• Eyob Tekalign, State Secretary for Finance, becomes the new Governor of the National Bank of Ethiopia.

• He inherits a mandate marked by persistent inflation, birr pressures, and unsustainable debt.

• Tekalign's appointment occurs as Ethiopia navigates an IMF program and crucial debt restructuring.

State Secretary for Finance, Eyob Tekalign, has been appointed Governor of the National Bank of Ethiopia (NBE). Tekalign, a close associate of Prime Minister Abiy Ahmed, assumes a critical mandate characterized by persistent inflation, pressures on the birr, and unsustainable debt.

Prime Minister Abiy Ahmed named Eyob Tekalign, State Secretary for Finance since 2018, as Governor of the National Bank of Ethiopia. Tekalign succeeds Mamo Mihretu, who departed his position in early September after leading a series of major economic reforms.

A Technocrat at the Heart of Reforms

Mr. Tekalign, 44, holds a PhD in political economy from the University of Maryland. He operates within Abiy Ahmed's reformist circle. He has managed sensitive issues, including external debt restructuring, fiscal reforms, and national planning. He also serves on the boards of several strategic companies, including EthioTelecom and Ethiopian Electric Power.

His appointment comes as the Central Bank must strengthen its role in economic stabilization. Ethiopia is currently engaged in a four-year, $3.4 billion program with the IMF under the Extended Credit Facility.

A Delicate Monetary Transition

Under Mamo Mihretu's leadership, the NBE initiated a gradual liberalization. This included a shift towards a more flexible exchange rate regime, the introduction of an interest rate-based monetary policy framework, and the opening of the banking sector to foreign capital. These measures corrected some imbalances, improved foreign exchange availability, and reduced inflation, which fell to approximately 14% in spring 2025 from over 30% two years earlier.

However, immense challenges persist: inflation remains in double digits, the birr remains vulnerable to parallel market tensions, and public debt approaches 50% of GDP. This occurs despite an agreement in principle reached with the official creditors' committee under the G20 Common Framework. The country remains in default on its $1 billion eurobond, which matured at the end of 2024, according to the IMF. The institution also notes arrears to certain bilateral and commercial creditors, confirming unsustainable external debt. While restructuring discussions progress, Addis Ababa must still reach a compromise with private bondholders, an essential condition to restore a viable trajectory and market confidence.

Confidence and External Constraints

According to the IMF, growth should reach 7.2% in 2024/25. A strong agricultural season, record coffee and gold exports, and the resumption of external financing support this projection. In the medium term, Addis Ababa targets a growth rate of 7.5% to 8%, provided reform efforts continue.

Eyob Tekalign must also manage a more uncertain international context. This includes declining external aid, with official development assistance (ODA) falling from 12% of GDP in 2011 to less than 4% in 2023. Additionally, the effects of climate change threaten the agricultural sector, which still represents nearly 40% of GDP.

This article was initially published in French by Fiacre E. Kakpo

Adapted in English by Ange Jason Quenum