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2024-09-05

National Bank of Ethiopia Annual Report 2020-2021

The National Bank of Ethiopia issued its 2020-2021 Annual Report to document a 6.3 percent real GDP expansion and a steady structural shift toward manufacturing and export-led growth across key economic sectors. The publication details how headline inflation reached 20.2 percent, driven by non-food and food price increases, while per capita income rose to USD 1,092 and the investment-to-GDP ratio held at 28.0 percent under a tight monetary policy framework. It outlines required financial sector adjustments, foreign exchange market operations, and government deficit financing to sustain economic stability and support ongoing monetary policy directives.

Ethiopia

National Bank of Ethiopia

2020/21 NATIONAL BANK OF ETHIOPIA NATIONAL BANK OF ETHIOPIA

National Bank of Ethiopia Annual Report 2020/21 National Bank of Ethiopia Prepared by: Domestic Economic Analysis and publication Directorate, National Bank of Ethiopia Contact Address: P.O.Box: 5550 Tel. (00251) 115 51 74 30 Tel. (00251) 115 51 45 88 Email: nbe.excd@ethionet.et Website: http//www.nbe.gov.et Addis Ababa, Ethiopia Telegraphic Address: NATIONAL BANK, TELEX21020,CODES USEDPETERSON 3rd & 4th ED BENTELY 2ND PHRAS A.B.C....6TH EDITION !is publication can be acquired by subscription or exchange. Please contact: National Bank of Ethiopia Domestic Economic Analysis and publication Directorate P.O.Box 5550 Tel. +251-11 517 5262 / 11 517 5268 Addis Ababa 2020/21 Annual Report

National Bank of Ethiopia Annual Report 2020/21 Currency and Time Currency Time Currency Unit: Birr (Br) Exchange Rate: Look at 66 Fiscal Year: July 8th to july 7th Co"ee Year: October to September Calender Year: September 11 to September 10 ** !ere is a di"erence of about 73/4 Years between the Gergorian and the Ethiopian Calander

National Bank of Ethiopia Annual Report 2020/21

NBE Board of Directors H.E. Ambassador Girma Birru (Chairman) H.E. Dr. Yinager Dessie (Member) H.E Mr. Tekelewold Atnafu (Member) H.E. Mr. Ahmed Shide (Member) H.E. Dr. Eyob Tekalign (Member) Mr. Gebreyesus Gunte (Secretary)

National Bank of Ethiopia Annual Report 2020/21 2. NBE Executive Management Members H.E. Dr. Yinager Dessie (Governor & Chairman) Mr. Gebreyesus Gunte (Senior Advisor to the Governor, Member & Secretary) H.E. Mr. Solomon Desta (Vice Governor, Financial Institutions Supervision Cluster & Member) H.E. Mr. Fikadu Diga!e (Vice Governor & Chief Economist, Monetary Stability Cluster & Member) H.E. Mr. Eyob G/Eyesus (Vice Governor, Corporate Service Cluster & Member) Mr. Abate Mitiku (Director, Change Management, Planning and Communication Directorate & Member) 3. NBE Senior Management Members

National Bank of Ethiopia Annual Report 2020/21 H.E. Dr. Yinager Dessie (Governor & Chairman) Mr. Mulalem Eshetu (Advisor to Vice Governor & Chief-Economist, Monetary Stability Cluster) H.E. Mr. Solomon Desta (Vice Governor, Financial Institutions Supervision Cluster) Mr. Nigusse Aklog (Advisor to Vice Governor, Corporate Services Cluster) H.E. Mr. Fikadu Diga!e (Vice Governor & Chief Economist, Monetary Stability Cluster) H.E. Mr. Eyob G/Eyesus (Vice Governor, Corporate Service Cluster) Mr. Gebreyesus Gunte (Senior Advisor to the Governor) 3. NBE Senior Management Members

National Bank of Ethiopia Annual Report 2020/21 Mr. Abate Mitiku (Director, Change Management, Planning and Communication Directorate) Mrs. Woyenshet Zeberga (Director, Monetary and Financial Analysis Directorate) Mrs. Yenehassab Tadesse (Director, Foreign Exchange Monitoring and Reserve Management Directorate) Mr. Merga Wakweya (Advisor to Vice Governor, Financial Institutions Supervision Cluster) Mr. Fitsum Tsehaye (Director, Domestic Economic Analysis and Publication Directorate) Mr. Wondimeneh Asrat (Director, Internal Audit and Risk Management Directorate) Mr. Habtamu Workineh (Director, External Economic Analysis and International Relations Directorate) Mr. Befekadu Gashaw (Director, Economic Modeling and Statistical Analysis Directorate) Mr. Abebe Senbete (Director, Currency Management Directorate)

National Bank of Ethiopia Annual Report 2020/21 Mr. Belay Tulu (Director, Insurance Supervision Directorate) Mrs Marta H/Mariam (Director, Payment and Settlement System Directorate) Mr Mes!n Getachew (A-Director, Legal Services Directorate) Mr. Frezer Ayalew (Director, Bank Supervision Directorate) Mr Temesgen Zeleke (Head, Financial Inclusion Secretariat) Mr. Getachew Sisay (Director, Corporate & Finance Directorate) Mr. Asfaw Abera (Director, Micro#nance Institutions Supervision Directorate) Mr Zelalem Abera (Director, Procurement and Service Management Directorate) Mr Kassahun Yohannes (A-Director, Ethiopian Institute of Financial Studies)

National Bank of Ethiopia Annual Report 2020/21 Mrs Workabeba Bahiru (Director, Human Resource Management Directorate) Mr. Tebebe H/Giorgis (D/Director, Foreign Exchange Monitoring and Reserve Management Directorate) Mr Wondewossen Tsegaw (Director, Information System Management Directorate) Mr. Gebeyaw Takele (Director, Project Management O$ce) Mr. Mohammed Abdela (D/Director, Change Management , Planning and Communication Directorate) Mr Eyasu Teshome (Director, Engineering , Property & Transport Service Management Directorate) Mr. Gobena Worana (D/Director, Bank Supervision Directorate)

National Bank of Ethiopia Annual Report 2020/21 Table of Content ETHIOPIA: MACRO ECONOMIC & SOCIAL INDICATORS .....................................I GOVERNOR'S NOTE ............................................................................................................1 I. Overall Economic Performance .......................................................................................4 1.1 Economic Growth ................................................................................................4 1.2 GDP by Expenditure Components ....................................................................9 1.3 Micro and Small-Scale Enterprises ..................................................................10 1.4 Access to Water Supply ......................................................................................13 1.5 Developments in Education Sector .................................................................15 1.6 Telecommunication ...........................................................................................18 II. ENERGY PRODUCTION ..............................................................................................21 2.1 Electric Power Generation ................................................................................21 2.2 Volume and Value of Petroleum Imports .......................................................22 III. PRICE DEVELOPMENTS ..........................................................................................27 3.1 Developments in Consumer Price at National Level ....................................27 3.2 Consumer Price Developments in Regional States .......................................30 IV. MONETARY AND FINANCIAL DEVELOPMENTS ..............................................35 4.1 Monetary Developments and Policy ...............................................................35 4.2 Developments in Interest Rate .........................................................................39 4.3 Developments in Financial Sector ...................................................................40 4.4 Financial Activities of NBE ..............................................................................47 4.5 Developments in Financial Markets ................................................................48 V. DEVELOPMENTS IN EXTERNAL SECTOR ............................................................ 52 5.1 Overall Balance of Payments ........................................................................... 52 5.2 Developments in Merchandise Trade ..............................................................54 5.3 Services and Transfers .......................................................................................63 5.4 Current Account .................................................................................................65 5.5 Capital Account ..................................................................................................65 5.6 Changes in Reserve Position ............................................................................65 5.7 External Debt ....................................................................................................65 5.8 Developments in Foreign Exchange Markets ................................................66

National Bank of Ethiopia Annual Report 2020/21 VI. GENERAL GOVERNMENT FINANCE .............................................................................72 6.1 General .........................................................................................................................72 6.2 Revenue and Grants ....................................................................................................73 6.3 Expenditure ..................................................................................................................75 6.4 De#cit Financing .........................................................................................................77 VII. INVESTMENT .......................................................................................................................79 7.1 Investment by Sector ..................................................................................................82 7.2 Distribution by Region ...............................................................................................83 VIII. INTERNATIONAL DEVELOPMENTS .......................................................................... 86 8.1 International Economic Developments ...................................................................86 8.2 Implications of International Economic Developments on the Ethiopia Economy ..............................................................................................................................................90 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 ............................. 91 STATEMENT OF DIRECTOR’S RESPONSIBILITY ...................................................92 INDEPENDENT AUDITOR’S REPORT ................................................................ 93-95 STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME ............................................................................................................................96 STATEMENT OF FINANCIAL POSITION ..................................................................97 STATEMENT OF CHANGES IN EQUITY....................................................................98 STATEMENT OF CASH FLOWS...................................................................................99 NOTES TO THE FINANCIAL STATEMENT ....................................................100-197 STATISTICAL ANNEXES ...............................................................................................198

National Bank of Ethiopia Annual Report 2020/21 I 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 (2008) (2009) (2010) (2011) (2012) (2013) (2014) (2015)

Country Profile Land Area (total, In Sq.Km) 1.14 million 1.14 million 1.14 million 1.14 million 1.14 million 1.14 million 1.14 million 1.14 million Arable Land (% of total area) NA 12.00 13 14.2 14.32 14.41 16.2 16.2 Agricultural Irrigated Land (% of totalAgricultural area) NA NA 4.0 4.0 4.7 5 6% 6.20% Population Density (person per sq.km)* 101.00 104.00 106 109 112 115 123 127
Social Indicators Population total, in millions (Mid-Year population) 91.2 93.4 95.5 97.6 99.75 101.9 104.1 105.7 (o/w Urban Poulation, in %) 19.9 20.3 21 22.8 28.2 Working Age Population (In Millions) Urban 12.2 12.8 12 13.13 14.03 15.01 16.04 31.1 Rural 39.7 40.8 42 43.06 44.28 45.8 46.6 40.4 Total 52.0 53.6 56 56.19 58.31 60.81 62.64 61.7 Age Dependency Ratio 75.0 75 69 62 Life Expectancy at Birth (Male - Female) 60.2-64.2 60.2-64.2 62.4-66.6 62.4-66.6 62.4-66.7 65.5 Crude Birth Rate 30.3:1000 30.3:1000 27:1000 27:1000 27:1001 27:1002 27:1003 27:1000 Crude Death Rate 7.2:1000 7.2:1000 6:03 6.00 6.30 Natural Rate of Population Increase (In %) 2.31 2.31 2:07 Total Fertility Rate 3.94chil:W 3.94chil:W 3.5chil:W 4.6chil:W 4.6chil:W 4.1 People : Hospital Beds 2850:1 2980:1 3617:1 1,312 2750 2720 2900 3225: 1 bed People : Physician1 14045:1 22766:1 26635:1 10,521:1 9977:1 8448:1 7576 5737 People : Nurse 1 1999:1 1194:1 1780:1 1620:1 1705 1473 1415 983 Infant Mortality Rate 62.4:1000 62.4:1000 53.3:1000 53.3:1000 43.3:1000 47:1001 47:1000 34:1000 Access to Safe Water (In %) Country Level 61.0 66.0 71 76 79.3 58.5 58.76 67.1 Urban Population 52.5 55.0 60 66 66.5 62.95 71.97 75.7 Rural Population 63.1 68.0 74 79 82.7 57.26 59.76 64.5 Student-Teacher Ratio Primary (1-8) 46:1 43.00 43 39 39 34.8 34.6 36.4 Secondary (9-12) 26.5:1 43.00 43 22.5 24 27.4 27.7 26.6 Technical & Vocational 12.6Ł1 11.00 26 13.3 13.3 1:11 1:11 1:18 Student-School Ratio NA Primary (1-8) 573Ł1 580.00 567 628 528 512.7 526.6 517.6 Secondary (9-12) 767.2Ł1 754.00 741 568 940 1017 1063 1009.6 Technical & Vocational 523Ł1 329.00 318 246.8:1 246.6:1 177 158 151.5 Ethiopia: Macroeconomic and Social Indicators Indicators

National Bank of Ethiopia Annual Report 2020/21 II 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 (2008) (2009) (2010) (2011) (2012) (2013) (2014) (2015) 3. Macroeconomic Indicators 3.1. Real sector Development2 GDP at Current Market Price (In Mn. Birr) 1,568,097.45 1,832,553.7 2,202,373 2,696,223.0 3,374,747 4341387.1 6,157,538 8,722,308 Nominal GDP Growth Rate (In %) 17.7 16.9 20.2 22.4 25.5 28.6 41.8 42.4 Average Marginal Exchange Rate (Birr per USD) 21.1 22.4 26.1 28.1 31.3 39.0 48.57 53.283 GDP at Current Market Price (In Mn. USD) 74,296.6 81,760.4 84,355.6 95,951.0 107,673 111271.2 126,783 163,698 Nominal GDP per Capita (In USD) 814.6 875.8 883.3 983.1 1,080 1091.8 1,218 1,549 Real GDP per Capita ( In Birr ) 8,864.0 18,257.5 19,205 20,360.2 21,144.7 21,863.35 22,542.21 22,798,071.26 Real GDP per Capita Growth Rate (In %) 3.4 8.0 5 6 4 3.4 3.1 101035.0 GDP Deflator (% change) 9.5 6.7 12.5 13.2 18.2 21.8 34.7 32.9 Real GDP at constant basic price (In Mn. Birr) 1,449,397.5 1,596,481.6 1,719,491 1,874,689.3 ϭ͕ϵϴϵ͕ϱϴϳ͘ϳ Ϯ͕ϭϭϰ͕Ϯϯϴ͘ϯ Ϯ͕Ϯϰϴ͕ϱϳϭ͘ϲ Ϯ͕ϰϯϵ͕ϰϳϴ͕ϭϬϬ͘ϳ Real GDP at constant market price (In Mn. Birr) 1,568,097.5 1,717,127.2 1,834,066 1,987,157.5 Ϯ͕ϭϬϵ͕ϭϴϬ͘ϭ Ϯ͕ϮϮϴ͕ϭϳϬ͘ϭ Ϯ͕ϯϰϲ͕ϲϰϰ͘ϭ Ϯ͕ϰϬϵ͕ϵϮϭ͕ϰϭϳ͘ϴ Real GDP Growth Rate (In %) 8.0 10.1 7.7 9.0 6.1 6.3 6.1 7.2 Agriculture & Allied Activties(In Billion Birr) 544.1 580.4 600.9 623.8 650.3 686.4 728.4 774.0 Industrial Sector (In Billion Birr) 343.9 413.8 464 526.2 576.9 618.8 649.2 694.2 Service Sector(In Billion Birr) 575.9 619.3 674 745.7 786.8 836.2 899.8 971.3 Agriculture & Allied Activties (% of GDP) 37.5 36.4 34.9 33.3 32.7 32.5 32.4 32.1 Industrial Sector (% of GDP) 23.7 25.9 27.0 28.1 29.0 29.3 28.9 28.8 Service Sector (% of GDP) 39.7 38.8 39.2 39.8 39.5 39.6 40 40.3 Private Consumption Expenditure 1,042,264.6 1,219,365.9 1,441,581.1 1,848,070.0 2,360,896 3,134,994 4,764,429 6882737.9 Government Consumption Expenditure 174,598.8 203,607.9 225,523.2 247,362.0 307,769 383,565 453,263 551106.6 Investment 585,665.0 704,596.0 751,626.2 948,866.0 1,037,685 1,216,585 1,560,325 1,933,863 Exports 122,500.8 139,830.1 184,282.1 213,437.0 239,229 329,634 507,692 575,062 Imports 424,749.9 430,233.2 502,112.9 561,512.0 571,230 723,391 1,128,171 1,220,461 Resource Balance (302,249.0) (290,403.0) (317,831.0) (348,075.0) -329,096 -394,236 -620,479 -645,400 Gross Private Consumption (% of GDP) 66.5 66.5 65.5 68.5 69.96 72 77.4 78.9 Gross Government Cosumption (% of GDP) 11.1 11.1 10.2 9.2 9.1 8.84 7.4 6.3 Gross Domestic Fixed Investment (% of GDP) 37.3 38.4 34.1 35.2 30.7 28.02 25.3 22.2 Resource Balance (% of GDP) (19.3) (15.8) (14.4) (12.9) (9.8) -9.08 -10.1 -7.4 3.2. Monetory Indictors Narrow Money Supply (M1) (In Mn. Birr) 178,609.66 216,769.62 281,154.66 308,937.13 360,585.50 437,391.97 588,015.82 706,142.20 Broad Money Supply (M2) (In Mn. Birr) 445,266.25 573,384.05 740,572.88 886,752.53 1,037,646.33 1,348,266.15 1,715,310.03 2,170,848.37 Net Foreign Assets (In Mn. Birr) 21,524.19 38,034.79 39,376.20 14,506.19 (8,321.31) (812.32) (111,427.54) (160,097.68) Reserve Requirement (CBs) 21,745.43 28,278.91 36,385.76 44,861.74 51,952.51 67,732.37 119,022.55 150,325.15 Interest Rate (In %) Minimum Deposit Rate 5.00 5.00 7 Lending Rate 12.75 12.75 13.5 13.5 14.25 Total Net Domestic Credit (in mn. Birr) 490,230.35 631,092.73 784,621.73 963,699.91 1,176,926.45 1,481,844.43 1,930,621.80 2,444,435.50 Government 47,524.36 85,441.85 102,002.83 109,799.21 137,082.91 214,275.16 422,864.02 573,675.72 Other Sectors 442,705.99 545,650.89 682,618.90 853,900.70 1,039,843.53 1,267,569.27 1,507,757.78 1,870,759.78 Indicators Continued….

National Bank of Ethiopia Annual Report 2020/21 III 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 (2008) (2009) (2010) (2011) (2012) (2013) (2014) (2015) 3.3. Inflation (CPI growth rate)3 Country Level -General inflation 9.7 7.4 14.60 12.60 19.90 20.20 33.80 32.60 -Food inflation 11.2 7.2 13.40 13.10 23.30 23.20 40.30 31.70 -Non-Food inflation (core inflation) 8.1 7.5 15.80 11.90 15.80 16.40 25.15 33.90 Addis Ababa -General inflation 10.3 2.3 16.5 14.6 18.8 19.5 29.8 37.3 -Food inflation 16.6 1.2 8.7 15 25.9 26.2 36.6 35.5 -Non-Food inflation (core inflation) 5.8 3.2 22.6 14 13.9 14.4 24.1 39.0 3.4. External Trade(In Mn.USD) Export of goods & services 6077.3 6257.2 7095.9 7694.9 7715.7 8498.9 10457.7 10855.8 Import of goods & services 20552.1 19714.0 19707.4 20704.8 18828.3 19177.0 23845.0 23394.5 Net trade in goods & services -14474.7 -13456.9 -12611.4 -13009.9 -11112.6 -10678.0 -13387.3 -12538.6 Current account balance including official transfers -6655.1 -6543.2 -5285.0 -4948.0 -4401.9 -3190.7 -5145.1 -4637.4 Capital account balance 6554.1 6885.3 6184.6 4822.4 4326.5 3785.8 2723.7 3504.9 Overall balance of payments -830.9 658.6 -201.6 -941.6 -833.4 298.7 -2149.8 -752.0 3.5. Government Finance (In Mn .Birr4 ) Total Revenue (including grants) 243,671.6 269,105.9 287,562.1 344,936.5 394,965.8 478,888.1 566,753.6 717,586.7 Total Revenue (excluding grants) 230,657.3 256,629.0 269,648.2 311,317.4 354,312.8 444,582.6 540,060.5 685,459.1 o/w Tax-Revenue 189,717.2 210,135.9 235,229.5 268,457.4 311,476.5 388,763.5 477,770.3 593,232.1 Tax-Revenue as % of GDP 14.7 14.0 12.3 11.6 10.5 10.2 8.8 7.9 Total Expenditures 272,930.1 329,286.8 354,205.3 413,105.7 480,143.2 599,006.7 779,099.0 938,771.6 Current Expenditures 131,902.8 176,703.0 210,470.2 238,156.6 275,967.0 363,596.9 517,043.4 582,854.6 Capital Expenditures 141,027.3 152,583.8 143,735.1 174,949.1 204,176.1 235,409.7 262,055.7 355,917.0 Equity Contribution (Sinking Fund) Special Programs - - - - - - Total Expenditures as % of GDP 17.4 18.0 16.1 15.4 14.2 13.8 12.7 10.8 Current Surplus/Deficit 111,768.8 92,402.9 77,091.9 106,779.9 118,998.8 115,291.2 49,710.3 134,732.1 Overall Budget Deficit (including grants) (29,258.5) (60,180.9) (66,643.2) (68,169.2) (85,177.4) (120,118.5) (212,345.4) (221,184.9) Deficit as % of GDP (1.9) (3.3) (3.0) (2.5) (2.5) (2.8) (3.4) (2.6) Overall Budget Deficit (excluding grants) (42,272.8) (72,657.8) (84,557.1) (101,788.3) (125,830.4) (154,424.0) (239,038.5) (253,312.4) Deficit as % of GDP (2.7) (4.0) (3.8) (3.8) (3.7) (3.6) (3.9) (2.9) 3.6. Exchange Rate (Birr/ USD) Inter-Bank Forex Market Rate5

Period weighted Average 21.1059 22.4137 26.1082 28.0543 31.3427 39.0163 48.5673 53.2830
End period 21.8004 23.1081 27.2621 28.9109 34.9822 43.6910 51.9938 54.5943 Indicators Continued….

National Bank of Ethiopia Annual Report 2020/21 IV 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 (2008) (2009) (2010) (2011) (2012) (2013) (2014) (2015) 3.7. Treasury Bill Market (In Mn .Birr) T-Bills Demanded (Total) 161,575.24 225,321.24 323,991.24 422,633.54 242,155.09 284,783.55 599,478.63 595,231.34 T-Bills Sold 161,475.24 225,321.24 323,991.24 422,633.54 242,155.09 238,799.55 582,268.63 576,081.34 Average Weighted Yield (in %) 1.438 1.424 1.420 1.741 4.808 7.970 9.459 9.70 T-Bills Outstanding by holder 57,252.56 73,271.56 111,213.56 138,054.36 23,724.00 116,559.95 317,169.59 341,869.53 Banks - - - 650.00 5,604.00 52,040.00 195,432.29 146,568.05 Non-Banks 57,252.56 73,271.56 111,213.56 137,404.36 18,120.00 64,519.95 121,737.30 195,301.48 3.8. Inter Bank Money Market Rate5 3.9. Financial Institutions Number of Commercial Banks 17.00 18.00 30.00 31.00 (o/w Private banks) 16.00 17.00 28.00 29.00 Number of Bank Branches 3,301.00 4,257.00 4,757.00 5,564.00 6,511.00 7,344.00 8,944.00 11,281.00 Population : Bank Branch 27,932.00 22,164.00 20,286.50 17,732.20 15,702.00 13,921.00 11,516.00 9,514.00 Number of Insurance Companies 17.00 18.00 (o/w Private Insurance Companies) 16.00 17.00 Number of Insurance Branches 426 492.00 532.00 568.00 605.00 635.00 690.00 741.00 Population : Insurance Branch 216,443.00 191,772.00 181,396.00 173,848.00 168,983.00 160,629.92 149,272.50 144,846.00 Number of Development Banks 1.00 1.00 1 Number of Development Bank Branches 110 110.00 107 107 93 82 83 83 Number of Micro-financial Institutions 35.00 35.00 38 38 39 39 43 47 Source : Ministries of Agriculture, Finance and Economic Development, Health, and Education, National Bank of Ethiopia, Centeral Statistical Authority, … etc Note:- *population is estimated using component method after 2006/2007

Excluding manpower out side the Ministry of Health.
The GDP data series is revised on basis of 2015/16 =100 base year
Inflation data is calculated using the new base year (December 2016=100)
Figures for government finance are preliminary estimates from 1999/00 onwards.
Inter-bank money market was first introduced in Aug.1998 and Inter-bank forex market started as of September 1998, and the daily trasactions introduced beginning from october 24, 2001. *Mid year population was obtained from MoFED Indicators Continued….

