ABN Insite
Ethiopia’s economic outlook is showing renewed optimism as gold exports surge to record levels, surpassing coffee for the first time in the nation’s history as the leading source of foreign exchange. This remarkable shift comes amid broader economic reforms and foreign exchange liberalization measures that are beginning to reshape the country’s financial landscape.
A Golden Turn for Ethiopia’s Economy
According to data reported by Bloomberg and Business Insider Africa (October 2025), Ethiopia’s gold exports reached USD 3.5 billion in the past fiscal year a dramatic rise from USD 409 million a year earlier. Over the same period, coffee exports stood at around USD 2.65 billion, marking the first time in decades that gold has overtaken the nation’s most iconic agricultural export.
The surge follows the resumption of large-scale mining operations, particularly the reopening of MIDROC Gold Mine Plc, and improved incentives offered to artisanal miners, which helped reduce smuggling and boost official export figures.
Birr Strengthens Amid Foreign Exchange Liberalization
The Ethiopian Birr, which had suffered sharp depreciation after the government’s decision to float the currency in July 2024, is now showing early signs of stabilization. The National Bank of Ethiopia (NBE) has undertaken major reforms allowing commercial banks to trade foreign exchange freely and introducing a market-based exchange rate system.
These measures, coupled with the gold export boom, have increased foreign-currency inflows, strengthening the Birr’s recovery prospects and helping to reduce parallel-market disparities.
IMF-Supported Reforms Drive Confidence
Ethiopia’s reform path is guided by a US $3.4 billion program under the International Monetary Fund (IMF). The plan prioritizes curbing inflation, modernizing monetary policy, and fostering export-led growth. Inflation has already declined from nearly 30% to around 13%, according to IMF and NBE estimates, indicating a more stable macroeconomic environment.
The IMF’s July 2025 review highlighted that Ethiopia had exceeded its net international reserve accumulation target, largely due to strong gold earnings and reduced import pressures. This positive trajectory is boosting investor confidence and foreign interest in Ethiopia’s mining and export sectors.
Structural Transformation and Export Diversification
For decades, Ethiopia’s economy depended heavily on agricultural exports, especially coffee. The recent shift to mineral-led growth marks the beginning of a new structural transformation. Gold now represents Ethiopia’s potential to diversify its export base, attract foreign investment, and strengthen fiscal stability.
The government’s strategy emphasizes improved regulation, infrastructure for mining logistics, and transparency in resource management to ensure the sector remains sustainable and equitable.
Analysts’ Outlook
Economic analysts believe that the combination of robust gold revenues, a liberalized foreign-exchange system, and prudent monetary policies could trigger a medium-term recovery for the Birr and sustain economic stability. However, they caution that challenges remain including potential global gold price fluctuations, structural trade deficits, and regional security risks that could affect investor sentiment.
A New Era for Ethiopia’s Economy
Ethiopia’s “golden moment” reflects more than a surge in exports it signals a pivotal economic transition toward a diversified, market-driven, and resilient economy. The Birr’s expected rebound underscores the government’s ongoing commitment to reform, innovation, and fiscal discipline under global scrutiny.
As Ethiopia continues to balance reform with resilience, the message is clear: the nation is entering a new phase of growth — one powered by gold, guided by reform, and driven by confidence.
