 30 July 2024, stated that the foreign exchange restriction on fuel-powered car imports would remain in place, while the restrictions on the other 37 banned catego - ries of items would be lifted. This inconsist - ency could lead to confusion and complica - tions for importers and financial institutions attempting to navigate and comply with the differing regulations. • Recognition of new international remittance service providers: The Green Directive allows companies whose payment systems, plat - forms, gateways or physical branch networks can be used to effect remittance payments to beneficiaries – such as telecom companies, payment system operators and other similar entities designated and approved by the NBE – to provide international remittance ser - vices. Under Directive No FXD/74/2021, only banks, Ethiopian postal services and payment instrument issuers could provide remittance services in association with international remittance service providers after obtaining approval from the NBE. • Abolition of the interest rate cap on foreign loans and supplier credit: The Green Direc - tive removes the ceiling on the “all-in cost” rate, which is the rate of interest, other fees and expenses in foreign currency exclud - ing commitment fees and pre-payment fees. Now, parties have the discretion to negotiate and agree on the all-in-cost rate; however, the borrower shall present and transparently disclose the all-in-cost rate at the time of application. • Eligibility of construction companies for sup - plier credit: Unlike Directive No FXD/82/2022, under which only exporters and importers of agricultural machines or inputs and lique -
fied petroleum gas (LPG) gas importers were eligible for supplier credit, the Green Directive makes construction sector companies eligible for the same. • Opening of Ethiopia’s securities market to foreign investors: The Green Directive opens Ethiopia’s securities market to foreign inves - tors. Accordingly, foreign portfolio investors seeking to participate in Ethiopia’s capital markets will be permitted to do so subject to specific regulatory requirements that shall be set by the NBE and the Ethiopian Capital Markets Authority (ECMA). • More flexible foreign exchange regulation in special economic zones: The new policy grants foreign exchange privileges to compa - nies within special economic zones, includ - ing the ability to retain 100% of their foreign exchange earnings. The Personal Data Protection Proclamation For a long time, Ethiopia had no comprehen - sive data protection laws, which were dispersed among different pieces of legislation such as the Federal Democratic Republic of Ethiopia (FDRE) Constitution, the Ethiopian Civil Code, the Crimi - nal Code, Computer Crime Proclamation No 958/2016, Communication Service Proclamation No 1148/2019, Mass Media and Access to Infor - mation Proclamation No 590/2008 (as amend - ed by Media Proclamation No 1238/2021), the Ethiopian Health and Nutrition Research Institute Establishment Council of Ministers’ Regulation No 4/1996 and other laws of Ethiopia. In July 2024, Ethiopia enacted Personal Data Protection Proclamation No 1324/2024, with the main purpose of introducing special and com - prehensive personal data protection regulations enabling the establishment of a strong personal data protection system that aligns with interna - tional standards in order to implement privacy
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