National Bank of Ethiopia Annual Report 2020/21. !e Ethiopian economy registered 6.3 percent growth in 2020/21which was, slightly higher than the 6.1 percent expansion in the previous year. !is growth was broad based with industry growing at 7.3 percent’, service 6.3 percent, and agriculture 5.6 percent. As a result, the share of industry in GDP increased slightly to 29.3 percent from 29.0 percent a year ago while that of service sector remained around 39.6 percent. In contrast, the share of agriculture to GDP dropped marginally to 32.5 percent from 32.7 percent over the same period. !is re%ects a gradual but steady shi& in the structure of the economy towards developing manufacturing sector and promoting export-led growth while continuing to give due attention to modernizing the agriculture sector which has dominated the country’s economy for decades in terms of employment, foreign exchange earnings, supply of raw materials and market for domestic industries. 2. In addition, the robust and sustained economic growth recorded over the last 15 years has led to improvement in income inequality and poverty reduction. Accordingly, per capita income has continuously increased and reached USD 1,092 in 2020/21. Investment to GDP ratio stood at 28.0 percent while that of domestic savings was 19.0 percent. 3. Despite NBE’s attempt to tight monetary stance, in%ation has remained o" the single digit target in the past four years. !e annual average headline in%ation slightly increased to 20.2 percent in 2020/21 from 19.9 percent a year earlier wholly due to the rise in non-food in%ation by 0.5 percentage point against a 0.1 percentage point decline in food in%ation. Meanwhile, annual headline in%ation rose to 24.6 percent from 21.5 percent, solely driven by 5.9 percentage point increase in food in%ation despite 0.6 percentage point slowdown in non-food in%ation. 4. Regarding #scal operations, the government has pursued prudent #scal policy that focused on increasing tax revenue by strengthening tax administration and covering a greater proportion of government expenditures from domestic resources. Meanwhile, government expenditures have largely been geared towards supporting GOVERNOR’S NOTE

National Bank of Ethiopia Annual Report 2020/21 2 capital expenditure and enhancing pro-poor social spending programs and safety nets. !us, domestic revenue registered a 21.2 percent annual growth while general government expenditure showed a 24.8 percent increment resulting in a budget de#cit equivalent to 2.8 percent of GDP which was lower than the 3 percent target. 5. As for forex developments, taking into account the country’s level of development, Ethiopia has continued to maintain managed %oat exchange rate regime to ensure external competitiveness. Accordingly, the Birr was allowed to depreciate by 24.5 percent in nominal terms against US Dollar during 2020/21 while the real e"ective exchange rate marginally appreciated by 0.3 percent as a result of rising domestic in%ation and appreciation of the Birr vis-à-vis the currencies of the trading partners. 6. !e Ethiopian #nancial sector has been broadly safe, sound, well capitalized and pro#table. In 2020/21, commercial banks opened 833 new branches which raised the total number of branches to 7,344 from 6,511 last year. !eir deposit mobilization surged by 30.3 percent, while loan collection rose 1.5 percent and loan disbursement 21.5 percent. !eir non-performing loan was within the required ceiling of 5 percent. Similarly, insurance companies and micro#nance institutions have scaled up their outreach by expanding their network and products. 7. Total merchandise exports saw a remarkable growth of 21.1 percent over the preceding #scal year mainly driven by earnings from co"ee, gold, %ower, chat, electricity, fruits & vegetables and meat & meat products. On the other hand, total merchandise import recorded a 2.9 percent slowdown solely due to a signi#cant growth in import of consumer goods mainly cereal and other foods. As a result, trade de#cit, as proportion of GDP, narrowed to 9.6 percent from 10.1 percent a year ago. Similarly, current account, including o$cial transfers, recorded a higher de#cit compared to past years. Capital account surplus has also moderately slowed down vis-à-vis the preceding year. Consequently, the overall balance of payments registered a surplus in contrast to a de#cit in the previous year. !us, the country’s gross international reserve was adequate to cover 2.2 months of import of goods and non-factor services of next #scal year. 8. To sum up, despite the challenges with respect to COVID-19 pandemic and the law enforcement measures in Northern part of the country, the Ethiopian economy remained resilient showing robust growth in 2020/21. Looking ahead, the economic performance in 2021/22 is envisaged to be more positive supported mainly by improved macroeconomic stability, conducive weather condition and friendly investment policies despite some perceived down side risks including volatile export commodity prices and in%ation pressure. Similarly, the e"ective implementation of the three year “Home Grown Economic Reform Program” and attending policy measures is expected to contribute towards developing a modern, vibrant, competitive and sound #nancial system, and enhanced access to #nancial services and #nancial inclusion which will ultimately lead to poverty reduction and inclusive economic growth and development. 9. Finally, in light of the planned achievements during the review #scal year, I would like to congratulate all members of the NBE management and sta"s for their unrelenting commitment in realizing the strategic objectives of the Bank and in contributing to the country’s overall macroeconomic stability and growth. I am also convinced that they will continue to exert their e"orts to achieve more results for the socio-economic development and sound living standards of our society in the coming FY 2021/22 and beyond.

17 THE OVERALL ECONOMIC PERFORMANCE

National Bank of Ethiopia Annual Report 2020/21 4 1.1. Economic Growth The Ethiopian economy continued to register growth in 2020/21 amid the instability in northern part of the country and the impact of COVID-19 pandemic. During the review ¿VFDO \HDU UHDO *'3 VKRZHG D SHUFHQW growth, slightly higher than the 6.1 percent growth last year. The growth of real GDP was 3.7 percentage point lower than the average growth rate target set in the Ten Years Development Plan, EXW VLJQL¿FDQWO\ KLJKHUWKDQWKH SHUFHQW growth estimate of the Sub - Saharan African countries (IMF and WEO Update, June 2020). The growth of real GDP in 2020/21 was attributed to the growth of industry (7.3 percent), services (6.3 percent) and agriculture (5.5 percent). Nominal GDP per capita stood at USD 1,092, depicting a 1.1 percent marginal improvement relative to the previous year (Table 1.1). The growth of the Ethiopian economy is projected at 8.7 percent in 2021/22 compared to 4.9 percent growth forecast for the world and 3.8 percent for Sub-Saharan Africa economies (IMF,WEO, October 2021). I. THE OVERALL ECONOMIC PERFORMANCE

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National Bank of Ethiopia Annual Report 2020/21 6 Fig.I.1: Real GDP Growth by Major Sectors (in Percent) National Bank of Ethiopia 3 | 2020/21 Annual Report Fig.I.1: Real GDP Growth by Major Sectors (in Percent) Source: Planning and Development Commission Meanwhile, agriculture grew by 5.5 percent in 2020/21, higher than the 4.3 percent growth recorded in the previous year mainly due to improvement in crop production, animal farming and hunting. In 2020/21, total grain production amounted to 341.8 million quintals depicting a 2 percent annual increment. Of the total crop production was cereal production, 9.4 percent pulses and 2.3 percent oil seeds. Cereals and pulses production increased by 1.8 and 6.5 percent partly on account of 0.6 and 7.1 percent expansion in cultivated land areas, respectively. However, the production of oilseeds showed 7.7 percent contraction owing to 6.6 percent a decline in cultivated land area (Table 1.2). The total land cultivated area for crop production reached 13.0 million hectares, of which cereals production accounted for 81.2 percent, pulses 12.9 percent and oil seeds 5.9 percent (Table 1.2). 0.0 5.0 10.0 15.0 20.0 25.0 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Agriculture Industry Service Real GDP

Meanwhile, agriculture grew by 5.5 percent in 2020/21, higher than the 4.3 percent growth recorded in the previous year mainly due to improvement in crop production, animal farming and hunting. In 2020/21, total grain production amounted to 341.8 million quintals depicting a 2 percent annual increment. Of the total crop production was cereal production, 9.4 percent pulses and 2.3 percent oil seeds. Cereals and pulses production increased by 1.8 and 6.5 percent partly on account of 0.6 and 7.1 percent expansion in cultivated land areas, respectively. However, the production of oilseeds showed 7.7 percent contraction owing to 6.6 percent a decline in cultivated land area (Table 1.2). The total land cultivated area for crop production reached 13.0 million hectares, of which cereals production accounted for 81.2 percent, pulses 12.9 percent and oil seeds 5.9 percent (Table 1.2). Source: Planning and Development Commission

National Bank of Ethiopia Annual Report 2020/21 7 Table 1.2: Estimates of Agricultural Production and Cultivated Areas of Major Grain Crops for Private Peasant Holdings-Meher Season [Area and production are in thousands of hectars and quintals, respectively] During 2021, the share of agriculture in GDP declined to 32.5 percent while its contribution to GDP growth improved to 29 percent compared to the preceding year (Table 1.1). Crop production had a lion’s share in agriculture accounting for 65.1 percent where animal farming & hunting and forestry had a 26 percent and 8.6 percent respective share. While crop production showed a 5.7 percent growth, animal farming & hunting and forestry registered 5.8 and 3.9 percent expansion, respectively (Table 1.3). Industrial sector showed a 7.3 percent annual growth and constituted a 29.3 percent share in total GDP and it contributed 33.6 percent to the overall GDP growth (Table1.1). With 5.1 percent growth, the manufacturing accounted for 23.4 percent of the industrial output. Construction industry registered 6.6 percent expansion with 72.2 percent share in industrial output, with roads, railways, dams and residential houses construction, playing a sigQL¿FDQWUROH The growth momentum in mining and quarrying sector continued in 2020/21 and saw a 115.4 percent expansion partly due to the conducive policy measures taken by the National Bank of Ethiopia to incentivize the miners to opt for more formal marketing channels. Yet, its contribution to industrial production is still minimal (1.8 percent). Meanwhile, electricity & water had a 2.7 percent share in industrial production (Table1.3). Service sector continued to dominate the economy in 2020/21 as its share in GDP stood at 39.6 percent and its contribution to the GDP growth was 38.3 percent (Table 1.1). The 6.3 percent growth in service sector was largely attributed to the expansion of real estate, renting & business activities (8.9 percent), transport & communication (7.0 percent), wholesale & retail trade (6.3 percent), other services (6.2 percent), public administration & defense (4.9 percent) and hotels & restaurants (2.6 percent) (Table 1.3). National Bank of Ethiopia 4 | 2020/21 Annual Report Table 1.2: Estimates of Agricultural Production and Cultivated Areas of Major Grain Crops for Private Peasant Holdings-Meher Season [Area and production are in thousands of hectars and quintals, respectively] Agricultural Production 2017/18 2018/19 2019/20 2020/21 Cultivated Area Total Production Cultivated Area Total Production Cultivated Area Total Production Cultivated Area Total Production Cereals 10,232 267,789 10,358 277,638 10,478 296,726 10,538 302,054 (Annual % Change) 0.1 5.5 1.2 3.7 1.2 6.9 0.6 1.8 Pulses 1,598 29,785 1,620 30,113 1,563 30,051 1,674 32,000 (Annual % Change) 3.1 5.8 1.4 1.1 -3.5 -0.2 7.1 6.5 Oilseeds 846 8,550 747 7,850 820 8,421 766 7,774 (Annual % Change) 5.1 1.9 -11.7 -8.2 9.8 7.3 -6.6 -7.7 Total 12,676 306,124 12,727 315,602 12,862.0 335,199 12,979 341,829 (Annual % Change) 0.8 5.4 0.4 3.1 1.1 6.2 0.9 2.0 Source: Central Statistical Agency (CSA)

National Bank of Ethiopia Annual Report 2020/21 8 Table 1.3: Growth and Percentage Distribution of Major Agricultural, Industrial and Service Sub-sectors Source: Planning and Development Commission

,QFOXGHV¿QDQFLDOLQWHUPHGLDWLRQHGXFDWLRQKHDOWKDQGVRFLDOZRUNSULYDWHKRXVHKROGVZLWKHPSOR\HGSHUVRQV and other community, social and personal services. National Bank of Ethiopia 6 | 2020/21 Annual Report Table 1.3: Growth and Percentage Distribution of Major Agricultural, Industrial and Service Sub-sectors Sectors 2016/17 2017/18 2018/19 2019/20 2020/21 Agriculture Growth rate Crop 8.2 4.7 3.0 4.7 5.7 Animal Farming and Hunting 4.2 0.6 6.0 3.3 5.8 Forestry 3.6 3.5 3.8 3.9 3.9 Fishing 0.5 11.3 2.3 2.8 1.7 Share in Agriculture Crop 64.5 65.3 64.8 65.0 65.1 Animal Farming and Hunting 26.4 25.6 26.2 25.9 26.0 Forestry 8.8 8.6 Fishing 0.2 0.3 0.2 Industry Growth rate Mining and Quarrying -29.8 -20.8 -21.9 91.4 115.4 Manufacturing 24.7 5.5 7.7 7.5 5.1 Electricity and Water 4.9 3.3 4.0 7.2 8.9 Construction 20.7 15.7 15.0 9.9 6.6 Share in Industry Mining and Quarrying 1.0 0.7 0.5 0.9 1.8 Manufacturing 26.9 25.3 24.3 23.9 23.4 Electricity and Water 2.8 2.6 2.7 2.6 2.7 Construction 69.3 71.4 72.5 72.6 72.2 Growth rate Whole Sale and Retail Trade 6.5 12.3 11.7 6.4 6.3 Hotels and Restaurants 0.1 6.5 9.0 2.2 2.6 Service Transport and Communications 15.1 6.4 21.0 1.2 7.0 Real Estate, Renting and Business Activities 4.4 6.2 7.5 9.5 8.9 Public Administration and Defense 13.2 8.9 9.0 2.3 4.9 Others* 6.4 6.8 7.5 6.4 6.2 Share in Service Whole Sale and Retail Trade 34.8 35.9 35.9 36.3 36.3 Hotels and Restaurants 6.7 6.6 6.5 6.3 6.0 Transport and Communications 13.1 12.8 14.0 13.4 13.5 Real Estate, Renting and Business Activities 11.3 11.0 10.7 11.1 11.4 Public Administration and Defense 11.4 11.4 11.2 10.9 10.7 Others* 22.7 22.3 21.7 22.1 22.0 Source: Planning and Development Commission

Includes: financial intermediation, education, health and social work, private households with employed persons and other community, social and personal services.

National Bank of Ethiopia Annual Report 2020/21 9 Total consumption expenditure (public and private) to GDP ratio rose marginally to 81.0 percent in 2020/21 compared to 79.2 percent last year wholly on account of 2.2 percentage point increase in private consumption expenditure vis-a-vis 0.3 percentage point decline in public consumption expenditure. As a result, gross domestic saving to GDP ratio contracted to 19.0 percent from 20.8 percent (Table 1.4). Domestic saving showed 17.1 percent increment, while total consumption expenditure exhibited 31.7 percent expansion. Meanwhile, gross capital formation accounted for 28 percent of GDP, depicting 2.6 percentage point short fall from the previous year. Similarly, domestic absorption to GDP ratio stood at 109.1 percent. Table: 1.4: Expenditure on GDP and Gross Domestic Savings (Percentage of GDP) Source: Planning and Development Commission 1.2. GDP by Expenditure Components National Bank of Ethiopia 8 | 2020/21 Annual Report Table: 1.4: Expenditure on GDP and Gross Domestic Savings (Percentage of GDP) Year Domestic Absorption Consumption Expenditure Gross Capital Formation Resource Balance Exports of Goods & Services Imports of Goods & Services Gross Domestic Total Govt. Pvt. Savings 2005/06 119.6 88.9 17.9 71.0 30.7 (22.0) 13.4 35.3 11.1 2006/07 111.3 84.3 15.4 69.0 27.0 (18.7) 12.3 31.0 15.7 2007/08 114.1 86.9 14.3 72.5 27.3 (18.8) 11.0 29.8 13.1 2008/09 113.6 85.9 13.0 72.9 27.7 (17.6) 10.2 27.8 14.1 2009/10 116.3 86.2 12.6 73.6 30.1 (18.7) 13.2 31.9 13.8 2010/11 113.8 82.7 11.8 70.9 31.1 (14.5) 16.3 30.7 17.3 2011/12 116.4 80.4 9.5 71.0 36.0 (17.4) 13.4 30.8 19.6 2012/13 115.2 82.2 10.2 71.9 33.0 (16.1) 12.2 28.2 17.8 2013/14 116.2 79.3 10.6 68.8 36.8 (17.0) 11.3 28.4 20.7 2014/15 116.1 77.9 10.3 67.6 38.2 (20.4) 9.1 29.5 22.1 2015/16 115.0 77.6 11.1 66.5 37.3 (19.3) 7.8 27.1 22.4 2016/17 116.1 77.6 11.1 66.5 38.4 (15.8) 7.6 23.5 22.4 2017/18 109.8 75.7 10.2 65.5 34.1 (14.4) 8.4 22.8 24.3 2018/19 112.9 77.7 9.2 68.5 35.2 (12.9) 7.9 20.8 22.3 2019/20 109.8 79.2 9.1 70.0 30.6 (9.8) 7.1 16.9 20.8 2020/21 109.1 81.0 8.8 72.2 28.0 (9.1) 7.6 16.7 19.0 Average 2016/17- 2020/21 111.5 78.3 9.7 68.6 33.3 (12.4) 7.7 20.1 21.7 Average 2011/12- 2020/21 113.6 78.9 10.0 68.9 34.8 (15.2) 9.2 24.5 21.1 Source: Planning and Development Commission

National Bank of Ethiopia Annual Report 2020/21 10 A total of 115,200 micro and small scale enterprises (MSEs) employing about 585.1 thousand people and receiving more than Birr 5 billion in loans for running their businesses were operating in 2020/2021. Table 1.5: Numbers, Amount of Credit and Jobs Created through MSEs (Credit in Millions of Birr) Particulars 2018/19 2019/20 2020/21 No. of MSE’s 110,253 111,547 115,200 Amount of credit 7,311.8 7,670.7 5,016.2 No of total employment 882,098 1,569,163 585,119 Source: Federal Urban Job Creation and Food Security Agency (FeUJCFSA) In terms of regional distribution, 39.9 percent of the MSEs were located in Oromia followed by Amhara (34.5 percent), SNNPR (7.2 percent), Addis Ababa (6.7 percent), Sidama (6.5 percent) and Somali (3 percent) regional states. With respect to total loans, SMEs in Amhara received 34 percent, Addis Ababa 25.7 percent, Oromia 22 percent, SNNPR 11.7 percent, Sidama & Dire Dawa 2.4 percent each. Of the total jobs created by these enterprises, 49.4 percent was in Oromia, 20.8 percent in Amhara, 11.3 percent in SNNPR, 6.4 percent in Sidama, 6.1 percent in Addis Ababa and 2.8 percent in Somali. (Table 1.6) 1.3. Micro and Small-Scale Enterprises

National Bank of Ethiopia Annual Report 2020/21 11 Table 1.6: Number of MSEs, Amount of Credit and Jobs Created through MSEs by Region (Credit in Millions of Birr) Addis Ababa Oromia SNNPR Amhara Sidama Dire Dawa Harari Benishangul Somali Gambela Tigray Afar Total No. of MSEs 7,667 45,989 8,264 39,699 7,468 492 291 429 3,480 1,131 - 290 115,200 Amount of credit 1,291.5 1,105.1 588.1 1,704.5 119.8 120.2 19.7 3.3 61.2 3.0 - - 5,016.2 No. of total Employment created by MSEs 35,740 289,015 66,376 121,970 37,347 1,810 810 2,128 16,220 5,119 - 8,584 585,119 Regional Percentage Share No. of MSEs 6.7 39.9 7.2 34.5 6.5 0.4 0.3 0.4 3.0 1.0 - 0.3 100 Amount of credit 25.7 22.0 11.7 34.0 2.4 2.4 0.4 0.1 1.2 0.1 - - 100 No. of total Employment created by MSEs 6.1 49.4 11.3 20.8 6.4 0.3 0.1 0.4 2.8 0.9 - 1.5 100 Source: FeUJCFSA

National Bank of Ethiopia Annual Report 2020/21 12 Fig.I.2: Number of Distribution of MSEs by region during 2020/21 '6I>DC6A6C@D;I=>DE>6 O BBI5@+9DCFH =;"'IA69FC: =GHF=6IH=CBC:&,G6MF9;=CB 8IF=B; ,CIF799.#, =;"BBI5@F98=H =GHF=6IH=CB6MF9;=CB =B ,CIF799.#, Source: FeUJCFSA Fig.I.3: Annual Credit Distribution by region in 2020/21 '6I>DC6A6C@D;I=>DE>6 O BBI5@+9DCFH =;"'IA69FC: =GHF=6IH=CBC:&,G6MF9;=CB 8IF=B; ,CIF799.#, =;"BBI5@F98=H =GHF=6IH=CB6MF9;=CB =B ,CIF799.#, Source: FeUJCFSA

National Bank of Ethiopia Annual Report 2020/21 13 Fig.I.4: Distribution of Employment Created by MSEs during 2020/21 '6I>DC6A6C@D;I=>DE>6 O BBI5@+9DCFH =;"=GHF=6IH=CBC:AD@CMA9BHF95H986M&,GIF=B; ,CIF799.#, Source: FeUJCFSA 1.4. Access to Water Supply During 2020/21, the proportion of people having access to potable water supply increased by 2 percentage point to 58.5 percent (57.3 percent rural and 63 percent urban population) relative to 56.5 percent (54.9 percent rural and 63.2 percent urban people) coverage a year ago. In other words, urban areas had relatively better access than the rural areas (Table 1.7). In terms of regional states, Dire Dawa had 84.9 percent of people with access to potable water followed by Harari (76.5 percent), Gambella (75.8 percent), Amahara (69.5 percent), Benishangul Gumuz (64.3 percent), Addis Ababa (62.6 percent), Tigray (60.7 percent), Oromia (60.4 percent), Afar (58.8 percent), SNNPR (48.2 percent) and Somali (33.2 percent). Looking at regional Urban areas’ access to potable water, Dire Dawa had 95.4 percent, Gambella 77.6 percent, Tigray 69 percent, Amhara 67.1 percent, Afar 65.2 percent Oromia 64.0 percent, Addis Ababa 62.6 percent), Benishangul Gumuz 58.0 percent, SNNPR 55.6 percent, Somali 51.8 percent, and Harari 41.4 percent. In terms of access to potable water in rural areas, Harari registered the highest (94.0 percent) followed by Gambella (74.8 percent), Amahara (70.1 percent), Dire Dawa (66.5 percent), Benshangul Gumuz (66.3 percent), Oromia 59.5 percent, Tigray (57.2 percent), Afar (57.1 percent), SNNPR (46.7 percent) and Somali (29.9 percent) (Table 1.7).

