Addis Ababa — Mamo Mihretu, Governor of the National Bank of Ethiopia (NBE), has resigned after a tenure that redefined the country’s financial sector through bold reforms, including floating the birr, opening the banking industry to foreign competition, and launching the first securities exchange in decades.

Mihretu, who was appointed in January 2023 by Prime Minister Abiy Ahmed, confirmed his departure in a farewell letter on Tuesday, saying the time had come to “pursue other passions and tackle other challenges.”

A Reformist’s Tenure

In his letter, Mihretu credited Abiy Ahmed’s leadership and said he was “grateful for the opportunity to serve as a longstanding member of Ethiopia’s macroeconomic team that helped design and lead the Home-Grown Economic Reform Program.”

During his two years at the helm of the central bank, Mihretu’s agenda included:

• Floating the Birr (July 2024): Ethiopia abandoned its tightly managed exchange rate, letting the birr fall around 30% against the dollar to align with market forces. The move was central to unlocking a $10.7 billion IMF–World Bank financing package.
• Banking Liberalization (Dec 2024): Lawmakers passed legislation to allow foreign banks to operate in Ethiopia, ending decades of domestic-only control and capping foreign ownership at 40%.
• Capital Market Launch (Jan 2025): The Ethiopian Securities Exchange (ESX) opened, the first since the Haile Selassie era. By mid-2025, government Treasury bills were trading on the ESX with a central securities depository in place.
• Digital Payments Expansion: Under NBE’s oversight, digital transactions grew more than ten-fold, supported by the National Digital Payments Strategy.

Gains in Stability

Mihretu pointed to measurable progress under his watch:

• Foreign currency reserves tripled, reaching record highs.
• Inflation fell to its lowest in seven years, projected at ~10% in FY2025/26, the lowest in a decade.
• The financial sector’s assets surpassed 5 trillion birr, reflecting accelerated growth in banking activity.

“These and other historic achievements of the government are nothing short of remarkable,” he wrote, thanking NBE staff for their professionalism and dedication.

The Letter in His Own Words

“After seven years of dedicated public service in different capacities, the time has come for me to leave government to pursue other passions and tackle other challenges.

I am incredibly proud of the work we did at the National Bank of Ethiopia. We opened the financial sector to foreign banks, advanced digital inclusion, and secured $10.5B in external financing from partners including the IMF and World Bank, while stabilizing the macroeconomy and restoring investor confidence.

On leaving the NBE today, I am confident that the vision of a modern central bank that is fit for purpose is within reach.” — Mamo Mihretu

Market Outlook

Mihretu’s resignation comes as Ethiopia navigates delicate macroeconomic terrain:

• Currency Volatility: The floating birr continues to trade under pressure, with the official and parallel market rates gradually converging but still vulnerable to external shocks.
• Foreign Bank Entry: Analysts expect Kenya’s KCB Group and South Africa’s Standard Bank to be among the first movers once regulatory frameworks are finalized.
• Debt and Financing: Continued disbursement of IMF and World Bank funds hinges on Ethiopia’s adherence to reforms, fiscal discipline, and ongoing debt-restructuring negotiations.

Legacy and Uncertainty

Mihretu’s central bank tenure compressed decades of liberalization into two years. Supporters argue the reforms were overdue and necessary to unlock foreign financing. Critics caution that the social costs—particularly from currency devaluation—risk undermining public support.

Still, his departure leaves Ethiopia’s financial system at a crossroads. The reforms he championed have laid the groundwork for a modernized economy, but their durability will depend on sustained political backing and investor confidence.