National Bank of Ethiopia Annual Report 2020/21 14 Table 1.7: Percentage of People with Access to Potable Water by Regio Source: Ministry of Water, Irrigation and Energy and NBE Staff Computation1 Fig.I.5: Access to Water Supply by Region in 2020/21 (in percent) '6I>DC6A6C@D;I=>DE>6 O BBI5@+9DCFH =;"779GGHC05H9F,IDD@M6M+9;=CB=B =BD9F79BH ,CIF79&=B=GHFMC:05H9F "FF=;5H=CB5B8B9F;M5B8',H5::CADIH5H=CB

Source: Ministry of Water, Irrigation and Energy; and NBE Staff Computation National Bank of Ethiopia 14 | 2020/21 Annual Report Table 1.7: Percentage of People with Access to Potable Water by Region Regions 2019/20 2020/21 Rural Urban Change in percentage point Total Rural Urban Total A B C D E F D-A E-B F-C Tigray1 57.51 72.46 61.76 57.21 68.98 60.66 -0.3 -3.5 -1.1 Afar 57.13 63.42 58.41 57.05 65.23 58.77 -0.1 1.8 0.4 Amhara 69.11 67.52 68.81 70.08 67.06 69.50 1.0 -0.5 0.7 Oromia 55.40 67.10 56.90 59.51 64.00 60.35 4.1 -3.1 3.4 SNNPR 45.29 52.54 46.55 46.65 55.55 48.24 1.4 3.0 1.7 Somali 26.58 35.84 27.95 29.93 51.79 33.18 3.4 16.0 5.2 B.Gumuz 64.10 58.07 62.72 66.29 58.03 64.34 2.2 0.0 1.6 Gambella 72.05 80.80 75.17 74.79 77.55 75.80 2.7 -3.2 0.6 Harari 94.00 42.54 65.00 94.00 41.40 76.54 0.0 -1.1 11.5 D. Dawa 67.96 98.43 87.31 66.49 95.38 84.90 -1.5 -3.0 -2.4 AA 63.72 63.72 62.59 62.59 - -1.1 -1.1 Total 54.87 63.20 56.54 57.26 62.95 58.5 2.4 -0.2 2.0 Source: Ministry of Water, Irrigation and Energy and NBE Staff Computation2 1 Estimated based on 2019/20 data 2 Calculated and revised based on second water supply inventory. National Bank of Ethiopia 14 | 2020/21 Annual Report Table 1.7: Percentage of People with Access to Potable Water by Region Regions 2019/20 2020/21 Rural Urban Change in percentage point Total Rural Urban Total A B C D E F D-A E-B F-C Tigray1 57.51 72.46 61.76 57.21 68.98 60.66 -0.3 -3.5 -1.1 Afar 57.13 63.42 58.41 57.05 65.23 58.77 -0.1 1.8 0.4 Amhara 69.11 67.52 68.81 70.08 67.06 69.50 1.0 -0.5 0.7 Oromia 55.40 67.10 56.90 59.51 64.00 60.35 4.1 -3.1 3.4 SNNPR 45.29 52.54 46.55 46.65 55.55 48.24 1.4 3.0 1.7 Somali 26.58 35.84 27.95 29.93 51.79 33.18 3.4 16.0 5.2 B.Gumuz 64.10 58.07 62.72 66.29 58.03 64.34 2.2 0.0 1.6 Gambella 72.05 80.80 75.17 74.79 77.55 75.80 2.7 -3.2 0.6 Harari 94.00 42.54 65.00 94.00 41.40 76.54 0.0 -1.1 11.5 D. Dawa 67.96 98.43 87.31 66.49 95.38 84.90 -1.5 -3.0 -2.4 AA 63.72 63.72 62.59 62.59 - -1.1 -1.1 Total 54.87 63.20 56.54 57.26 62.95 58.5 2.4 -0.2 2.0 Source: Ministry of Water, Irrigation and Energy and NBE Staff Computation2 1 Estimated based on 2019/20 data 2 Calculated and revised based on second water supply inventory.

National Bank of Ethiopia Annual Report 2020/21 15 The education sector has been improving in terms of coverage during the last few years ZKRVH REMHFWLYHVDUH SURGXFLQJHI¿FLHQWHIfective and innovative citizens which can contribute to the realization of the country’s vision to become a middle income country by 2025. During 2020/21, primary and middle school education (1-8 grades) enrolments went down from 20.4 million in 2019/20 to 18.4 million in 2020/21; depicting a 9.8 percent decline FRPSDUHGWRODVW\HDUDVDUHVXOWRIFRQÀLFWLQ northern part of the country, hence, the curUHQW¿VFDO\HDUUHSRUWGRHVQRWLQFOXGHGDWDRQ Tigray region. The number of primary schools in 2020/21 reached 35,980; out of this 30,038 (83.5 percent) were located in rural areas and 3,612 (10 percent) in urban centers. On the other hand, secondary education enrolment showed improvement by 2.1 percent relative to last year and reached to 3.5 million. By the end of 2020/21 the number of secondary schools reached 3,481 exhibiting a 5.6 percent decline over the previous year. The technical & vocational education and training (TVET) enrolment was 283,968; depicting 26.6 percent decrement against the previous year. In 2020/21 there were 1,602 TVET institutions in the country under both government and non-government ownership. Education share of the annual government expenditure was 25.7 percent which was slightly higher than the preceding year by 0.7 percentage point. 1.5. Developments in Education Sector

National Bank of Ethiopia Annual Report 2020/21 16 Table 1.8: Education Sector Data National Bank of Ethiopia 17 Table 1.8: Education Sector Data Indicators 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2007 2008 2009 2010 2011 2012 2013 Number of primary schools (urban, rural) & including others 33,373 34,867 35,887 36,437 37,039 37,742 35,980 i Urban 4,769 24,985 5,185 5,504 5,799 5,305 3,612 ii. Rural 28,604 29,856 30,654 30,933 31,188 31,586 30,038 Number of secondary schools(urban, rural ) & including others 2,830 3,156 3,380 3,589 3,739 3,687 3,481 i. Urban 1,891 1,973 20,53 2,171 2,247 1,938 1,379 ii. Rural 939 1,178 1,321 1,418 1,490 1,525 1,770 No of TVET centers (public, private, mission) 919 1,567 1,568 1,602 Number of tertiary level institutions (public, private) 171 172 171 177 227 329 332 Universities 33 37 37 49 50 55 56 Participation of women in higher education institutions (%) 35 34.1 34.9 34.1 35.5 39.7 45.5 Primary enrolment (in millions) 18.7 20.0 20.8 20.7 20.04 20.4 18.4 Secondary enrolment (in thousands) 2,108 2,421 2,559 2,666 2,820 3,466 3,540 TVET enrolment 265,745 304,139 302,083 292,378 317,727 386,811 283,968 Middle school (Grade 7-8) enrolment 66.3 71.11 74.4 80 79.8 81.8 70.0 a. Girls' gross enrolment ratio (%) 64.8 68.9 71.4 75.4 76.2 78.5 72.2 b. Boys' gross enrolment ratio (%) 67.8 73.3 77.3 82.7 83.2 84.9 67.8 Gross primary (Grade 1-6) enrolment ratio (%) 104 108.7 111.4 109.3 104.64 104.9 102.6 a. Girls' gross enrolment ratio (%) 99.5 103.5 105.7 103.5 99.23 99.8 97.3 b. Boys' gross enrolment ratio (%) 108.5 113.7 117 115 109.93 109.9 107.8 Tigray 118.8 114.1 116.7 117.5 112.94 108.6 Not collected Afar 70.3 66.2 66.0 59.5 56.90 53.6 64.4 Amhar 110.3 111.6 112.1 107.7 102.46 96 88.0 Oromia 94.8 104.3 106.2 107.2 106.21 107.9 113.8 Somali 91.7 95.9 91.3 95.6 84.13 90.4 100 Ben.Gumuz 107.0 109.6 117.8 119.2 114.40 110.6 110.7 National Bank of Ethiopia 18 | Annual Report 20 20/ 21 Indicators 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2007 2008 2009 2010 2011 2012 2013 SNNPR 108.4 115.5 123.9 116.7 106.50 111.5 92.4 Gambella 151.4 154.4 150.3 145.7 148.27 156.6 169.3 Harari 101.8 107.9 110.7 110.8 121.30 130 135.9 A.A 150.6 146.3 138.8 134.9 135.02 132.7 112.8 Dire Dawa 67.5 70.2 108.6 105.8 110.43 110.5 116.1 Primary net enrolment rate (%) 94.3 100.3 99.9 100.05 94.7 95.3 86.4 No. of students registered in the primary schools(1-6) (in millions) 12.8 13.6 13.5 13.5 12.7 12.8 15.3 No. of students registered in the middle schools(7-8) (in millions) 5.9 6.4 7.3 7.2 7.3 7.6 3.1 Number of students registered in the secondary schools (9-12) (in millions) 2.6 2.7 2.8 3.5 3.5 Completion rate of primary School (%) 51.3 54.3 54.1 57.7 62.1 71 69.8 Girls/boys ratio in primary schools (%) 89.8 89 88.4 88.1 88.1 88.6 89.1 Girls/boys ratio in secondary schools (%) 89.9 89.7 88.4 86.4 84.7 85 90.4 Girls/boys ratio in TVET (%) 109.7 108.1 105.4 103.4 81.8 50.5 49.5 Girls/boys ratio in higher education (%) 49.9 51.8 55.6 51.8 52.1 53 54 Grade 1-8(primary) repetition rates (%) 7.3 6.7 7.2 5.3 4.1 5 4 Primary school dropout rate (%) 9.9 10.1 11.7 11.1 17.5 13.9 14.5 1st grade dropout rate (%) 23.9 19 16.8 19.5 25 22 25.8 Pupil to teacher ratio i. Grade (1-8) 46 46 43 43 39 39 34.8 ii. Grade (9-12) 26.4 26.5 26 26 22.5 24 27.4 iii. TEVT 16.5 12.6 11A9 15 13.3 13.3 11.0 iv. In higher education 26.4 20.1 13.3 17 20.3 30 30 Pupil to Section Ratio i. Grade (1-8) 54 55 43 56 53 52.5 43.7 ii. Grade (9-12) 57 54 57 56 49.7 64.3 47.5 Number of class rooms in primary schools 3,41086 365,530 457,309 380,979 502,738 379,601 422,139 Pupil to Textbook Ratio i. Grade(1-8) 4.2 3.8 4.2 4.1 4 4 NA ii. Grade(9-12) 13 11.8 10.3 12 10.9 9 7.9 Pupil to School Ratio i. Grade(1-8) 573 580 567 628 628 528 512.7 ii. Grade(9-12) 767.2 754 741 568 940 1017 iii. TEVT 383 331 329 318 246.8 NA NA Proportion of pupils starting grade 1 who reach grade 5(%) 55.75 56.5 53.5 53 53 54 NA Percentage of female enrolled in under graduate degree (%) 34.7 34.1 35.7 36 37 37.8 37.5

National Bank of Ethiopia Annual Report 2020/21 17 National Bank of Ethiopia 17 Table 1.8: Education Sector Data Indicators 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2007 2008 2009 2010 2011 2012 2013 Number of primary schools (urban, rural) & including others 33,373 34,867 35,887 36,437 37,039 37,742 35,980 i Urban 4,769 24,985 5,185 5,504 5,799 5,305 3,612 ii. Rural 28,604 29,856 30,654 30,933 31,188 31,586 30,038 Number of secondary schools(urban, rural ) & including others 2,830 3,156 3,380 3,589 3,739 3,687 3,481 i. Urban 1,891 1,973 20,53 2,171 2,247 1,938 1,379 ii. Rural 939 1,178 1,321 1,418 1,490 1,525 1,770 No of TVET centers (public, private, mission) 919 1,567 1,568 1,602 Number of tertiary level institutions (public, private) 171 172 171 177 227 329 332 Universities 33 37 37 49 50 55 56 Participation of women in higher education institutions (%) 35 34.1 34.9 34.1 35.5 39.7 45.5 Primary enrolment (in millions) 18.7 20.0 20.8 20.7 20.04 20.4 18.4 Secondary enrolment (in thousands) 2,108 2,421 2,559 2,666 2,820 3,466 3,540 TVET enrolment 265,745 304,139 302,083 292,378 317,727 386,811 283,968 Middle school (Grade 7-8) enrolment 66.3 71.11 74.4 80 79.8 81.8 70.0 a. Girls' gross enrolment ratio (%) 64.8 68.9 71.4 75.4 76.2 78.5 72.2 b. Boys' gross enrolment ratio (%) 67.8 73.3 77.3 82.7 83.2 84.9 67.8 Gross primary (Grade 1-6) enrolment ratio (%) 104 108.7 111.4 109.3 104.64 104.9 102.6 a. Girls' gross enrolment ratio (%) 99.5 103.5 105.7 103.5 99.23 99.8 97.3 b. Boys' gross enrolment ratio (%) 108.5 113.7 117 115 109.93 109.9 107.8 Tigray 118.8 114.1 116.7 117.5 112.94 108.6 Not collected Afar 70.3 66.2 66.0 59.5 56.90 53.6 64.4 Amhar 110.3 111.6 112.1 107.7 102.46 96 88.0 Oromia 94.8 104.3 106.2 107.2 106.21 107.9 113.8 Somali 91.7 95.9 91.3 95.6 84.13 90.4 100 Ben.Gumuz 107.0 109.6 117.8 119.2 114.40 110.6 110.7 National Bank of Ethiopia 18 | Annual Report 20 20/ 21 Indicators 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2007 2008 2009 2010 2011 2012 2013 SNNPR 108.4 115.5 123.9 116.7 106.50 111.5 92.4 Gambella 151.4 154.4 150.3 145.7 148.27 156.6 169.3 Harari 101.8 107.9 110.7 110.8 121.30 130 135.9 A.A 150.6 146.3 138.8 134.9 135.02 132.7 112.8 Dire Dawa 67.5 70.2 108.6 105.8 110.43 110.5 116.1 Primary net enrolment rate (%) 94.3 100.3 99.9 100.05 94.7 95.3 86.4 No. of students registered in the primary schools(1-6) (in millions) 12.8 13.6 13.5 13.5 12.7 12.8 15.3 No. of students registered in the middle schools(7-8) (in millions) 5.9 6.4 7.3 7.2 7.3 7.6 3.1 Number of students registered in the secondary schools (9-12) (in millions) 2.6 2.7 2.8 3.5 3.5 Completion rate of primary School (%) 51.3 54.3 54.1 57.7 62.1 71 69.8 Girls/boys ratio in primary schools (%) 89.8 89 88.4 88.1 88.1 88.6 89.1 Girls/boys ratio in secondary schools (%) 89.9 89.7 88.4 86.4 84.7 85 90.4 Girls/boys ratio in TVET (%) 109.7 108.1 105.4 103.4 81.8 50.5 49.5 Girls/boys ratio in higher education (%) 49.9 51.8 55.6 51.8 52.1 53 54 Grade 1-8(primary) repetition rates (%) 7.3 6.7 7.2 5.3 4.1 5 4 Primary school dropout rate (%) 9.9 10.1 11.7 11.1 17.5 13.9 14.5 1st grade dropout rate (%) 23.9 19 16.8 19.5 25 22 25.8 Pupil to teacher ratio i. Grade (1-8) 46 46 43 43 39 39 34.8 ii. Grade (9-12) 26.4 26.5 26 26 22.5 24 27.4 iii. TEVT 16.5 12.6 11A9 15 13.3 13.3 11.0 iv. In higher education 26.4 20.1 13.3 17 20.3 30 30 Pupil to Section Ratio i. Grade (1-8) 54 55 43 56 53 52.5 43.7 ii. Grade (9-12) 57 54 57 56 49.7 64.3 47.5 Number of class rooms in primary schools 3,41086 365,530 457,309 380,979 502,738 379,601 422,139 Pupil to Textbook Ratio i. Grade(1-8) 4.2 3.8 4.2 4.1 4 4 NA ii. Grade(9-12) 13 11.8 10.3 12 10.9 9 7.9 Pupil to School Ratio i. Grade(1-8) 573 580 567 628 628 528 512.7 ii. Grade(9-12) 767.2 754 741 568 940 1017 iii. TEVT 383 331 329 318 246.8 NA NA Proportion of pupils starting grade 1 who reach grade 5(%) 55.75 56.5 53.5 53 53 54 NA Percentage of female enrolled in under graduate degree (%) 34.7 34.1 35.7 36 37 37.8 37.5 National Bank of Ethiopia 19 | Annual Report 20 20/ 21 Indicators 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2007 2008 2009 2010 2011 2012 2013 Percentage of female graduated in undergraduate degree (%) 28.5 33.4 31.3 33.2 35.8 NA 38 Percentage of female enrolled in postgraduate degree 23.8 23.1 17.8 16.6 18.1 10 20.2 Percentage of female graduated in postgraduate degree 16.7 18.9 18.3 17.6 20.0 NA 24.7 Annual education share of the national expenditure{%} 24.9 24.3 26.1 25 24.9 25.0 25.7 Note: a. The previously classification of Primary Education in Ethiopia which consists grades (1to 8), and was implemented in two cycles, Primary 1st cycle (Grades 1-4), and Primary 2nd cycle (Grades 5-8). Based on the new education road map, since 2020/21 the classification system has been changed to Primary (Grades 1-6) and Middle school (Grades 7-8). b. Following the current conflict in the northern part of Ethiopia, the report does not include Tigray region. 1.7. Telecommunication Telecommunication is one of the prime infrastructure services needed for rapid economic growth and modernization as it has a significant impact in attracting investment, creating market opportunities, enhancing competitiveness and boosting regional economic integration. Cognizant of this fact, the Ethiopian government has made huge investment in telecom sector, focusing on improving quality of service, expansion of service coverage and enhancing institutional capacity. This policy measure has enhanced the capacity of Ethio-Telecom in terms of customer acquisition, customer satisfaction and provision of quality services to customers. Accordingly, the total number of subscribers has reached 56.2 million in 2020/21 depicting a 21.9 percent annual expansion a owing to a 22 percent rise in mobile voice and 52.3 percent increase in internet & data subscribers despite a 6.8 percent decline in fixed voice service subscribers. Of the total subscribers, mobile voice subscribers accounted for 96.6 percent followed by internet & data 1.8 percent and fixed voice service 1.6 percent. (Table 1.13)

National Bank of Ethiopia Annual Report 2020/21 18 1.6. Telecommunication Telecommunication is one of the prime infrastructure services needed for rapid economic JURZWKDQGPRGHUQL]DWLRQDVLWKDVDVLJQL¿- cant impact in attracting investment, creating market opportunities, enhancing competitiveness and boosting regional economic integration. Cognizant of this fact, the Ethiopian government has made huge investment in telecom sector, focusing on improving quality of service, expansion of service coverage and enhancing institutional capacity. This policy measure has enhanced the capacity of Ethio-Telecom in terms of customer acquisition, customer satisfaction and provision of quality services to customers. Accordingly, the total number of subscribers has reached 56.2 million in 2020/21 depicting a 21.9 percent annual expansion a owing to a 22 percent rise in mobile voice and 52.3 percent increase in internet & data subscribHUVGHVSLWHDSHUFHQWGHFOLQHLQ¿[HGYRLFH service subscribers. Of the total subscribers, mobile voice subscribers accounted for 96.6 percent followed E\LQWHUQHW GDWDSHUFHQWDQG¿[HGYRLFH service 1.6 percent. (Table 1.13) Table 1.9: Number of Subscribers (In 000’) National Bank of Ethiopia 20 | Annual Report 20 20/ 21 Table 1.13: Number of Subscribers (In 000’) Service Type 2019/20 2020/21 Percentage Change Total subscriber base 46,154 56,246 21.9 Mobile voice subscriber 44,515 54,329 22.0 Internet and data subscriber 660 1,005 52.3 Fixed voice service subscriber 979 912 -6.8 Internet and data user 23,799 24,923 4.7 Mobile voice 44,515 54,329 22.0 Residential 44,034 53,667 21.9 Enterprises 480 662 37.9 Broad band & internet subscriber 212 637 200.5 Residential 137 453 230.7 Enterprises 75 184 145.3 Narrow band data & internet subscriber 266 367 38.0 Residential 1 1 - Enterprises 265 366 38.1 Fixed voice 979 367 -62.5 Residential 604 540 -10.6 Enterprises 375 372 -0.8 Broad band data & internet user 23,533 24,554 4.3 Broad band data Residential 23,259 24,234 4.2 Broad band data enterprise 274 319 16.4 Narrow data & internet user 266 369 38.7 Narrow band residential 1 1 - Narrow band enterprise 265 368 38.9 Source: Ethio-Telecom Note: Total subscriber base doesn't include internet and data user. The country’s telecommunication penetration rate (telecom density) also increased from 45.9 percent in 2019/20 to 54.8 percent in 2020/21 due to improvement in mobile density to 52.9 percent from 44.9 percent while internet and data density marginally increased to 24.3 percent from 24.0 percent. On the contrary, fixed line density went down to 0.9 per 100 subscribers relative to 1.0 per 100 subscribers (Table 1.14).

National Bank of Ethiopia Annual Report 2020/21 19 The country’s telecommunication penetration rate (telecom density) also increased from 45.9 percent in 2019/20 to 54.8 percent in 2020/21 due to improvement in mobile density to 52.9 percent from 44.9 percent while internet and data density marginally increased to 24.3 percent from 24.0 percent. On the conWUDU\¿[HGOLQHGHQVLW\ZHQWGRZQWRSHU 100 subscribers relative to 1.0 per 100 subscribers (Table 1.14). Table 1.10: Telecom Density Tele density/100 Subscribers* 2017/18 2018/19 2019/20 2020/21 Fixed line 1.2 1.2 1.0 0.9 Mobile 39.8 41.9 44.9 52.9 Total 41.0 43.1 45.9 54.8 Internet and data 18.5 21.8 24.0 24.3 Source: Ethio-Telecom

7HOHGHQVLW\LVPRELOHSOXV¿[HGWHOHSKRQHVXEVFULEHUVSHULQKDELWDQWV Ethio-telecom earned Birr 55.8 billion income in 2020/21 which was 17 percent higher than Birr 47.7 billion a year earlier. Its total expenses also increased 12.5 percent to Birr 25.9 billion during the same period. &RQVHTXHQWO\ JURVV SUR¿W RI WKH HQWHUSULVH stood at Birr 29.9 billion recording a 21.2 percent annual growth (Table 1.16). Table 1.11: Financial Performance and Asset of Ethio -Telecom (In Billions of Birr) Finance and Asset 2018/19 2019/20 2020/21 Percentage Change A B C C/A C/B Income 36.3 47.7 55.8 53.7 17.0 Expense 20.5 23.03 25.9 26.3 12.5 *URVV3UR¿W 15.7 24.67 29.9 90.4 21.2 Assets 54.1 59.1 39.1 -27.7 -33.8 Fixed Gross - - - - - Depreciation 4.7 4.1 5.4 14.9 31.7 Source: Ethio – Telecom

National Bank of Ethiopia Annual Report 2020/21 ENERGY PRODUCTION

National Bank of Ethiopia Annual Report 2020/21 21 II. ENERGY PRODUCTION 2.1. Electric Power Generation Ethiopia is estimated to have a hydro-power production potential of 45,000 MW, a geothermal potential of 10,000 MW and 1.3 million MW potential from wind farm. The country’s generating capacity; however, is largely based on hydropower reservoirs as nine of its major rivers are suitable for hydroelectric power generation. Considering the increasing power demand and capacity shortfall in the system and with a view to have a better power generation mix, the country has ventured to diversify its production of renewable energy to wards wind and geothermal sources. Accordingly, Adama II wind farm has a generating capacity of 153 MW and, combined with Adama I (51MW) and Ashegoda (120 MW), the total energy production from wind has reached 324 MW. In addition, the construction of Aysha 300 MW wind power project is under way. (WKLRSLD LV DOVR LGHQWL¿HG DV KDYLQJ D KXJH solar energy potential due to its geographical location near the equator. In its bid to become a major power exporter and green economy in East Africa, the country is building several geothermal power plants. The amount of electric power generated in 2020/21 was about 15.5 billion KWH, depicting a 2.2 percent annual expansion. About 95.6 percent of the electric power was generated through hydropower, 3.9 percent from wind and 0.5 percent from biomass sources. The total electric energy generated from hydropower increased to 14.9 billion KWH from 14.4 billion KWH a year earlier showing a 3.1 percent annual growth. Energy production from biomass and wind; however, showed 59.0 percent and 0.1 percent decline respectively (Table 2.1).

National Bank of Ethiopia Annual Report 2020/21 22 Table 2.1: Electric Power Generation in ICS and SCS (In ‘000 KWH) During 2020/21, about 3.7 billion metric tons of petroleum products worth Birr 72.6 billion were imported by the Ethiopian Petroleum Enterprise. The total volume of imported petroleum, however, shrank by 3.8 percent owing to the decline in import volume of jet fuel (30.7 percent) and gas oil (1.3 percent) which offset the increase in import of regular gasoline (13 percent) and fuel oil (8.9 percent). On the other hand, the total value of petroleum imports increased 17.0 percent over last year mainly due to higher international oil prices which lead the higher import values of fuel oil (53.8 percent) regular gasoline (53.3 percent) and gas oil (18.6 percent) in contrast with the decline in import value of jet fuel (23.6 percent) (Table 2.2) and (Fig.II.1 & Fig.II.2). 2.2. Volume and Value of Petroleum Imports National Bank of Ethiopia 23 | Annual Report 20 20/ 21 Table 2.1: Electric Power Generation in ICS and SCS (In ‘000 KWH) Source 2018/19 2019/20 2020/21 Percentage Change [A] Share (In %) [B] Share (In %) [C] Share (In %) [C/A] [C/B] ICS Hydro Power 13,211,643.83 95.5 14,403,774.7 94.8 14,850,391.3 95.6 12.4 3.1 Thermal Power - - - - - - - - Geothermal - - - - - - - - Wind 584,735.35 4.2 609,026.6 4.0 608,171.7 3.9 4.0 -0.1 Biomass 43,254.50 0.3 179,372.6 1.2 73,491.9 0.5 69.9 -59.0 Sub Total 13,839,633.7 100 15,192,173.8 100 15,532,055.0 100 12.2 2.2 SCS Hydro Power - - - - - - - - Thermal Power - - - - - - - - Sub Total - - - - - - - - Total Hydro Power 13,211,643.83 95.5 14,403,774.7 94.8 14,850,391.3 95.6 12.4 3.1 Thermal Power - 0.0 - - - - - Geothermal - 0.0 - - - - - - Wind 584,735.35 4.2 609,026.6 4.0 608,171.7 3.9 4.0 -0.1 Biomass 43,254.50 0.0 179,372.6 1.2 73,491.9 0.5 69.9 -59.0 Grand Total 13,839,633.7 100 15,192,173.8 100 15,532,055.0 100 12.2 2.2 Source: Ethiopian Electric Power

National Bank of Ethiopia Annual Report 2020/21 23 Table 2.2: Volume and Value of Petroleum Imports Fig.II.1: Trends in Volume of Petroleum Imports (In ‘000) '6I>DC6A6C@D;I=>DE>6 OBBI5@+9DCFH =;""-F9B8G=B/C@IA9C:)9HFC@9IA"ADCFHG"BP

,CIF79 I=>DE>6C):IGDA:JBCI:GEG>H: =;""-F9B8G=B/5@I9C:)9HFC@9IA"ADCFHG"BP

,CIF79I=>DE>6C):IGDA:JBCI:GEG>H: "CA>C:L>I=I=:>C8G:6H:>C>CI:GC6I>DC6A D>A EG>8:H 9DB:HI>8 G:I6>A EG>8:H L:G: 6AHD 69?JHI:9JEL6G9H-=:G:7NG>H>C< I=:G:I6>A EG>8:H D; ?:I ;J:A E:G8:CI ;DAADL:9 7N <6H D>A 6C9 @:GDH:C: 7N E:G8:CI :68= G:<JA6G <6HDA>C:7N E:G8:CI 6C9 ;J:A D>A 7N E:G8:CI -67A:

Source: Ethiopian Petroleum Enterprise National Bank of Ethiopia 24 | Annual Report 20 20/ 21 2.2. Volume and Value of Petroleum Imports During 2020/21, about 3.7 billion metric tons of petroleum products worth Birr 72.6 billion were imported by the Ethiopian Petroleum Enterprise. The total volume of imported petroleum, however, shrank by 3.8 percent owing to the decline in import volume of jet fuel (30.7 percent) and gas oil (1.3 percent) which offset the increase in import of regular gasoline (13 percent) and fuel oil (8.9 percent). On the other hand, the total value of petroleum imports increased 17.0 percent over last year mainly due to higher international oil prices which lead the higher import values of fuel oil (53.8 percent) regular gasoline (53.3 percent) and gas oil (18.6 percent) in contrast with the decline in import value of jet fuel (23.6 percent) (Table 2.2) and (Fig.II.1 & Fig.II.2). Table 2.2: Volume and Value of Petroleum Imports (Volume in MT and Value in '000 Birr) Petroleum Products 2019/20 2020/21 Volume Value Volume Value Percentage Change A B C D C/A D/B Regular Gasoline (MGR) 577,442.0 9,650,401.7 652,573.0 14,797,531.0 13.0 53.3 Jet Fuel 641,131.1 11,102,669.9 444,022.3 8,479,010.5 -30.7 -23.6 Fuel Oil 80,447.4 958,067.6 87,573.4 1,473,387.6 8.9 53.8 Gas Oil (ADO) 2,568,176.1 40,345,726.1 2,535,455.2 47,857,142.2 -1.3 18.6 Total 3,867,196.6 62,056,865.3 3,719,623.8 72,607,071.3 -3.8 17.0 Source: Ethiopian Petroleum Enterprise

National Bank of Ethiopia Annual Report 2020/21 24 Fig.II.2: Trends in Value of Petroleum Imports (In ‘000) '6I>DC6A6C@D;I=>DE>6 OBBI5@+9DCFH =;""-F9B8G=B/C@IA9C:)9HFC@9IA"ADCFHG"BP

,CIF79 I=>DE>6C):IGDA:JBCI:GEG>H: =;""-F9B8G=B/5@I9C:)9HFC@9IA"ADCFHG"BP

Source: Ethiopian Petroleum Enterprise In line with the increase in international oil prices, domestic retail prices were also adjusted up wards. Thereby rising, the retail prices of jet fuel 36.0 percent followed by gas oil and kerosene by 11.1 percent each, regular gasoline by 9.6 percent and fuel oil by 9.2 percent (Table 2.3). Table 2.3: Annual Retail Prices of Petroleum Products in Addis Ababa (Birr/liter) Year Quarter Regular Gasoline (MGR) Fuel Oil Gas Oil Kerosene Jet fuel 2018/19 Qtr.1 18.77 13.69 16.35 16.35 24.50 Qtr.2 19.38 19.38 17.30 17.30 31.25 Qtr.3 20.02 30.64 17.95 17.95 21.33 Qtr.4 21.08 32.21 18.51 18.51 25.44 Average 19.82 23.98 17.53 17.53 25.63 2019/20 Qtr.1 21.53 32.91 18.75 18.75 24.68 Qtr.2 21.53 32.91 18.75 18.75 26.58 Qtr.3 21.53 32.91 18.75 18.75 27.50 Qtr.4 21.53 33.34 18.75 18.75 22.62 Average 21.53 33.02 18.75 18.75 25.35 2020/21 Qtr.1 21.53 32.91 18.75 18.75 25.87 Qtr.2 21.87 33.27 18.98 18.98 24.74 Qtr.3 25.12 37.96 22.42 22.42 35.51 Qtr.4 25.86 40.05 23.18 23.18 51.76 Average 23.59 36.05 20.83 20.83 34.47 Annual percentage change 9.6 9.2 11.1 11.1 36.0 Source: Ethiopian Petroleum Enterprise

National Bank of Ethiopia Annual Report 2020/21 25 Fig.II.3: Trends in Average Fuel Price in Addis Ababa '6I>DC6A6C@D;I=>DE>6 OBBI5@+9DCFH =;""-F9B8G=BJ9F5;9I9@)F=79=B88=G6565 ,CIF79I=>DE>6C):IGDA:JBCI:GEG>H:

Source: Ethiopian Petroleum Enterprise.

National Bank of Ethiopia Annual Report 2020/21 PRICE DEVELOPMENTS

National Bank of Ethiopia Annual Report 2020/21 27 ,Q DQQXDO DYHUDJH KHDGOLQH LQÀDtion stood at 20.2 percent compared to 19.9 percent a year ago. This was attributed to 0.5 SHUFHQW ULVHLQQRQIRRGLQÀDWLRQGHVSLWH declines in food & non-alcoholic beverages LQÀDWLRQ7DEOH Annual average food & non-alcoholic bevHUDJHVLQÀDWLRQVORZHGGRZQWRSHUFHQW RZLQJ WR ORZHU LQÀDWLRQ RI IUXLWV SHUcentage point), meat (10.1 percentage point), vegetables (9.8 percentage point), and bread & cereals (1.7 percentage point), (Table 3.3 and Fig 3.1). On the other hand, annual average non-food LQÀDWLRQ VFDOHG XS WR SHUFHQW GXH WR KLJKHU SULFH LQÀDWLRQ RI VHUYLFHV LQFOXGLQJ health (11.4 percentage point), communication (7.9 percentage point), transport (6.1 percentage point), clothing & footwear (5.0 percentage point), alcoholic beverages & tobacco (4.4 percentage point), recreation & culture (3.5 percentage point), furnishings, household equipment & routine maintenance of houses (3.3 percentage point), and education (0.3 percentage point) (Table 3.4 and Fig 3.1). /LNHZLVH DQQXDO KHDGOLQH LQÀDWLRQ ZHQW XS to 24.6 percent from 21.6 percent a year ago on account of 5.9 percentage point increase in IRRG QRQDOFRKROLFEHYHUDJHVLQÀDWLRQ7Dble 3.2 and Fig.3.2). III. PRICE DEVELOPMENTS 3.1. Developments in Consumer Price at National Level National Bank of Ethiopia 29 | Annual Report 20 20/ 21 Table 3.1: Annual Average Inflation Rates (in %) Items Weight 2019/20 2020/21 Change (in %age Points) Contribution to Change in Headline Inflation ( %age points) A B B-A C General 100 19.9 20.2 0.3 0.3 Food &Nonalcoholic beverages 54 23.3 23.2 -0.1 -0.1 Non-Food 46 15.9 16.4 0.5 0.3 Source: CSA and NBE Staff Computation Fig.3.1: Developments in Average National Inflation Rates Source: CSA and NBE Staff Computation 0.0 5.0 10.0 15.0 20.0 25.0 January February March April May June July August September October November December January February March April May June July August September October November December January February March April May June 2019 2020 2021 Percent General Food & Non-alcoholic bevarages Non Food

National Bank of Ethiopia Annual Report 2020/21 28 )LJ,,,'HYHORSPHQWVLQ$YHUDJH1DWLRQDO,QÀDWLRQ5DWHV '6I>DC6A6C@D;I=>DE>6 OBBI5@+9DCFH -56@9BBI5@J9F5;9"B:@5H=CB+5H9G=B "H9AG 09=;<H <5B;9 =B5;9 )C=BHG CBHF=6IH=CBHC<5B;9 =B!958@=B9"B:@5H=CB 5;9DC=BHG 9B9F5@

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'CB CC8 &+'%(,++"'& =;9J9@CDA9BHG =B J9F5;9'5H=CB5@"B:@5H=CB+5H9G &+'%(,++"'& ("( -"( )("( )-"( *("( *-"( *()1 (( () %$ Source: CSA and NBE Staff Computation National Bank of Ethiopia 30 | Annual Report 20 20/ 21 Table 3.2: Annual Inflation Rates (in %) Items Weight 2019/20 2020/21 Change (in %age Points) Contribution to Change in Headline Inflation( %age points) A B B-A C General 100 21.5 24.6 3.1 3.1 Food &Nonalcoholic beverages 54 23.1 29.0 5.9 3.2 Non-Food 46 19.7 19.1 -0.6 -0.3 Source: CSA and NBE Staff Computation Fig.3.2: Development in Annual National Inflation Rate Source: CSA and NBE Staff Computation 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 January February March April May June July August September October November December January February March April May June July August September October November December January February March April May June 2019 2020 2021 Percent General Food & Non-alcoholic bevarages Non Food

National Bank of Ethiopia Annual Report 2020/21 29 )LJ,,,'HYHORSPHQWLQ$QQXDO1DWLRQDO,QÀDWLRQ5DWH

'6I>DC6A6C@D;I=>DE>6 OBBI5@+9DCFH -56@9BBI5@"B:@5H=CB+5H9G=B "H9AG 09=;<H <5B;9=B 5;9 )C=BHG CBHF=6IH=CBHC<5B;9=B !958@=B9"B:@5H=CB5;9 DC=BHG 9B9F5@

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',) &+'%(,++"'& =;9J9@CDA9BH=BBBI5@'5H=CB5@"B:@5H=CB+5H9 ',) &+'%(,++"'& ("( -"( )("( )-"( *("( *-"( +("( +-"( *()1 (( () :C:G6A DD9'DC 6A8D=DA>87:K6G6<:H 'DCDD9 7DEOH$QQXDO$YHUDJH)RRG,QÀDWLRQ5DWHVLQ (Dec2016=100) National Bank of Ethiopia 31 | Annual Report 20 20/ 21 Table 3.3: Annual Average Food Inflation Rates (in %) (Dec2016=100) Items Weight 2019/20 2020/21 Change(in %age Points) Contribution to Change in Food Inflation( %age points) A B B-A C Food & Non-alcoholic beverages Inflation 0.54 23.3 23.2 -0.1 -0.1 Bread & Cereals 0.17 28.3 26.6 -1.7 -0.3 Meat 0.04 24.3 14.2 -10.1 -0.4 Fish and sea food 0.00 8.4 25.6 17.1 0.0 Milk, cheese & egg 0.03 13.5 21.7 8.2 0.3 Oils & Fats 0.04 12.6 32.3 19.7 0.9 Fruit 0.00 24.8 4.4 -20.4 -0.1 Vegetables 0.12 27.9 18.0 -9.8 -1.2 Sugar jam, honey, chocolate 0.01 3.2 4.2 1.0 0.0 Food products n.e.c 0.06 20.1 27.6 7.5 0.4 Non-alcoholic beverages 0.05 14.2 28.1 14.0 0.7 Source: CSA and NBE Staff Computation Table 3.4: Annual Average Non- Food Inflation Rates (in %) (Dec2016=100) Items Weight 2019/20 2020/21 Change(in %age Points) Contribution to Change in NonFood Inflation( %age points) A B B-A C Non-Food Inflation 0.46 15.9 16.4 0.5 0.3 Alcoholic Beverages and tobacco 0.05 18.7 23.1 4.4 0.2 Clothing and Footwear 0.06 9.0 14.1 5.0 0.3 Housing, Water, Electricity, Gas and other Fuel 0.17 19.4 14.2 -5.1 -0.9 Furnishings, Household Equipment and Routine maintenance of houses 0.05 9.4 12.6 3.3 0.2 Health 0.01 16.0 27.5 11.4 0.2 Transport 0.02 23.8 30.0 6.1 0.2 Communication 0.02 0.7 8.6 7.9 0.2 Recreation and culture 0.00 10.5 14.1 3.5 0.0 Education 0.00 7.5 7.8 0.3 0.0 Restaurant & hotel 0.05 18.4 17.0 -1.4 -0.1 Miscellaneous Goods 0.03 15.4 17.6 2.2 0.1 Source: CSA and NBE Staff Computation Source: CSA and NBE Staff Computation

National Bank of Ethiopia Annual Report 2020/21 30 In 2020/21, the regional simple average headOLQH LQÀDWLRQ GURSSHG WR SHUFHQW IURP 21.3 percent in the preceding year. However, SNNP, Benshanlgul-Gomuz, Tigray, GambelODDQG+DUDULUHJLVWHUHGDQQXDOKHDGOLQHLQÀDtion greater than the regional simple average KHDGOLQHLQÀDWLRQZKHUH6113UHJLRQDOVWDWH IDFHGWKHKLJKHVWKHDGOLQHLQÀDWLRQSHUFHQW ZKLOH 6RPDOL VDZ WKH ORZHVW LQÀDWLRQ a (14.1 percent), revealing a 14.2 percentage SRLQWPDUJLQLQKHDGOLQHLQÀDWLRQEHWZHHQWKH regions. (Table 3.5) 7DEOH$QQXDO$YHUDJH1RQ)RRG,QÀDWLRQ5DWHVLQ (Dec2016=100) 3.2 Consumer Price Developments in Regional States National Bank of Ethiopia 31 | Annual Report 20 20/ 21 Table 3.3: Annual Average Food Inflation Rates (in %) (Dec2016=100) Items Weight 2019/20 2020/21 Change(in %age Points) Contribution to Change in Food Inflation( %age points) A B B-A C Food & Non-alcoholic beverages Inflation 0.54 23.3 23.2 -0.1 -0.1 Bread & Cereals 0.17 28.3 26.6 -1.7 -0.3 Meat 0.04 24.3 14.2 -10.1 -0.4 Fish and sea food 0.00 8.4 25.6 17.1 0.0 Milk, cheese & egg 0.03 13.5 21.7 8.2 0.3 Oils & Fats 0.04 12.6 32.3 19.7 0.9 Fruit 0.00 24.8 4.4 -20.4 -0.1 Vegetables 0.12 27.9 18.0 -9.8 -1.2 Sugar jam, honey, chocolate 0.01 3.2 4.2 1.0 0.0 Food products n.e.c 0.06 20.1 27.6 7.5 0.4 Non-alcoholic beverages 0.05 14.2 28.1 14.0 0.7 Source: CSA and NBE Staff Computation Table 3.4: Annual Average Non- Food Inflation Rates (in %) (Dec2016=100) Items Weight 2019/20 2020/21 Change(in %age Points) Contribution to Change in NonFood Inflation( %age points) A B B-A C Non-Food Inflation 0.46 15.9 16.4 0.5 0.3 Alcoholic Beverages and tobacco 0.05 18.7 23.1 4.4 0.2 Clothing and Footwear 0.06 9.0 14.1 5.0 0.3 Housing, Water, Electricity, Gas and other Fuel 0.17 19.4 14.2 -5.1 -0.9 Furnishings, Household Equipment and Routine maintenance of houses 0.05 9.4 12.6 3.3 0.2 Health 0.01 16.0 27.5 11.4 0.2 Transport 0.02 23.8 30.0 6.1 0.2 Communication 0.02 0.7 8.6 7.9 0.2 Recreation and culture 0.00 10.5 14.1 3.5 0.0 Education 0.00 7.5 7.8 0.3 0.0 Restaurant & hotel 0.05 18.4 17.0 -1.4 -0.1 Miscellaneous Goods 0.03 15.4 17.6 2.2 0.1 Source: CSA and NBE Staff Computation

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National Bank of Ethiopia 32 | Annual Report 20 20/ 21 3.2 Consumer Price Developments in Regional States In 2020/21, the regional simple average headline inflation dropped to 20.7 percent from 21.3 percent in the preceding year. However, SNNP, Benshanlgul-Gomuz, Tigray, Gambella and Harari registered annual headline inflation greater than the regional simple average headline inflation where SNNP regional state faced the highest headline inflation (28.3 percent) while Somali saw the lowest inflation a (14.1 percent), revealing a 14.2 percentage point margin in headline inflation between the regions. (Table 3.5) Table 3.5: Regional Average Annual Inflation (2020/21 FY) Regions 2019/20 2020/21 Change General Food &Nonalcoholic beverages Nonfood General Food &Nonalcoholic beverages Nonfood General Food &Nonalcoholic beverages Nonfood A B C D E F G=D-A H=E-B I=F-C SNNP 23.8 24.5 22.8 28.3 30.2 25.6 4.5 5.8 2.7 Harari 24.0 26.2 22.2 22.0 22.2 21.8 -2.0 -4.0 -0.4 Oromia 18.4 23.9 11.3 20.1 23.8 14.8 1.7 0.0 3.5 Tigray 24.3 26.1 22.5 24.1 28.9 19.3 -0.2 2.9 -3.3 Gambela 20.4 22.8 17.4 22.2 26.1 16.9 1.8 3.3 -0.5 Addis Ababa 18.8 25.9 13.9 19.5 26.2 14.4 0.7 0.3 0.5 Dire Dawa 20.6 25.6 16.1 19.7 26.6 13.3 -0.8 0.9 -2.9 Ben. Gumuz 24.1 29.9 18.6 24.8 28.7 20.7 0.7 -1.2 2.1 Somali 20.3 20.3 20.4 14.1 13.5 14.8 -6.2 -6.8 -5.6 Afar 20.1 26.3 13.9 18.1 22.2 13.5 -2.0 -4.1 -0.5 Amhara 19.9 23.7 15.6 15.3 18.6 11.4 -4.6 -5.2 -4.2 Regions Average 21.3 25.0 17.7 20.7 24.3 17.0 Standard deviation 2.2 2.4 3.9 4.1 5.0 4.4 Coefficient of variation 0.1 0.1 0.2 0.3 Sources: CSA and NBE’s staff computation

National Bank of Ethiopia Annual Report 2020/21 32 Sources: CSA and NBE’s staff computation The regional food & non-alcoholic beverages VLPSOHDYHUDJHLQÀDWLRQVORZHGGRZQWR percent in 2020/21 from 25.0 percent last year. )RRG QRQDOFRKROLF EHYHUDJHVLQÀDWLRQLQ SNNP, Benshanlgul-Gomuz, Dire Dawa, Addis Ababa and Gambella, however, was higher WKDQWKHUHJLRQDOVLPSOHDYHUDJHLQÀDWLRQ The highest food & non-alcoholic beveragHV LQÀDWLRQ SHUFHQW ZDV UHJLVWHUHG LQ SNNP and the lowest (13.5 percent) in Somali resulting in 16.7 percentage point margin among the regions (Table 3.5). )LJ,,,9DULDWLRQLQ5HJLRQDO$QQXDO$YHUDJH)RRG 1RQDOFRKROLF%HYHUDJHV,QÀDWLRQ National Bank of Ethiopia 34 | Annual Report 20 20/ 21 Fig.3.4: Variation in Regional Annual Average Food & Non-alcoholic Beverages Inflation Sources: CSA and NBE’s staff computation Similarly, the regional simple average non-food inflation decelerated to 17.0 percent from 17.7 percent during the same period. SNNP, Harari, BenshangulGumuz, and Tigray regions had higher non-food inflation than the regional simple average (Table 3.5). SNNP suffered the highest non-food inflation (25.6 percent) and Amhara the lowest non-food inflation (11.4 percent) showing a 14.2 percentage point margin in non-food inflation among the regions (Table 3.5).

24.5 26.2 23.9 26.1 22.8 25.9 25.6 29.9 20.3 26.3 23.7 30.2 22.2 23.8 28.9 26.1 26.2 26.6 28.7 13.5 22.2 18.6 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2019/20 2020/21 Sources: CSA and NBE’s staff computation Similarly, the regional simple average nonIRRGLQÀDWLRQGHFHOHUDWHGWRSHUFHQWIURP 17.7 percent during the same period. SNNP, Harari, Benshangul-Gumuz, and Tigray reJLRQV KDG KLJKHU QRQIRRGLQÀDWLRQWKDQWKH regional simple average (Table 3.5). 6113VXIIHUHGWKHKLJKHVWQRQIRRGLQÀDWLRQ (25.6 percent) and Amhara the lowest nonIRRGLQÀDWLRQ SHUFHQW VKRZLQJ D SHUFHQWDJHSRLQWPDUJLQLQQRQIRRGLQÀDWLRQ among the regions (Table 3.5).

National Bank of Ethiopia Annual Report 2020/21 33 )LJ,,,9DULDWLRQLQ5HJLRQDO$QQXDO$YHUDJH1RQIRRG,QÀDWLRQ National Bank of Ethiopia 35 | Annual Report 20 20/ 21 Fig.3.5: Variation in Regional Annual Average Non-food Inflation Source: CSA and NBE Staff Computation 22.2 22.8 11.3 22.5 17.4 13.9 16.1 18.6 20.4 13.9 15.6 25.6 21.8 14.8 19.3 16.9 14.4 13.3 20.7 14.8 13.5 11.4 Source: CSA and NBE Staff Computation

National Bank of Ethiopia Annual Report 2020/21 MONETARY AND FINANCIAL DEVELOPMENTS

National Bank of Ethiopia Annual Report 2020/21 35 The monetary policy stance of the NBE continued to focus on maintaining price stability and supporting sustainable economic growth of the country. Despite the efforts to adhere WR LWV SUXGHQW PRQHWDU\ SROLF\ VWDQFH LQÀDtion has remained off target for the past twelve consecutive months. 4.1.1 Developments in Monetary Aggregates At the end of 2020/21, domestic liquidity, as measured by broad money supply (M2), UHDFKHG %LUU WULOOLRQ UHÀHFWLQJ D percent annual growth mainly due to the surge LQGRPHVWLFFUHGLW SHUFHQWDQGVLJQL¿- cant improvements in net external asset (90.2 percent). The growth of domestic credit was attributed to 56.3 percent increase in credit to the central government and 21.9 percent to non-central government (Table 4.2). Narrow money supply expanded 21.3 percent due to the rise in demand deposits and currency outside banks, signifying the improvement in money demand for transaction purposes. Similarly, quasi-money, that comprises savings and time deposits, surged by 34.5 percent and reached Birr 910.8 billion by end 2020/21 as commercial banks increased their deposit mobilization by opening additional new branches (Table 4.1). In addition, NBE’s currency demonetization measure and cash withdrawal limit regulations played a role in enhancing banks deposit mobilization efforts. Table 4.1: Components of Broad Money (Value in millions of birr) Source: NBE IV. MONETARY AND FINANCIAL DEVELOPMENTS 4.1. Monetary Developments and Policy (Value in millions of birr) Source: NBE Particulars Year Ended June 30 Annual Percentage Change 2017/18 2018/19 2019/20 2020/21 2018/19 2019/20 2020/21 Narrow Money Supply 281,154.7 308,937.1 360,585.5 437,392.0 9.9 16.7 21.3 . Currency Outside Banks 86,417.3 92,017.0 109,071.8 133,621.3 6.5 18.5 22.5 . Demand Deposits (net) 194,737.4 216,920.2 251,513.7 303,770.7 11.4 15.9 20.8 Quasi-Money 459,418.2 577,815.4 677,060.8 910,874.2 25.8 17.2 34.5 . Savings Deposits 382,549.4 487,302.1 589,174.1 816,380.3 27.4 20.9 38.6 . Time Deposits 76,868.8 90,513.3 87,886.8 94,493.8 17.8 -2.9 7.5 Broad Money Supply 740,572.9 886,752.5 1,037,646.3 1,348,266.1 19.7 17.0 29.9

National Bank of Ethiopia Annual Report 2020/21 36 National Bank of Ethiopia 37 | Annual Report 20 20/ 21 Table 4.1: Components of Broad Money (Value in millions of birr) Source: NBE Source: NBE 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (In Millions of Birr) Fig.IV.1: Major Components of Broad Money Currency Outside Banks Net Demand Deposit Quasi- Money Broad Money Year Particulars Year Ended June 30 Annual Percentage Change 2017/18 2018/19 2019/20 2020/21 2018/19 2019/20 2020/21 Narrow Money Supply 281,154.7 308,937.1 360,585.5 437,392.0 9.9 16.7 21.3 . Currency Outside Banks 86,417.3 92,017.0 109,071.8 133,621.3 6.5 18.5 22.5 . Demand Deposits (net) 194,737.4 216,920.2 251,513.7 303,770.7 11.4 15.9 20.8 Quasi-Money 459,418.2 577,815.4 677,060.8 910,874.2 25.8 17.2 34.5 . Savings Deposits 382,549.4 487,302.1 589,174.1 816,380.3 27.4 20.9 38.6 . Time Deposits 76,868.8 90,513.3 87,886.8 94,493.8 17.8 -2.9 7.5 Broad Money Supply 740,572.9 886,752.5 1,037,646.3 1,348,266.1 19.7 17.0 29.9 7DEOH)DFWRUV,QÀXHQFLQJ%URDG0RQH\ (Value in millions of birr) Source: NBE National Bank of Ethiopia 38 | Annual Report 20 20/ 21 Table 4.2: Factors Influencing Broad Money (Value in millions of birr) Particulars Year Ended June 30 Annual Percentage Change 2017/18 2018/19 2019/20 2020/21 2018/19 2019/20 2020/21 External Assets (net) 39,376.2 14,505.2 -8,321.3 -812.3 -63.2 -157.4 90.2 Domestic Credit 784,621.7 963,699.9 1,176,926.4 1,481,844.4 22.8 22.1 25.9 . Claims on Central Gov't (net) 102,002.8 109,799.2 137,082.9 214,269.2 7.6 24.8 56.3 . Claims on Non-Central Gov't 682,618.9 853,900.7 1,039,843.5 1,267,575.3 25.1 21.8 21.9 Other Items (net) 83,425.0 91,452.6 130,957.8 132,766.0 9.6 43.2 1.4 Broad Money (M2) 740,572.9 886,752.5 1,037,646.3 1,348,266.1 19.7 17.0 29.9 Source: NBE Fig.IV.2: Major Determinants of Monetary Growth Source: NBE

-200.0 -150.0 -100.0 -50.0 0.0 50.0 100.0 150.0 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Annual Percentage Change Credit to Central Gov't Credit to Non-Central Gov't Broad Money Net Foreign Assets

National Bank of Ethiopia Annual Report 2020/21 37 During 2020/21, reserve money or base money recorded 7.2 percent growth and reached Birr 264.3 billion. The increase in reserve money was wholly attributed to 16.5 percent rise in currency in circulation vis-a-vis 5.1 percent decline in bank deposits at the NBE. Meanwhile, in determinant wise, net domestic credit showed 25.9 percent increment while net foreign assets surged 90.2 percent. Excess reserves of commercial banks reached Birr 62.0 billion at the end of June 2020/21 compared with Birr 53.3 billion a year ago. $V DQ LQGLFDWRU RI ¿QDQFLDO GHHSHQLQJ WKH ratio of broad money supply (M2 ) to GDP2 , 3 The 2020/21 GDP (measured at current market price) is estimated assuming by an average GDP growth rate of FY 2015/16 to 2019/20. stood at 0.35 compared to 0.31 the previous \HDU UHÀHFWLQJ LPSURYHPHQWV LQ ¿QDQFLDO OLquidity and depth. Similarly, money multipliHUGH¿QHGDVQDUURZPRQH\WR UHVHUYHPRQey, rose to 1.85 from 1.46 while the ratio of broad money, to reserve money increased to IURPSRVLWLRQVGXHWRWKHVLJQL¿FDQW growth in saving deposits (Table 4.3). Fig.IV.2: Major Determinants of Monetary Growth +"'&$&#'+!"'(" OBBI5@+9DCFH -56@957HCFG"B:@I9B7=B;FC58&CB9M $,"&%"$$"'&*'")) )5FH=7I@5FG 295FB898#IB9 BBI5@)9F79BH5;9<5B;9 LH9FB5@GG9HGB9H CA9GH=7F98=H A6>BHDC:CIG6A DKIC:I

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BBI5@)9F79BH5;9<5B;9 G:9>IID:CIG6A DKI G:9>IID'DC :CIG6A DKI GD69&DC:N ':IDG:><CHH:IH Source: NBE 4.1.2. Developments in Reserve Money and Monetary Ratios

National Bank of Ethiopia Annual Report 2020/21 38 Table 4.3: Reserve Money and Monetary Ratios Fig.IV.3: Reserve Money +"'&$&#'+!"'(" OBBI5@+9DCFH -56@9+9G9FJ9&CB9M5B8&CB9H5FM+5H=CG ' =;"/+9G9FJ9&CB9M '

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Source: NBE National Bank of Ethiopia 37 | Annual Report 20 20/ 21 Table 4.3: Reserve Money and Monetary Ratios Source: NBE Fig.IV.3: Reserve Money Source: NBE 0 50000 100000 150000 200000 250000 300000 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Value in million Birr Reserve Requirement (CB's) Actual Reserve (CB's) Excess Reserve (CB's) Reserve Money Particulars Year Ended June 30 Annual Percentage Change 2017/18 2018/19 2019/20 2020/21 2018/19 2019/20 2020/21 Reserve Requirement (CB's) 36,385.8 44,861.8 51,952.6 71,237.1 23.3 15.8 37.1 Actual Reserve (CB's) 63,117.8 88,723.4 105,289.1 133,265.7 40.6 18.7 26.6 Excess Reserve (CB's) 26,732.0 43,861.7 53,336.5 62,028.6 64.1 21.6 16.3 Reserve Money 174,175.4 200,749.3 246,545.4 264,301.8 15.3 22.8 7.2 . Currency in Circulation 112,911.0 121,800.0 140,521.1 163,709.1 7.9 15.4 16.5 . Bank Deposits 61,264.5 78,949.2 106,024.2 100,592.8 28.9 34.3 -5.1 Money Multiplier (Ratio): . Narrow Money to Reserve Money 1.77 1.80 1.46 1.85 1.27 -18.58 26.44 . Broad Money to Reserve Money 5.09 5.17 4.21 5.37 1.53 -18.58 27.66 Other Monetary Ratios (%): . Currency to Narrow Money 29.79 30.25 30.25 27.93 1.56 0.00 -7.67 . Currency to Broad Money 10.38 10.51 10.51 9.61 1.30 0.00 -8.55 . Narrow Money to Broad Money 34.84 34.75 34.75 34.42 -0.25 0.00 -0.96 . Quasi Money to Broad Money 65.16 65.25 65.25 65.58 0.14 0.00 0.51 M2/GDP Ratio* 0.34 0.33 0.31 0.35 -2.94 -6.06 12.90

National Bank of Ethiopia Annual Report 2020/21 39 to 7.80 percent year ago from 7.94 percent a year ago. The simple average lending interest rate reached 14.25 percent. Hence, both deposit and lending real interest rates were negative 16.6 and 10.35 percent in UHDOWHUPVJLYHQSHUFHQWKHDGOLQHLQÀDtion in June 2021 (Table 4.4). Table 4.4: Interest Rate Structure of Commercial Banks (In percent per annum) 4.2. Developments in Interest Rate In 2020/21, both minimum and maximum saving deposit interest rates remained unchanged at 7.0 and 9.0 percent, respectively. As a result, average saving deposit rate stood at 8 percent and weighted average demand deposit rate at 0.04 percent. Weighted average time deposit rate, however, declined slightly National Bank of Ethiopia 38 | Annual Report 20 20/ 21 4.2. Developments in Interest Rate In 2020/21, both minimum and maximum saving deposit interest rates remained unchanged at 7.0 and 9.0 percent, respectively. As a result, average saving deposit rate stood at 8 percent and weighted average demand deposit rate at 0.04 percent. Weighted average time deposit rate, however, declined slightly to 7.80 percent year ago from 7.94 percent a year ago. The simple average lending interest rate reached 14.25 percent. Hence, both deposit and lending real interest rates were negative 16.6 and 10.35 percent in real terms, given 24.5 percent headline inflation in June 2021 (Table 4.4). Table 4.4: Interest Rate Structure of Commercial Banks (In percent per annum) Rates 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

Deposit Rate 1.1 Savings Deposit (Simple Average) 5.38 8 Minimum 5 7 Maximum 5.75 9 1.2 Time deposit (Weighted Average) 5.77 5.59 5.54 8.09 8.07 7.94 7.8 Up to 1 year 5.71 5.53 5.43 8.05 8.02 7.88 7.75 1 -2 years 5.78 5.6 5.57 8.1 8.07 7.94 7.81 Over 2 years 5.81 5.64 5.63 8.13 8.11 7.99 7.83 1.3 Demand Deposit (Weighted Average) 0.04
Lending Rate (Average) 11.88 12.75 12.75 13.5 13.5 14.25 14.25 Minimum 7.5 7 Maximum 16.25 18 18 20 20 21.5 21.5
T-bills (Nominal) 1.43 1.44 1.42 1.42 1.74 4.54 7.97
Headline Inflation (Year-on-Year) 10.4 7.5 8.8 14.7 15.3 21.6 24.6
Real Rate of Interest on: 5.1 Saving Deposit (1.1 - 4) -5.03 -2.13 -3.43 -6.7 -7.28 -13.55 -16.6 5.2 Time Deposit (1.2 - 4) -4.64 -1.91 -3.26 -6.61 -7.21 -13.62 -16.8 5.3 Lending (2 - 4) 1.47 5.25 3.95 -1.2 -1.78 -7.3 -10.35 Source: NBE National Bank of Ethiopia 39 | Annual Report 20 20/ 21 Fig.IV.4: Interest Rate Structure of Commercial Banks Source: NBE 4.3 Developments in Financial Sector Banks, insurance companies and microfinance institutions are the major financial institutions operating in Ethiopia. By the end of 2020/21, the number of banks reached 19, including the newly opened interest free bank (ZamZam bank) which opened 833 new branches during the review financial year, thereby raising the total number of bank branches to 7,344 from 6,511 last year. About 34.5 percent of the bank branches were located in Addis Ababa. As a result, one bank branch serves about 14,000 people4 . Major branch expansion was undertaken by Awash International Bank (129 branches), Abyssinia Bank (96 branches), Commercial Bank of Ethiopia (95 branches), Nib International Bank (89 branches), Abay Bank (67 branches), Buna Bank (62 braches), 4 CSA population projection for 2020/21 was 102,816,000 Cooperative Bank of Oromia (51 branches), United Bank (39 branches) and Debub Global Bank (37 branches). The share of private banks in total branch network rose to 72.5 percent from 70.5 percent last year. Total capital of the banking industry increased by 36.2 percent and reached Birr 153.7 billion by the end of June 2021 (Table 4.5). Similarly, the number of insurance companies stood at 18, whose branches rose to 632 after they opened 27 new branches in 2020/21. Of the total branches, about 54.6 percent of total insurance branches were situated in Addis Ababa. 85.8 percent were private insurance companies. Insurance companies increased their total capital by 14.7 percent to Birr 11.1 billion whose share of private insurance companies was 73.6 percent and that of public insurance company was 26.4 percent (Table 4.6). 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Value in Percent Average Saving Deposit Rate Weighted Average Time Deposit Rate Average Lending Rate

National Bank of Ethiopia Annual Report 2020/21 40 branches), Buna Bank (62 braches), Cooperative Bank of Oromia (51 branches), United Bank (39 branches) and Debub Global Bank (37 branches). The share of private banks in total branch network rose to 72.5 percent from 70.5 percent last year. Total capital of the banking industry increased by 36.2 percent and reached Birr 153.7 billion by the end of June 2021 (Table 4.5). Similarly, the number of insurance companies stood at 18, whose branches rose to 632 after they opened 27 new branches in 2020/21. Of the total branches, about 54.6 percent of total insurance branches were situated in Addis Ababa. 85.8 percent were private insurance companies. Insurance companies increased their total capital by 14.7 percent to Birr 11.1 billion whose share of private insurance companies was 73.6 percent and that of public insurance company was 26.4 percent (Table 4.6). Fig.IV.5: Branch Network and Capital of Banking System (2017/18-2020/21) National Bank of Ethiopia 40 | Annual Report 20 20/ 21 Fig.IV.5: Branch Network and Capital of Banking System (2017/18-2020/21) Source: Commercial Banks including DBE Source: Commercial Banks including DBE 4.3. Developments in Financial Sector %DQNVLQVXUDQFHFRPSDQLHVDQGPLFUR¿QDQFH LQVWLWXWLRQVDUHWKHPDMRU¿QDQFLDOLQVWLWXWLRQV operating in Ethiopia. By the end of 2020/21, the number of banks reached 19, including the newly opened interest free bank (ZamZam bank) which opened 833 new branches during WKH UHYLHZ¿QDQFLDO\HDUWKHUHE\ UDLVLQJWKH total number of bank branches to 7,344 from 6,511 last year. About 34.5 percent of the bank branches were located in Addis Ababa. As a result, one bank branch serves about 14,000 people3 . Major branch expansion was undertaken by Awash International Bank (129 branches), Abyssinia Bank (96 branches), Commercial Bank of Ethiopia (95 branches), Nib International Bank (89 branches), Abay Bank (67 National Bank of Ethiopia 39 | Annual Report 20 20/ 21 Fig.IV.4: Interest Rate Structure of Commercial Banks Source: NBE 4.3 Developments in Financial Sector Banks, insurance companies and microfinance institutions are the major financial institutions operating in Ethiopia. By the end of 2020/21, the number of banks reached 19, including the newly opened interest free bank (ZamZam bank) which opened 833 new branches during the review financial year, thereby raising the total number of bank branches to 7,344 from 6,511 last year. About 34.5 percent of the bank branches were located in Addis Ababa. As a result, one bank branch serves about 14,000 people4 . Major branch expansion was undertaken by Awash International Bank (129 branches), Abyssinia Bank (96 branches), Commercial Bank of Ethiopia (95 branches), Nib International Bank (89 branches), Abay Bank (67 branches), Buna Bank (62 braches), 4 CSA population projection for 2020/21 was 102,816,000 Cooperative Bank of Oromia (51 branches), United Bank (39 branches) and Debub Global Bank (37 branches). The share of private banks in total branch network rose to 72.5 percent from 70.5 percent last year. Total capital of the banking industry increased by 36.2 percent and reached Birr 153.7 billion by the end of June 2021 (Table 4.5). Similarly, the number of insurance companies stood at 18, whose branches rose to 632 after they opened 27 new branches in 2020/21. Of the total branches, about 54.6 percent of total insurance branches were situated in Addis Ababa. 85.8 percent were private insurance companies. Insurance companies increased their total capital by 14.7 percent to Birr 11.1 billion whose share of private insurance companies was 73.6 percent and that of public insurance company was 26.4 percent (Table 4.6). 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Value in Percent Average Saving Deposit Rate Weighted Average Time Deposit Rate Average Lending Rate

National Bank of Ethiopia Annual Report 2020/21 41 National Bank of Ethiopia 40 | Annual Report 20 20/ 21 Fig.IV.5: Branch Network and Capital of Banking System (2017/18-2020/21) Source: Commercial Banks including DBE

National Bank of Ethiopia 41 | Annual Report 20 20/ 21 Fig.IV.6: Branch Network and Capital of Insurance Companies (2017/18-2020/21) Source: Insurance Companies 2019/20 2020/21 % Change A.A Regions Total A.A Regions Total A B C=B/A 1 Ethiopian Insurance Corporation 25 65 90 25 65 90 2,828.0 2,924.0 3.4 2 Awash Insurance Company 28 20 48 29 23 52 1,311.0 1,551.0 18.3 3 Africa Insurance Company 18 14 32 18 14 32 283.0 367.0 29.7 4 National Insurance Corporation of Ethiopia 22 17 39 22 17 39 175.0 206.0 17.7 5 United Insurance Company 28 12 40 28 12 40 676.0 723.0 7.0 6 Global Insurance Company 12 8 20 12 8 20 198.0 230.0 16.2 7 Nile Insurance Company 26 22 48 29 22 51 627.0 678.0 8.1 8 Nyala Insurance Company 16 17 33 17 18 35 891.0 1,049.0 17.7 9 Nib Insurance company 27 14 41 28 14 42 597.0 718.0 20.3 10 Lion Insurance Company 16 19 35 16 20 36 221.0 380.0 71.9 11 Ethio-Life & General Insurance S.C 18 5 23 18 6 24 165.0 187.0 13.3 12 Oromia Insurance Company 22 20 42 22 21 43 548.0 690.0 25.9 13 Abay Insurance S.C 15 13 28 15 14 29 331.0 382.0 15.4 14 Berhan Insurance S.C 12 7 19 13 8 21 162.0 215.0 32.7 15 Tsehay Insurance S.C 18 9 27 19 9 28 212.0 310.0 46.2 16 Lucy Insurance 12 5 17 16 6 22 141.0 112.0 -20.6 17 Bunna Insurance S.C. 14 9 23 16 12 28 169.0 214.0 26.6 18 Zemen Insurance S.C. 0 2 1 0 115 130.0 13.0 Total 329 276 605 345 290 632 9,650 11,066 14.7 Note: A.A=Addis Ababa Table.4.6: Branch Network & Capital of Insurance Companies as at June 30, 2021 No. Source: Insurance Companies Capital 2020/21 Insurance Companies 2019/20 (Branch in Number and Capital in Millions of Birr) Branch

National Bank of Ethiopia Annual Report 2020/21 42 Fig.IV.6: Branch Network and Capital of Insurance Companies (2017/18-2020/21) +"'&$&#'+!"'(" OBBI5@+9DCFH =;"/F5B7<'9HKCF?5B85D=H5@C:"BGIF5B79CAD5B=9G ,CIF79 "CHJG6C8:DBE6C>:H "'! !#('+ (,% !#('+ (,% ,#$()$''+-'!()(*,$('

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(,#+ % '",.($)#,%( '+-*'(&)'#++,-' ( (-*'+-*'(&)'#+ )#,% '+-'(&)'#+ '" Source: Insurance Companies $W WKH VDPH WLPH WKH QXPEHU RI PLFUR¿- nance institutions (MFIs) reached 39, whose total capital and total asset increased by 43.4 and 13.8 percent and stood at Birr 27.9 billion and Birr 105 billion, respectively. In addition, MFIs’ deposit mobilization and credit expanded remarkably. Compared to last year, their deposit increased 17.2 percent to Birr 52.4 billion while their outstanding credit rose 6.7 percent to Birr 69.3 billion (Table 4.7). 7KH¿YHODUJHVW0),VQDPHO\$PKDUD'HGHELW Oromia, Omo & Addis Credit and Savings Institutions accounted for 84.8 percent of the total capital, 88.8 percent of total deposit, 82.7 percent of total credit and 84.3 percent of total assets of MFIs by the end of 2020/21. Table 4.7: Microfinance Institutions Performance as of June 30, 2021(In Thousands of Birr) Particulars 2019/20 2020/21 % Change A B B/A Total Capital 19,440,089.7 27,875,026.1 43.4 Saving 44,714,061.1 52,404,252.3 17.2 Credit 64,901,669.5 69,275,733.1 6.7 Total Assets 92,200,086.4 104,960,572.8 13.8 Source:MFIs 4.3.1 Resource Mobilization The total resources mobilized by the banking system in the form of deposit, borrowing and loan collection went up 51.5 percent and reached Birr 505.2 billion at the end of 2020/21 (Table 4.8) partly bolstered by the NBE’s Legal Tender Protection Directive that restricts cash holding & cash withdrawals as

National Bank of Ethiopia Annual Report 2020/21 43 well as the demonetization measure underWDNHQGXULQJWKHUHYLHZ¿VFDO\HDU$VUHVXOW the total deposit liabilities of the banking system rose to Birr 1.4 trillion, witnessing a 30.3 percent growth. Of the total deposits, saving deposits accounted for 60.3 percent, demand deposits 32.4 percent and time deposit 7.3 percent (Table 4.9). Saving deposits showed 38.7 percent increment while demand and time deposits registered 23.4 percent and 3.9 percent growth. The share of private banks in total deposit mobilization increased to 45.7 percent from 42.6 percent last year due to their opening of 749 new branches. Meanwhile, CBE alone mobilized 54.3 percent of the total deposits due to its extensive branch network. Raising funds through borrowing remained LQVLJQL¿FDQWDVPRVWRIWKHEDQNVZHUHVXI¿- ciently liquid due to increased deposit mobilization and collection of loans. Their total outstanding borrowing reached Birr 84.2 billion compared to Birr 80.4 billion a year earlier due to higher borrowings by the Development Bank of Ethiopia (DBE). Of the total borrowing, domestic sources accounted for 81.3 percent and foreign sources 18.7 percent. Net borrowing stood at Birr 3.7 billion of which 98.7 percent was from foreign and 1.3 percent from local sources) (Tables 4.8 & 4.9). Moreover, banks loan collection was Birr 186 billion in 2020/21, showing only 1.5 percent increment. Of which private banks collected 65.8 percent of the total loan disbursed (Table 4.8). +"'&$&#'+!"'(" OBBI5@+9DCFH -=: H=6G: D; EG>K6I: 76C@H >C IDI6A 9:EDH>I BD7>A>O6I>DC >C8G:6H:9 ID E:G8:CI;GDBE:G8:CIA6HIN:6G9J:ID I=:>G DE:C>C< D; C:L 7G6C8=:H &:6CL=>A: 6ADC: BD7>A>O:9 E:G8:CI D; I=: IDI6A 9:EDH>IH 9J: ID >IH :MI:CH>K: 7G6C8=C:ILDG@ +6>H>C< ;JC9H I=GDJ<= 7DGGDL>C< G:B6>C:9 >CH><C>;>86CI 6H BDHI D; I=: 76C@H L:G: HJ;;>8>:CIAN A>FJ>9 9J: ID

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National Bank of Ethiopia Annual Report 2020/21 44 Table.4.10: Loans and Advances by Lenders D* C* O/S* D* C* O/S* A B C D E F D/A E/B F/C A.State Owned Banks 1.Commercial Bank of Ethiopia 141,415.24 82,692.53 633,991.45 111,458.44 54,336.81 708,225.96 -21.2 -34.3 11.7 2.Development Bank of Ethiopia 8,510.66 7,685.47 51,103.50 9,863.79 9,212.12 55,431.44 15.9 19.9 8.5 Sub-Total 149,925.9 90,378.0 685,094.9 121,322.2 63,548.9 763,657.4 -19.1 -29.7 11.5 B. Private Banks 3 Awash International Bank 10,151.3 12,053.7 56,870.0 24,887.4 12,426.3 87,107.0 145.2 3.1 53.2 4. Dashen Bank 15,279.9 12,839.1 42,454.0 32,893.1 19,616.2 62,835.9 115.3 52.8 48.0 5. Bank of Abyssinia 9,763.6 3,900.9 37,594.6 33,455.0 11,987.7 77,344.0 242.7 207.3 105.7 6. Wegagen Bank 13,406.8 9,440.1 23,861.1 7,934.6 8,407.2 27,349.0 -40.8 -10.9 14.6 7. United Bank 7,633.7 7,583.6 26,288.1 11,943.7 11,449.3 34,702.8 56.5 51.0 32.0 8. Nib International Bank 10,426.1 5,956.7 25,887.8 14,007.3 7,922.1 34,480.7 34.3 33.0 33.2 9. Cooperative Bank of Oromia 17,699.9 12,207.3 34,213.9 28,541.0 14,879.1 55,265.0 61.2 21.9 61.5 10. Lion Interenational Bank 6,810.8 3,855.5 19,559.7 4,413.3 3,307.1 22,795.3 -35.2 -14.2 16.5 11. Oromia International Bank 7,078.2 7,102.1 20,228.8 4,635.0 4,456.1 14,257.1 -34.5 -37.3 -29.5 12. Zemen Bank 2,657.7 3,291.8 9,920.6 10,281.0 8,317.1 25,755.8 286.8 152.7 159.6 13.Berhan International Bank 4,974.7 4,614.5 12,651.5 7,541.5 4,698.3 17,705.8 51.6 1.8 39.9 14.Bunna International Bank 4,960.2 2,464.4 11,528.1 6,317.9 2,244.9 18,320.4 27.4 -8.9 58.9 15.Abay Bank 5,543.4 3,582.2 11,467.3 12,659.5 5,675.4 19,580.2 128.4 58.4 70.7 16. Addis International Bank 704.6 698.0 3,487.0 1,272.9 1,184.5 4,535.9 80.7 69.7 30.1 17. Debub Global Bank 2,864.1 1,552.8 4,549.5 5,692.2 3,276.6 8,447.6 0.0 18. Enat Bank 1,285.1 1,804.8 6,545.9 1,653.5 2,603.7 9,144.1 0.0 Sub-Total 121,240.0 92,947.5 347,108.1 208,128.8 122,451.5 519,626.4 71.7 31.7 49.7 Grand Total 271,165.9 183,325.5 1,032,203.0 329,451.0 186,000.4 1,283,283.8 21.5 1.5 24.3 Source: Commercial Banks including DBE D*=Disbursement, C*=Collection, O/S*= Outstanding Credit (In Millions of Birr) Lenders 2019/20 Percentage Change 2020/21 4.3.2 New Lending Activities All banks including Development Bank of Ethiopia (DBE), disbursed Birr 329.5 billion in fresh loans, depicting a 21.5 percent increase over last year (Table 4.10). Of the total new loans, about 63.2 percent was disbursed by private banks and 36.8 percent by public banks (Table 4.11). Of the total fresh loan disbursed, international trade accounted for 20.1 percent, followed by industry (18.4 percent), domestic trade (15.2 percent), housing and construction (13.5 percent), agriculture (9.3 percent), mines, power and water resource (6.1 percent) and others (17.4 percent) (Table 4.12).

National Bank of Ethiopia Annual Report 2020/21 45 Fig.IV.7: Development in Net Deposit, Lending and Loan Collection Activities of the Banking System (2018/19-2020/21

+"'&$&#'+!"'(" OBBI5@+9DCFH '9K%9B8=B;7H=J=H=9G AA 76C@H >C8AJ9>C< :K:ADEB:CI 6C@ D; I=>DE>6 9>H7JGH:9 >GG 7>AA>DC >C ;G:H= AD6CH 9:E>8I>C< 6 E:G8:CI >C8G:6H: DK:G A6HI N:6G -67A: (;I=:IDI6A C:LAD6CH 67DJI E:G8:CI L6H 9>H7JGH:9 7N EG>K6I: 76C@H 6C9 E:G8:CI 7N EJ7A>8 76C@H -67A: (; I=: IDI6A ;G:H= AD6C 9>H7JGH:9

CI:GC6I>DC6A IG69: 688DJCI:9 ;DG E:G8:CI ;DAADL:9 7N >C9JHIGN E:G8:CI 9DB:HI>8 IG69: E:G8:CI =DJH>C< 6C9 8DCHIGJ8I>DC E:G8:CI 6<G>8JAIJG: E:G8:CI B>C:H EDL:G 6C9 L6I:G G:HDJG8: E:G8:CI 6C9 DI=:GH E:G8:CI -67A: =;"/9J9@CDA9BH=B'9H9DCG=H %9B8=B;5B8%C5BC@@97H=CB7H=J=H=9GC:H<95B?=B;,MGH9A ,CIF79DBB:G8>6A6C@H6C9

,I6I:DLC:9 )G>K6I: ,I6I:DLC:9 )G>K6I: ,I6I:DLC:9 )G>K6I: /6AJ:>C&>AA>DCHD;>GG ':I:EDH>I %:C9>C< %D6C8DAA:8I>DC Source: Commercial Banks and DBE Table 4.11: Percentage Share of Loans and Advances by Lenders D* C* O/S* D* C* O/S* A B C D E F D/A E/B F/C A.State Owned Banks 1.Commercial Bank of Ethiopia 52.2 45.1 61.4 33.8 29.2 55.2 -35.1 -35.2 -10.1 2.Development Bank of Ethiopia 3.1 4.2 5.0 3.0 5.0 4.3 -4.6 18.1 -12.8 Sub-Total 55.3 49.3 66.4 36.8 34.2 59.5 -33.4 -30.7 -10.3 B.Private Banks 3 Awash International Bank 3.7 6.6 5.5 7.6 6.7 6.8 101.8 1.6 23.2 4. Dashen Bank 5.6 7.0 4.1 10.0 10.5 4.9 77.2 50.6 19.1 5. Bank of Abyssinia 3.6 2.1 3.6 10.2 6.4 6.0 182.0 202.9 65.5 6. Wegagen Bank 4.9 5.1 2.3 2.4 4.5 2.1 -51.3 -12.2 -7.8 7. United Bank 2.8 4.1 2.5 3.6 6.2 2.7 28.8 48.8 6.2 8. Nib International Bank 3.8 3.2 2.5 4.3 4.3 2.7 10.6 31.1 7.1 9. Cooperative Bank of Oromia 6.5 6.7 3.3 8.7 8.0 4.3 32.7 20.1 29.9 10. Lion Interenational Bank 2.5 2.1 1.9 1.3 1.8 1.8 -46.7 -15.5 -6.3 11. Oromia International Bank 2.6 3.9 2.0 1.4 2.4 1.1 -46.1 -38.2 -43.3 12. Zemen Bank 1.0 1.8 1.0 3.1 4.5 2.0 218.4 149.0 108.8 13.Berhan International Bank 1.8 2.5 1.2 2.3 2.5 1.4 24.8 0.4 12.6 14.Bunna International Bank 1.8 1.3 1.1 1.9 1.2 1.4 4.8 -10.2 27.8 15. Abay Bank 2.0 2.0 1.1 3.8 3.1 1.5 88.0 56.2 37.3 16. Addis International Bank 0.3 0.4 0.3 0.4 0.6 0.4 48.7 67.3 4.6 17. Debub Global Bank 1.1 0.8 0.4 1.7 1.8 0.7 0.0 18. Enat Bank 0.5 1.0 0.6 0.5 1.4 0.7 0.0 Sub-Total 44.7 50.7 33.6 63.2 65.8 40.5 41.3 29.8 20.4 Grand Total 100.0 0.0 Source: Commercial Banks including DBE D*=Disbursement, C*=Collection, O/S*= Outstanding Credit Lenders 2019/20 Percentage change 2020/21

National Bank of Ethiopia Annual Report 2020/21 46 4.3.3 Outstanding Loans Outstanding credit of the banking system (including corporate bond) grew 24.3 percent and amounted to Birr 1.28 trillion at the end of June 2021. Mines, power and water resources accounted for 25.1 percent of the outstanding credit followed by industry (21.3 percent), international trade (15.4 percent), housing and construction (11.0 percent), domestic trade (9 percent), ‘transport and communication (6.6 percent) and others (11.6 percent) (Table 4.12). The share of private sector, including cooperatives, in outstanding credit was Birr 670.5 ELOOLRQ RU SHUFHQW UHÀHFWLQJ SHUcent annual increase (Table 4.13). Table 4.12: Loans & Advances by Economic Sectors D* C* O/S* D* C* O/S* D* C* O/S* A B C D E F D/A E/B F/C Agriculture 24,902.4 26,393.9 21,087.3 30,779.8 23,503.6 31,823.6 23.6 (11.0) 50.9 Industry 43,074.1 33,626.5 221,731.9 60,607.1 26,899.1 272,983.8 40.7 (20.0) 23.1 Domestic Trade 36,400.9 29,373.1 87,819.1 49,961.6 34,441.9 115,088.1 37.3 17.3 31.1 International Trade 38,292.8 34,233.6 134,070.9 66,142.3 46,743.3 197,283.0 72.7 36.5 47.1 Export 28,017.8 22,771.0 89,219.4 51,706.4 34,766.0 135,921.5 84.5 52.7 52.3 Import 10,490.8 11,462.5 44,851.4 14,436.0 11,977.3 61,361.5 37.6 4.5 36.8 Hotels and Tourism 5,286.8 4,136.4 17,576.7 8,173.0 4,334.5 25,963.8 54.6 4.8 47.7 Transport and Communication 25,035.3 13,578.3 68,741.8 16,429.1 5,099.5 85,175.4 (34.4) (62.4) 23.9 Housing and Construction 25,534.5 22,130.7 115,534.0 44,530.4 24,264.2 140,572.0 74.4 9.6 21.7 Mines, Power and Water resource 48,531.5 5,957.8 303,992.3 20,168.8 1,733.1 322,522.5 (58.4) (70.9) 6.1 Others 4,583.0 3,762.9 11,436.4 9,105.5 5,985.4 22,306.4 98.7 59.1 95.0 Personal 19,308.7 10,132.3 50,212.7 23,553.3 12,996.0 69,565.2 22.0 28.3 38.5 Total 271,165.9 183,325.6 1,032,203.0 329,451.0 186,000.4 1,283,283.8 21.5 1.5 24.3 D*=Disbursement, C*=Collection, O/S*= Outstanding Credit Source: Commercial Banks & Staff Computation 2019/20 2020/21 Percentage Change Economic Sectors (In Millions of Birr) Fig.IV.8: Sectorial Breakdown of Bank Credit (2018/19-2020/21)

200,000.0 400,000.0 600,000.0 800,000.0 1,000,000.0 1,200,000.0 1,400,000.0 2018/19 2019/20 2020/21 In Millions of Birr Mines, Power and Water Reso. Transport and Communication Agriculture Others Housing & Construction International Trade Domestic Trade & Services Industry Source: Commercial Banks including DBE

National Bank of Ethiopia Annual Report 2020/21 47 Table 4.13: Loans and Advances by Borrowers 2017/18 2018/19 2019/20 O/S* O/S* O/S* D* C* O/S* A B C D E F G=F/B H=F/C Public Enterprises 401,517.5 463,351.1 547,616.6 67,161.5 12,055.1 612,774.3 32.2 11.9 Cooperatives 16,724.6 18,532.1 19,891.0 34,697.4 27,326.0 29,129.8 57.2 46.4 Private & Individuals 267,738.5 359,100.3 464,695.4 227,592.2 146,619.3 641,379.7 78.6 38.0 Total 685,980.5 840,983.5 1,032,203.0 329,451.0 186,000.4 1,283,283.8 52.6 24.3 D*=Disbursement, C*=Collection, O/S*= Outstanding Credit 2020/21 Borrowing Clients Percentage change Source: Commercial Banks & DBE (In Millions of Birr) 4.4. Financial Activities of NBE As of June 2021, NBE’s gross claims on central government stood at Birr 281.9 billion about 22.4 percent higher than a year earlier. Of the total credit to the central government, bonds accounted for 70.4 percent and direct advance 29.6 percent. Meanwhile, NBE’s outstanding claims on DBE was Birr 56.6 billion showing a 2.6 percent reduction relative to last year same period. On the liability side, total deposits declined by 3.5 percent to Birr 137.6 billion due to lower GHSRVLWV RI WKH ¿QDQFLDO LQVWLWXWLRQV DW 1%( (Table 4.14). 2018/19 2019/20 2020/21 A B C D=B/A E=C/B Loans and Advances (1+2) 246,828.0 288,380.4 338,505.4 16.8 17.4 1.Claims on Central Gov’t 194,685.3 230,237.7 281,862.6 18.3 22.4 1.1 Direct Advance 187,264.9 31,000.0 83,500.0 -83.4 169.4 1.2 Bonds 7,420.4 199,237.7 198,362.6 2585.0 -0.4 2. Claims on DBE 52,142.7 58,142.7 56,642.7 11.5 -2.6 3. Deposit Liabilities 101,541.6 142,563.3 137,565.8 40.4 -3.5 3.1 Government 22,513.9 34,526.8 36,843.5 53.4 6.7 3.2 Financial Institutions 79,027.7 108,036.6 100,722.4 36.7 -6.8 Particulars % Change Source:National Bank of Ethiopia ( In Millions of Birr) Table 4.14: Financial Activities of National Bank of Ethiopia at the Close of June 30, 2021

National Bank of Ethiopia Annual Report 2020/21 48 Despite absence of secondary market in Ethiopia, government bonds were occasionally isVXHGWR¿QDQFHJRYHUQPHQWH[SHQGLWXUHVDQG or to absorb excess liquidity in the banking system. 4.5.1. Treasury Bills Market During 2020/21, total T-bills offered to the T-bills auction market showed a 42.9 percent increment and reached Birr 330.7 billion while demand for T-bills increased 17.1 percent to reach Birr 284.8 billion. This indicated that the market was undersubscribed by Birr 45.9 billion (13.9 percent). Thus, the amount RI7ELOOVVROGGXULQJWKH¿VFDO\HDUZDV%LUU 238.8 billion which was lower than the demand by Birr 46 billion. At the end of 2020/21, total outstanding T-bills amounted to Birr 116.6 billion, about 391 perFHQWKLJKHUWKDQWKHSUHFHGLQJ¿VFDO\HDU7KLV was mainly attributed to the policy change on the issuance of T-bills since December 2019. Commercial Banks’ participation in T-bill aucWLRQ PDUNHW KDV VKRZQ VLJQL¿FDQW LPSURYHment and accounted for Birr 52.0 billion or 44.6% of the total outstanding T-Bills where that of non-bank institutions stood at Birr 64.5 billion or 55.4 % (Table 4.15). Average weighted yield of all types of T-bills increased to 7.97 percent from 4.536 percent during the review period (Table 4.15). The highest yield was recorded for the 364-day T-bills and the lowest 28-day T-bills with a corresponding yield rate of 9.032 and 6.826 percent, respectively. 4.5 Developments in Financial Markets

National Bank of Ethiopia Annual Report 2020/21 49 Table 4.15: Results of Annual Treasury Bills Auction (In millions of Birr) C/A C/B Number of Bidders 163.00 109.90 147.24 Amount Demanded (Mn.Birr) 243,155.09 (32.62) 17.12 28-day bill 2,583.00 41,148.55 2,363.99 1,493.05 91-day bill 221,726.09 136,590.30 (64.86) (38.40) 182-day bill 14,096.00 72,176.30 3,375.03 412.03 364-day bill 4,750.00 34,868.40 15.40 634.07 Amount Supplied (Mn.Birr) 231,486.88 330,673.00 (16.91) 42.85 28-day bill 3,106.00 30,230.00 2,806.73 873.28 91-day bill 203,649.88 108,117.00 (70.31) (46.91) 182-day bill 19,981.00 132,476.00 6,451.73 563.01 364-day bill 4,750.00 59,850.00 94.87 1,160.00 Amount Sold (Mn.Birr) 234,839.09 238,799.55 (43.50) 1.69 Banks 5,980.00 97,130.41 14,843.14 1,524.25 Non-Banks 228,859.09 141,669.15 (66.43) (38.10) 28-day bill 99.69 99.48 (0.46) (0.21) 91-day bill 98.94 97.97 (1.73) (0.98) 182-day bill 97.66 96.29 (3.40) (1.40) 364-day bill 95.25 91.74 (4.31) (3.69) 28-day bill 0.80 4.04 6.83 755.58 68.97 91-day bill 1.20 4.29 8.30 589.53 93.20 182-day bill 0.64 4.81 7.72 1,108.71 60.61 364-day bill 4.32 5.00 9.03 108.85 80.65 Banks 650.00 0.47 5,604.00 23.62 52,040.00 44.65 Non-Banks 137,404.36 99.53 18,120.00 76.38 64,519.95 55.35 (53.04) 256.07 Public Servants Social Security Agency 72,015.56 52.16 11,690.00 49.27 43,869.95 37.64 (39.08) 275.28 Development Bank of Ethiopia 30,216.00 21.89 - - - - (100.00) - Private Organizations’ Employees Social 31,841.80 23.06 6,430.00 27.10 20,600.00 17.67 (35.31) 220.37 Other Non-Bank Institutions 3,331.00 2.41 - - 50.00 0.04 (98.50) - Particulars 2018/19 2019/20 2020/21 Percentage Change A B C 2,022.00 192.00 403.00 422,633.54 284,783.55 1,670.00 388,670.54 2,077.00 30,216.00 397,958.24 1,040.00 364,184.24 30,712.00 422,633.54 650.00 421,983.54 Average Weighted Price for Successful bids(Birr) 98.80 75.71 (2.46) (1.55) 99.94 99.70 99.68 95.87 97.89 96.37 1.74 357.70 Outstanding bills at the end of period(Mn.Br.) 138,054.36 Share % 23,724.00 Share % 116,559.95 Share % (15.57) 391.32 Average Weighted Yeild for Successful bids(%) 4.54 7.97 Source NBE. Fig IV.9: Annual trends of T- Bills Market and its weighted Yield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

National Bank of Ethiopia Annual Report 2020/21 50 4.5.2. Corporate Bond Market CBE’s corporate bond purchase during 2020/21 dropped 39.2 percent to Birr 43.8 billion. At the same time, total amount of corporate bond redeemed stood at Birr 8.5 Billon, with Addis Ababa city administration, Ethiopian Electric power & Ethiopian Electric Utility and regional governments being the major issuers (Table 4.16). As a result, total outstanding bond holding registered showed 9.8 perent annual growths and reached Birr 444.9 billion at the end of WKH¿VFDO\HDU7KHVKDUHRI((3$ ((8LQ outstanding corporate bond was 72.13 percent, while that of Ethio Railway Corporation, Addis Ababa City Administration and regional states stood at 16.05 percent, 11.72 percent and 0.11 percent, respectively. Table 4.16: Disbursement, Redemption and Outstanding of Coupon and Corporate Bond of CBE (In Millions of Birr) Percentage Change 2018/19 2019/20 2020/21 Actual A B

Corporate Bond Purchases by holders 71,800.00 71,971.84 43,768.87 -39.19 EEPCO and EEU 47,800.00 47,716.23 19,856.55 -58.39 Regional governments - 0.00 - Development Bank of Ethiopia 0.00 - 0.00 - City Government of Addis Ababa 9,000.00 2,700.00 13,587.37 - Railway Corporation 15,000.00 21,555.61 10,324.95 Private Sector - - -
Redemption of Bonds by Clients 24,644.62 21,796.64 8,496.49 -61.0 EEPCO and EEU 228.75 5,156.04 1,316.56 -74.5 Regional governments 20.29 52.65 38.07 -27.7 Development Bank of Ethiopia 0.00 - City Government of Addis Ababa 23,112.35 8,712.39 7,141.87 -18.0 Railway Corporation 1,283.24 7,875.56 0.00 - Private Sector - -
Outstanding Bonds by Clients 338,580.36 405,235.41 444,871.73 9.8 EEPCO and EEU 263,921.3 302,345.73 320,885.72 6.1 Regional governments 568.7 516.02 467.59 -9.4 Development Bank of Ethiopia - - - 0.0 City Government of Addis Ababa 31,184.7 45,686.69 52,132.19 14.1 Railway Corporation 42,905.7 56,686.98 71,386.23 25.9 Private Sector - - - - Particulars B/A Annual

Source: Commercial Bank of Ethiopia 4.5.3. Inter-bank Money Market There has been no interbank money market transaction during the review period.

DEVELOPMENTS IN EXTERNAL SECTOR

National Bank of Ethiopia Annual Report 2020/21 52 The overall balance of payments registered USD 298.7 million in surplus in 2020/21 FRPSDUHGWR86'PLOOLRQGH¿FLWD\HDU earlier. This positive development was atWULEXWHGWRORZHUGH¿FLWLQJRRGVWUDGHUHFRYery of service account balance and higher net SULYDWHWUDQVIHUVGHVSLWHGHFOLQHLQQHWRI¿FLDO WUDQVIHUVDQGQHWFDSLWDODFFRXQWLQÀRZV Services in account registered USD 29.7 million in surplus in contrast to USD 219 million GH¿FLW ZKLOH PHUFKDQGLVH WUDGH GH¿FLW QDUrowed by 2 percent. In addition, net private transfers increased by 18 percent whereas of- ¿FLDOWUDQVIHUVVOXPSHGE\SHUFHQW$VD UHVXOW WKH FXUUHQW DFFRXQW GH¿FLW LQFOXGLQJ RI¿FLDOWUDQVIHUVVKRZHGDSHUFHQWFRQtraction to USD 3.2 billion and its share in GDP stood at 2.8 percent (Table 5.1). V. DEVELOPMENTS IN EXTERNAL SECTOR 5.1. Overall Balance of Payments

National Bank of Ethiopia Annual Report 2020/21 53 Table 5.1: Balance of Payments1 (In Millions of USD) National Bank of Ethiopia 56 | Annual Report 2020/2 1 Table 5.1: Balance of Payments1 (In Millions of USD) S/N Particulars 2018/19 2019/20* 2020/21 Percentage Change A B C B/A C/B 1 Exports, f.o.b.

2,666.5

2,987.7

3,617.0 12.0 21.1 Coffee 764.1 855.9 909.4 12.0 6.3 Other 1,902.4 2,131.8 2,707.6 12.1 27.0 2 Imports 15,112.0 13,881.3 14,287.9 -8.1 2.9 Fuel 2,600.7 2,088.1 1,940.8 -19.7 -7.1 Cereals 598.7 843.2 1,336.7 40.8 58.5 Aircraft 870.3 65.9 130.4 -92.4 97.8 Imports excl. fuel, cereals, aircraft 11,042.3 10,884.1 10,879.9 -1.4 0.0 3 Trade Balance (1-2) -12,445.5 -10,893.6 -10,670.9 -12.5 -2.0 4 Services, net -564.4 -219.0 29.7 -61.2 -113.5 Non-factor services, net 39.0 393.7 586.9 910.7 49.1 Exports of non-factor services 4,948.9 4,686.4 4,894.6 -5.3 4.4 Imports of non-factor services 4,910.0 4,292.7 4,307.7 -12.6 0.4 Income, net -603.3 -612.7 -557.2 1.5 -9.1 O/w Gross official int. payment 682.8 654.4 564.9 -4.2 -13.7 Dividend, net -0.1 5 Private transfers, net 5,975.2 5,185.7 6,118.4 -13.2 18.0 o/w: Private Individuals 5,292.4 4,275.1 4,931.3 -19.2 15.4 6 Current account balance excluding off. Transfers (3+4+5) -7,034.7 -5,926.9 -4,522.8 -15.7 -23.7 7 Official transfers, net 2,086.7 1,525.0 1,368.9 -26.9 -10.2 8 Current account balance including official transfers(6+7) -4,948.0 -4,401.9 -3,153.9 -11.0 -28.3 9 Capital account 4,822.4 4,326.5 3,818.6 -10.3 -11.7 Off. Long-term Cap., net 1,645.7 2,613.4 893.7 58.8 -65.8 Disbursements 1,841.7 2,821.2 1,018.0 53.2 -63.9 Amortization 196.0 207.8 124.3 6.0 -40.2 Other pub. long-term cap. -249.0 -720.9 -848.7 189.6 17.7 Private sector, long term 264.2 164.3 153.4 -37.8 -6.6 Foreign Direct Investment(net) 3,015.4 2,419.2 3,955.4 -19.8 63.5 Short-term Capital 146.1 -149.4 -335.3 -202.3 124.4 10 Errors and Omissions [11-(9+8)] -816.1 -758.0 -365.9 11 Overall balance (-13) -941.6 -833.4 298.7 12 Financing (13+16) 941.6 833.4 -298.7 13 Reserves [ Increase(-), Decrease (+)] (14+15) 941.6 833.4 -298.7 14 Central Bank (NFA) 916.7 770.1 386.4 Asset -567.8 304.5 244.0 Liabilities 1,484.5 465.6 142.4 15 Commercial banks (NFA) 25.0 63.3 -685.1 16 Debt Relief Principal Interest Source: NBE Staff Compilation 1 2020/21 data are Preliminary *Some items are revised

National Bank of Ethiopia Annual Report 2020/21 54 Table 5.2: Components of Current Account as Percentage of GDP

+"'&$&#'+!"'(" OBBI5@+9DCFH -56@9CADCB9BHGC:IFF9BH77CIBH5G)9F79BH5;9C: ) )5FH=7I@5FG )9F79BH5;9<5B;9 -G69:6A6C8:

$**"( $-"* ':I,:GK>8:H

$.-", $))+") ':I)G>K6I:-G6CH;:GH $**"/ ),"* ':I)G>K6I:-G6CH;:GH $+,"1 $)+") JGG:CI88DJCI:;>8>I:M8AJ9>C<D;;>8>6AIG6CH;:GH $-"( $."* JGG:CI88DJCI:;>8>I>C8AJ9>C<D;;>8>6AIG6CH;:GH $*("0 $+("/ ,CIF79',I6;;DBE>A6I>DC ,CIF79',I6;;DBEJI6I>DCH

"C&>AA>DCD;., =;/-F9B8G=BCADCB9BHGC:IFF9BH77CIBH MEDGIH "BEDGIH ':I,:GK>8:H )G>K6I:-G6CH;:GH C:I 5.2.1 Balance of Trade In 2020/21, merchandise trade balance recorded USD 10.7 billion which was slightly lower than USD 10.9 billion in the preceding year as the increase in goods export earnings outweighed the rise in import bill. Hence, PHUFKDQGLVH WUDGH GH¿FLW DV D SURSRUWLRQ RI GDP stood at 9.6 percent compared to 10.1 percent a year ago. 5.2. Developments in Merchandise Trade National Bank of Ethiopia 57 | Annual Report 2020/2 1 Table 5.2: Components of Current Account as Percentage of GDP Particulars 2018/19 2019/20 2020/21 Percentage Change A B C B/A C/B Trade Balance -13.0 -10.1 -9.6 -22.0 -5.2 Net Services -0.6 -0.2 0.03 -65.4 -113.1 Net Private Transfers 6.2 4.8 5.5 -22.7 14.2 Net Private Transfers 2.2 1.4 1.2 -34.9 -13.1 Current Account Deficit (excluding official transfers) -7.3 -5.5 -4.1 -25.0 -26.2 Current Account Deficit (including official transfers) -5.2 -4.1 -2.8 -20.8 -30.7 Source: NBE Staff Compilation Source: NBE Staff Computations (2,000.0)

2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 16,000.0 18,000.0 In Million of USD Fig. V.1 Trends in Components of Current Account Exports Imports Net Services Private Transfers, net

National Bank of Ethiopia Annual Report 2020/21 55 5.2.2 Merchandise Export Total merchandise export in 2021/21 amounted to USD 3.6 billion showing a 21.1 percent annual growth owing to higher export earnings from coffee (6.3 percent), gold (242 SHUFHQW ÀRZHU SHUFHQW FKDW percent), electricity (36.2 percent), fruits & vegetables (17.7 percent) and meat & meat products (11.7 percent). The increase in export earnings from coffee stood at USD 909.4 million driven by 15.9 percent rise in international price despite 8.3 percent drop in its export volume. The share of coffee in total merchandise export revenue declined to 25.1 percent from 28.6 percent last year. Likewise, gold export generated USD 672 million which was 242 percent higher than the preceding year. This was attributed to a 187.7 percent increase in volume and 18.9 percent in international price. NBE’s revision of the gold purchase price was the main reason for higher performance in gold export. As a result, the share in gold in total merchandise export sigQL¿FDQWO\LPSURYHGWRSHUFHQW IURP percent last year. ,QWKHVDPHZD\H[SRUWUHYHQXHIURPÀRZHU grew 11.4 percent and reached USD 470 million as both export volume and world price increased 7.6 and 3.6 percent, respectively. +RZHYHUWKH VKDUH RI ÀRZHULQWRWDO H[SRUW earnings declined to 13.0 percent from 14.1 percent a year ago. Receipts from chat export amounted to USD 402.5 million depicting a 24.1 percent annual growth due to a 24.6 percent increase in export volume despite 0.5 percent fall in international price. Thus, the share of chat total export earning stood at 11.1 percent. Earnings from export of electricity went up 36.2 percent to USD 90.5 million owing to 43.0 percent rise in export volume in spite of 4.7 percent decline in international price. Accordingly, its share in total merchandise export earnings slightly improved to 2.5 percent from 2.2 percent last year. Revenue from export of fruits & vegetables increased 17.7 percent as export volume rose 16.0 percent and international price 1.5 percent. However, their share in total merchandise export receipts slightly declined to 1.9 percent from 2.0 percent a year earlier. Receipts from meat & meat product export went up 11.7 percent over last year wholly driven by 14.1 percent increase in export volume despite a 2.1 percent drop in international price. However, their share in total export revenue constituted just 2.1 percent. On the other hand, export earnings from oilseeds declined 2.7 percent and stood at USD 335.5 million due to a 6.3 percent fall in world price although its export volume increased 3.8 percent. Hence, revenue from oil seeds accounted for 9.3 percent of the total merchandise export earnings. Proceeds from pulses export slightly dropped (0.4 percent) and generated USD 233.8 million as export volume declined 20.7 percent despite a 25.6 percent increase in international price. As a result, its share in total merchandise export decreased to 6.5 percent from 7.9 percent in the previous year.

National Bank of Ethiopia Annual Report 2020/21 56 Earnings from exports of leather & leather products recorded a 49.4 percent decline due to the fall in export volume (35.5 percent) and international price (21.5 percent). Consequently, the share of leather and leather products in total merchandise export shrank to 1.0 percent from 2.4 percent last year. Similarly, receipts from textile & textile products fell 12.9 percent wholly on account of 17.4 percent decline in international price. The share of textile & textile products in total exports accounted for 4.1 percent compared to 5.7 percent a year ago. Export earnings from live-animals decreased 17.0 percent owing to 10.7 percent decline in export volume and 7.1 percent in international price. Thus, the share of live-animals in total merchandise export decreased to 1.2 percent from 1.8 percent a year ago. Table 5.3: Values of Major Export Items (In millions of USD) National Bank of Ethiopia 60 | Annual Report 2020/2 1 share of live-animals in total merchandise export decreased to 1.2 percent from 1.8 percent a year ago. Table 5.3 Values of Major Export Items (In millions of USD) Particulars 2018/19 2019/20 2020/21 Percentage Change A %share B %share C %share B/A C/B Coffee 764.1 28.7 855.9 28.6 909.4 25.1 12.0 6.3 Oilseeds 387.8 14.5 345.0 11.5 335.5 9.3 -11.0 - 2.7 Leather and Leather products 117.4 4.4 72.0 2.4 36.5 1.0 -38.6 -49.4 Pulses 272.3 10.2 234.8 7.9 233.8 6.5 -13.8 - 0.4 Meat & Meat Products 88.6 3.3 67.4 2.3 75.3 2.1 -23.9 11.7 Fruits & Vegetables 60.9 2.3 58.8 2.0 69.3 1.9 - 3.4 17.7 Textile & Textile Prod. 152.9 5.7 168.9 5.7 147.1 4.1 10.5 -2.9 Live Animals 45.8 1.7 54.1 1.8 44.9 1.2 18.1 -17.0 Chat 303.6 11.4 324.4 10.9 402.5 11.1 6.9 24.1 Gold 27.9 1.0 196.5 6.6 672.0 18.6 604.5 242.0 Flower 256.6 9.6 422.3 14.1 470.6 13.0 64.6 11.4 Electricity 55.8 2.1 66.4 2.2 90.5 2.5 19.2 36.2 Others 132.9 5.0 121.1 4.1 129.5 3.6 - 8.9 7.0 Total Export 2,666.5 100.0 2,987.7 100.0 3,617.0 100.0 12.0 21.1 Source: Ethiopian Customs Commission and Ethiopian Electric Power

National Bank of Ethiopia Annual Report 2020/21 57 +"'&$&#'+!"'(" OBBI5@+9DCFH ,CIF79 ',I6;;DBEJI6I>DC ,CIF79 ',I6;;DBEJI6I>DC

&>AA>DCH., =;/CF9=;BL7<5B;95FB=B;G:FCA,9@97H98LDCFH"H9AG D;;:: (>A,::9H %:6I=:G%:6I=:G)GD9J8IH )JAH:H ADL:G DA9 =6I D;;:: (>AH::9H )JAH:H %>K:C>B6AH =6I DA9 ADL:G

%:6I=:G %:6I=:G)GD9J8IH

(I=:GH =;/LDCFH,<5F9C:,9@97H98CAAC8=H=9G Source: NBE Staff Computation

+"'&$&#'+!"'(" OBBI5@+9DCFH ,CIF79 ',I6;;DBEJI6I>DC ,CIF79 ',I6;;DBEJI6I>DC

&>AA>DCH., =;/CF9=;BL7<5B;95FB=B;G:FCA,9@97H98LDCFH"H9AG D;;:: (>A,::9H %:6I=:G%:6I=:G)GD9J8IH )JAH:H ADL:G DA9 =6I D;;:: (>AH::9H )JAH:H %>K:C>B6AH =6I DA9 ADL:G

%:6I=:G %:6I=:G)GD9J8IH

(I=:GH =;/LDCFH,<5F9C:,9@97H98CAAC8=H=9G Source: NBE Staff Computation

National Bank of Ethiopia Annual Report 2020/21 58 Table 5.4: Volume of Major Exports (In millions of kg unless stated otherwise) Source: Ethiopian Customs Commission and Ethiopian Electric Power

+"'&$&#'+!"'(" OBBI5@+9DCFH -56@9/C@IA9C:&5>CFLDCFHG "CB>AA>DCHD;@<JCA:HHHI6I:9DI=:GL>H: )5FH=7I@5FG )9F79BH5;9<5B;9

D;;::

(>AH::9H

%:6I=:G6C9%:6I=:G )GD9J8IH

)JAH:H

&:6I&:6I)GD9J8IH GJ>IH/:<:I67A:H -:MI>A:-:MI>A:)GD9 %>K:C>B6AH =6I DA9&%&' )%* ADL:G A:8IG>8>IN"CBCD;@L= ,CIF79 I=>DE>6CJHIDBHDBB>HH>DC6C9I=>DE>6CA:8IG>8)DL:G ,CIF79 ',I6;;DBEJI6I>DC

&>AA>DC$< =;/LDCFH/C@IA9C:,9@97H98CAAC8=H=9G D;;:: (>A,::9H %:6I=:G%:6I=:G)GD9J8IH )JAH:H ADL:G DA9 =6I Source: NBE Staff Computation National Bank of Ethiopia 62 | Annual Report 2020/2 1 Table 5.4: Volume of Major Exports (In millions of kg unless stated otherwise) Particulars 2018/19 2019/20 2020/21 Percentage Change A B C B/A100- 100 C/B100- 100 Coffee 230.93 271.11 248.65 17.40 -8.28 Oilseeds 260.00 236.50 245.48 -9.04 3.79 Leather and Leather Products 5.59 3.55 2.29 -36.48 -35.50 Pulses 462.82 354.01 280.60 -23.51 -20.74 Meat & Meat Products 17.72 12.82 14.63 -27.65 14.13 Fruits & Vegetables 175.62 191.18 221.70 8.86 15.96 Textile & Textile Prod. 19.89 22.80 24.05 14.63 5.47 Live Animals 24.35 29.40 26.26 20.74 -10.66 Chat 53.57 57.14 71.21 6.67 24.63 Gold(In mn. of grams) 0.82 3.32 9.56 306.55 187.68 Flower 57.85 94.39 101.58 63.17 7.62 Electricity(In mn of kwh) 968.59 1,145.25 1,637.22 18.24 42.96 Source: Ethiopian Customs Commission and Ethiopian Electric Power Source: NBE Staff Computation 0 50 100 150 200 250 300 350 400 450 500 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (Million Kg.) Fig.V.4 Export Volume of Selected Commodities Coffee Oil Seeds Leather & Leather Products Pulses Flower Gold Chat

National Bank of Ethiopia Annual Report 2020/21 59 Table 5.5: Unit Value of Major Export Items (In USD/kg unless stated otherwise) Source: Ethiopian Customs Commission and Ethiopian Electric Power +"'&$&#'+!"'(" OBBI5@+9DCFH -56@9.B=H/5@I9C:&5>CFLDCFH"H9AG &# ,&$***++'+!)."* )5FH=7I@5FG )9F79BH5;9<5B;9

D;;:: (>AH::9H

%:6I=:G6C9%:6I=:G )GD9J8IH

)JAH:H &:6I&:6I)GD9J8IH

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%>K:C>B6AH =6I

DA9 )%* ADL:G A:8IG>8>IN.,@L=

,CIF79 I=>DE>6CJHIDBHDBB>HH>DC6C9I=>DE>6CA:8IG>8)DL:G ,CIF79 ',I6;;DBEJI6I>DC

.,$< DA9., B =;/.B=H/5@I9C:,9@97H98LDCFHCAAC8=H=9G D;;:: (>A,::9H %:6I=:G%:6I=:G)GD9J8IH )JAH:H ADL:G DA9 =6I Source: NBE Staff Computation 5.2.3. Import of Goods In 2020/21, total merchandise import bill reached USD 14.3 billion depicting 2.9 perFHQWLQFUHDVH RYHUODVW ¿VFDO \HDU VROHO\ GXH to higher imports of consumer goods. Hence, import of goods to GDP ratio stood at 12.8 percent. Consumer goods import bill stood at USD 5.5 billion, about 36.4 percent higher than last year due to a 51.1 percent surge in imports of non-durable goods despite 12.8 percent reduction in imports of durable goods. As a result, the share of consumer goods in total imported goods increased to 38.3 percent from 28.9 percent of in 2019/20. National Bank of Ethiopia 63 | Annual Report 2020/2 1 Table 5.5: Unit Value of Major Export Items (In USD/kg unless stated otherwise) Particulars 2018/19 2019/20 2020/21 Percentage Change A B C B/A100-100 C/B100-100 Coffee 3.31 3.16 3.66 -4.59 15.85 Oilseeds 1.49 1.46 1.37 -2.20 -6.30 Leather and Leather Products 20.99 20.28 15.92 -3.40 -21.49 Pulses 0.59 0.66 0.83 12.74 25.62 Meat & Meat Products 5.00 5.26 5.15 5.14 -2.11 Fruits & Vegetables 0.35 0.31 0.31 -11.22 1.51 Textile & Textile Prod. 7.69 7.41 6.12 -3.62 -17.40 Live Animals 1.88 1.84 1.71 -2.17 -7.09 Chat 5.67 5.68 5.65 0.18 -0.47 Gold(USD/grams) 34.12 59.12 70.28 73.28 18.88 Flower 4.44 4.47 4.63 0.85 3.56 Electricity(USD/kwh) 0.06 0.80 -4.70 Source: Ethiopian Customs Commission and Ethiopian Electric Power Source: NBE Staff Computation 0 10 20 30 40 50 60 70 80 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (USD/Kg,, Gold (USD/Gm)) Fig.V.5: Unit Value of Selected Export Commodities Coffee Oil Seeds Leather & Leather Products Pulses Flower Gold Chat

National Bank of Ethiopia Annual Report 2020/21 60 Payments for capital goods imports dropped 5.9 percent owing to higher import values of transport goods (12 percent) and industrial capital goods (4.5 percent). Imports of agricultural capital goods, however, rose 1.5 percent. Hence, the share of capital goods in total merchandise imports slowed down to 27.2 percent from 29.7 percent a year ago. Likewise, import value of fuel declined 7.1 percent to USD 1.9 billion on account of the fall in international price (5.2 percent) and import volume (1.9 percent). Hence, its share in total merchandise import contracted to 13.6 percent from 15.0 percent last year. Similarly, USD 2.7 million was paid for imSRUWV RI VHPL¿QLVKHG JRRGV ZKLFK VKRZHG a 13.8 percent declined despite 15.2 percent increase in import of fertilizer. As a result, VHPL¿QLVKHG JRRGV DFFRXQWHG IRU SHUcent of the total merchandise import which was lower than the 22.4 percent share in 2019/20. In the same way, import bill of raw materials declined 14.3 percent and accounted for 1.0 percent of the total goods import payment made a year ago (Table 5.6). Table 5.6: Value of Imports by End Use (In Millions of USD) Source: Ethiopian Customs Commission and Ethiopian Petroleum Enterprise National Bank of Ethiopia 65 | Annual Report 2020/2 1 Table 5.6: Value of Imports by End Use (In Millions of USD) Source: Ethiopian Customs Commission and Ethiopian Petroleum Enterprise Categories 2018/19 2019/20 2020/21 Percentage change A % share B % share C % share B/A C/B Raw Materials 151.5 1.0 162.2 1.2 138.9 1.0 7.0 -14.3 Semi-finished Goods 2,778.8 18.4 3,110.7 22.4 2,681.0 18.8 11.9 -13.8 Fertilizers 499.7 3.3 597.8 4.3 688.6 4.8 19.6 15.2 Fuel 2,600.7 17.2 2,088.1 15.0 1,940.8 13.6 -19.7 -7.1 Petroleum Products 2,493.4 16.5 2,003.7 14.4 1,839.3 12.9 -19.6 -8.2 Others 107.3 0.7 84.3 0.6 101.3 0.7 -21.4 20.1 Capital Goods 5,030.6 33.3 4,122.0 29.7 3,879.7 27.2 -18.1 -5.9 Transport 1,429.2 9.5 397.6 2.9 349.9 2.4 -72.2 -12.0 Agricultural 58.6 0.4 88.2 0.6 89.5 0.6 50.7 1.5 Industrial 3,542.9 23.4 3,636.2 26.2 3,440.3 24.1 2.6 -5.4 Consumer Goods 4,273.1 28.3 4,010.6 28.9 5,472.4 38.3 -6.1 36.4 Durables 1,200.7 7.9 920.5 6.6 803.1 5.6 -23.3 -12.8 Non-durables 3,072.3 20.3 3,090.1 22.3 4,669.3 32.7 0.6 51.1 Miscellaneous 277.2 1.8 387.8 2.8 175.0 1.2 39.9 -54.9 Total Import 15,112.0 100.0 13,881.3 100.0 14,287.9 100.0 -8.1 2.9

National Bank of Ethiopia Annual Report 2020/21 61 5.2.4. Direction of Trade 5.2.4.1. Export of Goods The major destinations for Ethiopian merchandise export during 2019/20 were Asia, Europe and Africa. Europe accounted for 41.3 percent of Ethiopia’s total export of goods. Switzerland was the largest market for Ethiopia’s export with a 45.4 percent share in total export earnings followed by the Netherlands (19.7 percent), Germany (8.9 percent), Belgium (6.1 percent), Italy (3.2 percent), United Kingdom (2.2 percent), France (1.9 percent), Turkey (1.5 percent) and Spain (1.0 percent). These countries had 89.9 percent share in Ethiopia’s total export of goods to Europe during 2019/20. Asia had a 31.0 percent share in Ethiopia’s total export of goods, with exports to Saudi Arabia accounting for 18.7 percent, followed by United Arab Emirates (14.7 percent), India (6.7 percent), Japan (6.6 percent), South Korea (6.1 percent), China (6.0 percent), Israel (6.0 percent), Singapore (4.5 percent), Indonesia (2.8 percent), Yemen (2.8 percent) and Taiwan (1.7 percent). These countries altogether constituted 76.6 percent of Ethiopia’s total export to Asia. Ethiopia’s export destined to African countries had a 17.4 percent share. The exports were mainly to Somalia (33.5 percent), Djibouti (15.0 percent), Sudan (13.5 percent), Kenya (1.5 percent), South Africa (1.0 percent), Nigeria (1.0 percent) and Egypt (0.8 percent), which altogether accounted for 66.2 percent of the total export of goods to Africa. America constituted 9.4 percent of Ethiopia’s total goods export of which, 81.2 percent went to the United States, 5.0 percent to Canada and 0.6 percent to Mexico. These countries accounted for 86.8 percent Ethiopia’s total export of goods to America. +"'&$&#'+!"'(" OBBI5@+9DCFH ,CIF79',I6;;DBE>A6I>DC "ADCFHC: CC8G I=>DE>6VH >BEDGIH A6G<:AN DG><>C6I:9 ;GDB H>6 L=>8=688DJCI:9;DGE:G8:CID;I=: IDI6A >BEDGIH D; I=: 8DJCIGN -=:H: >C8AJ9:

BEDGIH ;GDB =>C6 E:G8:CI "C9>6 E:G8:CI . E:G8:CI &6A6NH>6 E:G8:CI ,6J9> G67>6 E:G8:CI $JL6>IE:G8:CI "C9DC:H>6 E:G8:CI ,DJI= $DG:6 E:G8:CI ,>C<6EDG: E:G8:CI 6C9 -=6>A6C9 E:G8:CI L=>8= 6AID<:I=:G 8DCHI>IJI:9 E:G8:CI D; I=: IDI6A I=>DE>6C >BEDGIH ;GDB H>6 I=>DE>6VH >BEDGIH ;GDB JGDE: 688DJCI:9 ;DG E:G8:CI D;I=:IDI6A>BEDGIHL>I=I=: B6?DG>BEDGIH 7:>C<;GDB8DJCIG>:H>C8AJ9>C< -JG@:N E:G8:CI .@G6>C:E:G8:CI "I6AN E:G8:CI .C>I:9 $>C<9DB E:G8:CI :GB6CN E:G8:CI G6C8: E:G8:CI :A<>JB E:G8:CI +JHH>6 E:G8:CI +JB6C>6 E:G8:CI I=: ':I=:GA6C9H E:G8:CI ,L>IO:GA6C9 E:G8:CI 6C9 ,E6>C E:G8:CI L=>8= ?D>CIAN=69 E:G8:CIH=6G: >CD;I=>DE>6VH IDI6A>BEDGIH;GDBJGDE: I=>DE>6 >BEDGI:9 67DJI E:G8:CI D; >IH IDI6A B:G8=6C9>H: >BEDGIH ;GDB ;G>86 I=: B6?DG DG><>CH 7:>C< &DGD88D E:G8:CI <NEI E:G8:CI ,DJI= ;G>86 E:G8:CI ?>7DJI> E:G8:CI $:CN6 E:G8:CI 6C9 ,J96C E:G8:CI L=>8= >C 8DCIG>7JI>DC 8DCHI>IJI:9 E:G8:CI D; I=: IDI6A>BEDGIH;GDBI=:;G>86C 8DCI>C:CI "BEDGIH ;GDB B:G>86 688DJCI:9 ;DG E:G8:CI D; I=>DE>6VH IDI6A >BEDGIH L>I= I=: .C>I:9 ,I6I:H =6K>C< E:G8:CI H=6G: ;DAADL:9 7N 6C696 E:G8:CI 6C9 G6O>A E:G8:CI

=;/LDCFH6M9GH=B5H=CB ;G>86 JGDE: B:G>86 H>6 (8:6C>6 Source: NBE Staff Compilation

National Bank of Ethiopia Annual Report 2020/21 62 5.2.4.2 Import of Goods Ethiopia’s imports largely originated from Asia, which accounted for 61.3 percent of the total imports of the country. These include imports from China (37.3 percent), India (20.1 percent), U.A.E (10.7 percent), Malaysia (7.0 percent), Saudi-Arabia (5.6 percent), Kuwait (5.3 percent), Indonesia (3.7 percent), South Korea (2.5 percent), Singapore (1.6 percent) and Thailand (1.5 percent) which altogether constituted 95.4 percent of the total Ethiopian imports from Asia. Ethiopia’s, imports from Europe accounted for 22.0 percent of the total imports with the major imports being from countries including Turkey (24.0 percent), Ukraine (12.8 percent), Italy (10.9 percent), United Kingdom (9.0 percent), Germany (6.9 percent), France (6.0 percent), Belgium (6.0 percent), Russia (3.8 percent), Rumania (3.5 percent), the Netherlands (3.1 percent), Switzerland (2.4 percent) and Spain (2.0 percent), which jointly had 90.5 percent share in of Ethiopia’s total imports from Europe. Ethiopia imported about 8.9 percent of its total merchandise imports from Africa, the major origins being Morocco (45.8 percent), Egypt (22.2 percent), South Africa (11.3 percent), Djibouti (10.9 percent), Kenya (4.4 percent) and Sudan (2.3 percent), which in contribution constituted 97.0 percent of the total imports from the African continent. Imports from America accounted for 7.6 percent of Ethiopia’s total imports, with the United States having 88.4 percent share followed by Canada (4.3 percent) and Brazil (4.1 percent). +"'&$&#'+!"'(" OBBI5@+9DCFH ,CIF79',I6;;DBE>A6I>DC

=;/"ADCFHM(F=;=B ;G>86 JGDE: B:G>86 H>6 (8:6C>6 Source: NBE Staff Compilation

National Bank of Ethiopia Annual Report 2020/21 63 5.3 Services and Transfers 5.3.1 Services During 2020/21, net services account recorded USD 29.7 million in surplus compared ZLWK86' PLOOLRQ GH¿FLWODVW \HDU7KLV ZDVDWWULEXWHGWRWKHVLJQL¿FDQWLPSURYHPHQW in travel service (106.4 percent) and government services (170.1 percent). However, the surplus in transport service declined by 17.5 SHUFHQWZKLOHWKHGH¿FLWLQRWKHUVHUYLFHVDQG investment income widened by 12 percent and 9.1 percent, respectively. Table 5.7 Services Accounts (In Millions of USD) 5.3.2. Unrequited Transfers Net unrequited transfers grew 11.6 percent in 2020/21 and amounted to USD 7.5 billion, as net private transfers rose 18 percent outweighLQJWKH SHUFHQW UHGXFWLRQLQ QHW RI¿FLDO transfers. Meanwhile, transfers from private individuals, which comprised of 64.5 percent of total transfers during the period, registered 15.4 SHUFHQWJURZWKQHWRI¿FLDOWUDQVIHUVGURSSHG 10.2 percent. National Bank of Ethiopia 69 | Annual Report 20 20/ 21 5.3 Services and Transfers 5.3.1 Services During 2020/21, net services account recorded USD 29.7 million in surplus compared with USD 219 million deficit last year. This was attributed to the significant improvement in travel service (106.4 percent) and government services (170.1 percent). However, the surplus in transport service declined by 17.5 percent while the deficit in other services and investment income widened by 12 percent and 9.1 percent, respectively. Table 5.7 Services Accounts (In Millions of USD) No Particulars 2018/19 2019/20 2020/21 Percentage Change A B C D=B/A E=C/B 1 Investment Income (2+5) -603.3 -612.7 -557.2 1.5 -9.1 2 Interest, net (3-4) -603.3 -612.7 -557.1 1.5 -9.1 3 Credit 79.5 41.7 7.8 -47.5 -81.4 4 Debit 682.8 654.4 564.9 -4.2 -13.7 5 Dividend, net -0.1 6 NON-FACTOR SERVICES, net (7-8) 39.0 393.7 586.9 910.7 49.1 7 Exports of non-factor services 4,948.9 4,686.4 4,894.6 -5.3 4.4 Travel 868.1 853.8 1,124.8 -1.6 31.7 Transport 1 3,420.8 3,381.4 3,233.9 -1.2 -4.4 Gov't 2 354.6 131.0 184.9 -63.1 41.2 Other 3 305.4 320.2 351.0 4.8 9.6 8 Imports of non-factor services 4,910.0 4,292.7 4,307.7 -12.6 0.4 Travel 646.2 521.0 437.9 -19.4 -16.0 Transport 1 2,775.9 2,489.0 2,497.2 -10.3 0.3 Gov't 2 71.8 71.0 23.0 -1.1 -67.6 Other 3 1,416.1 1,211.7 1,349.6 -14.4 11.4 9 Net Services (10+11+12+13+14) -564.4 -219.0 29.7 -61.2 -113.5 10 Travel 221.9 332.8 686.9 50.0 106.4 11 Transport 644.9 892.5 736.7 38.4 -17.5 12 Gov't 282.8 59.9 161.9 -78.8 170.1 13 Other -1,110.7 -891.5 -998.6 -19.7 12.0 14 Investment Income -603.3 -612.7 -557.2 1.5 -9.1 Source: MoF, Transport and Telecommunication Companies, NBE- FEMEMD and Staff Compilation. 1/ Includes Ethiopian Airlines receipts and payments 2/ Includes transactions with Embassies and international organizations such as UN-ECA, AU, EU, IMF and WB 3/ Includes communication, construction, insurance, financial, information, other business

National Bank of Ethiopia Annual Report 2020/21 64 Table 5.8: Unrequited Transfers (In Millions of USD) Source: National Disaster Risk Management Commission, MoF and NBE National Bank of Ethiopia 71 | Annual Report 20 20/ 21 Table 5.8: Unrequited Transfers (In Millions of USD) S/N Particulars 2018/19 2019/20 2020/21 Percentage Change A % share B % share C % share B/A C/B 1 Private Transfers, net

5,975.2

74.1

5,185.7

77.3

6,118.4

81.7 -13.2 18.0 1.1 Receipts

5,993.4

73.7

5,210.4

76.2

6,140.0

80.3 -13.1 17.8 NGO's

701.0

8.6

935.3

13.7

1,208.6

15.8 33.4 29.2 Cash

561.7

6.9

532.7

7.8

715.6

9.4 -5.2 34.3 Food

139.3

1.7

402.6

5.9

493.1

6.4 189.0 22.5 Other Private Individuals 5,292.4 65.0 4,275.1 62.5 4,931.3 64.5 -19.2 15.4 1.2 Payments

18.2

24.5

24.6

18.9

21.5

13.3 35.5 -12.6 2 Official Transfers, net

2,086.7

25.9

1,525.0

22.7

1,368.9

18.3 -26.9 -10.2

2.1 Receipts

2,142.6

26.3

1,630.8

23.8

1,509.6

19.7 -23.9 -7.4 Cash

2,133.5

26.2

1,630.8

23.8

1,509.4

19.7 -23.6 -7.4 Food

3.2

Other

6.0

0.1 -100.0 2.2 Payments

55.9

75.5

105.8

81.1

140.7

86.7 89.1 33.0 Total Receipts 8,136.0 100.0

6,841.2

100.0

7,649.6

100.0 -15.9 11.8 Total Payments 74.1 100.0 130.4 100.0 162.3 100.0 76.0 24.4 3 Net Transfers 8,061.9 100.0 6,710.7 100.0 7,487.3 100.0 -16.8 11.6 Source: National Disaster Risk Management Commission, MoF and NBE

National Bank of Ethiopia Annual Report 2020/21 65 5.4. Current Account ,QFXUUHQWDFFRXQWGH¿FLWLQFOXGLQJ RI¿FLDOWUDQVIHUVQDUURZHGWR86'ELOOLRQ from USD 4.4 billion last year as merchandise WUDGHGH¿FLWFRQWUDFWHGDGH¿FLWLQQHWVHUYLFHV turned to a surplus, and net private transfers LPSURYHGLQFRQWUDVWWRVORZGRZQLQQHWRI¿- cial transfers. 5.5 Capital Account Capital account recorded USD 3.8 billion in surplus, which was 11.7 percent lower than that of last year largely owing to the 65.8 perFHQWGHFOLQHLQORQJWHUPQHWRI¿FLDOFDSLWDO 17.7 percent and 6.6 percent net private long term capital. Foreign direct investment, however, registered 64.1 percent increment and reached USD 4 billion, (including USD 845 million receipt from Telecom privatization). 5.6 Changes in Reserve Position Net foreign asset 5 of the banking system amounted to USD 298.7 million at the end of 2020/21 as net foreign assets of commercial banks increased to 685.1 million while that of the NBE showed a USD 386.4 million drawdown. Thus, gross international reserves as of June 30, 2021 was adequate to cover 2.2 months of imports of goods and non-factor services. 5.7 External Debt By end of 2020/21, Ethiopia’s external debt stock reached USD 29.5 billion, depicting a 2.2 percent annual growth mainly due to increased debt (8 percent) owed to multilateral creditors although debt from bilateral and commercial sources declined by 7.4 percent and 7.6 percent, respectively. Hence, the country’s external debt stock to GDP ratio stood at 26.5 percent. Commercial debt stock reached USD 3.3 billion, showing 7.6 percent year-on-year reduction and accounting for 11.3 percent of the total debt stock. Of the total debt stock, 66 percent was owed to multilateral and 22.7 percent to bilateral creditors. However, the external debt burden, measured by debt services to export of goods and non-factor services ratio, decreased to 21.7 percent from 26.1 percent last year.

National Bank of Ethiopia Annual Report 2020/21 66 Table 5.9: External Public Debt (In Millions of USD) Weighted average exchange rate of the Birr in the inter-bank foreign exchange market was Birr 39.0163/USD at the end of 2020/21 showing a 24.9 percent annual depreciation (Table 5.10). In the retail foreign exchange market, the average buying and selling rates of the Birr depreciated by 26.2 and 26.7 percent, respectively resulting in a 2.1 percent spread between the two rates. 5.8 Developments in Foreign Exchange Markets 5.8.1. Developments in Nominal Exchange Rate National Bank of Ethiopia 73 | Annual Report 2020/21 Table 5.9: External Public Debt (In Millions of USD) Particulars 2018/19 2019/20 2020/21 Percentage Change A B C D=B/A E=C/B Annual Debt

2,812.0

3,328.3

1,411.1 18.4 -57.6 Debt Stock

27,076.2

28,894.6

29,537.4 6.7 2.2 Multilateral

15,973.9

18,037.5

19,488.2 12.9 8.0 Bilateral

7,290.1

7,242.4

6,708.6 -0.7 -7.4 Commercial

3,812.2

3,614.7

3,340.7 -5.2 -7.6 Debt Services

2,036.2

2,003.3

1,843.9 -1.6 -8.0 Principal repayments

1,406.8

1,396.3

1,370.0 -0.7 -1.9 Interest payments

629.4

607.0

473.9 -3.6 -21.9 Debt Stock to GDP Ratio (in %) 28.2 26.8 26.5 -4.9 -1.1 Debt stock to export of goods and non-factor services

3.6

3.8

3.5 5.9 -7.8 Receipt from Goods & Non-factor Services

7,615.4

7,674.0

8,511.5 0.8 10.9 Debt service ratio (In percent )1/ 26.7 26.1 21.7 -2.4 -17.0 Arrears Principal Interest Relief Principal Interest Source: MoF and NBE 1/ Ratio of debt service to receipts from export of goods and non-factor services

National Bank of Ethiopia Annual Report 2020/21 67 Table 5.10: Inter-Bank Exchange Rates of Birr per USD Table 5.11: End Period Mid-Market Rates (USD per Unit of Foreign Currency) National Bank of Ethiopia 74 | Annual Report 2020/21 5.8. Developments in Foreign Exchange Markets 5.8.1. Developments in Nominal Exchange Rate Weighted average exchange rate of the Birr in the inter-bank foreign exchange market was Birr 39.0163/USD at the end of 2020/21 showing a 24.9 percent annual depreciation (Table 5.10). In the retail foreign exchange market, the average buying and selling rates of the Birr depreciated by 26.2 and 26.7 percent, respectively resulting in a 2.1 percent spread between the two rates. Table 5.10: Inter-Bank Exchange Rates of Birr per USD Period Average Weighted Rate Amount Traded in millions of USD Number of Trades Total o/w Among CBs Total o/w Among CBs 2018/19 28.0543 12.6 0.0 251.0 0.0 Qtr. I 27.4295 3.1 0.0 62.0 0.0 Qtr. II 27.8137 3.3 0.0 65.0 0.0 Qtr. III 28.2700 3.2 0.0 63.0 0.0 Qtr. IV 28.7039 3.1 0.0 61.0 0.0 2019/20 31.3427 12.6 0.0 256.0 0.0 Qtr. I 29.0947 3.2 0.0 64.0 0.0 Qtr. II 30.2107 3.3 0.0 66.0 0.0 Qtr. III 32.2146 3.1 0.0 62.0 0.0 Qtr. IV 33.8507 3.0 0.0 64.0 0.0 2020/21 39.0163 12.4 0.0 248.0 0.0 Qtr. I 35.7771 3.1 0.0 62.0 0.0 Qtr. II 37.8663 3.3 0.0 65.0 0.0 Qtr. III 39.8933 3.1 0.0 61.0 0.0 Qtr. IV 42.5284 3.0 0.0 60.0 0.0 Source: NBE, Foreign Exchange Monitoring & Reserve Management Directorate and EEAIRD Staff Compilation National Bank of Ethiopia 75 | Annual Report 2020/21 Table 5.11: End Period Mid-Market Rates (USD per Unit of Foreign Currency) Currency 2018/19 2019/20 2020/21 Percentage Change A B C B/A C/B Pound Sterling 1.2701 1.2322 1.3834 -2.98 12.27 Swedish Kroner 0.1078 0.1076 0.1173 -0.19 8.99 Djibouti Franc 0.0056 0.01 0.00 Swiss Franc 1.0226 1.0588 1.0855 3.54 2.53 Saudi Riyal 0.2666 0.2665 0.2666 -0.03 0.03 UAE Dirham 0.2722 0.00 0.00 Canadian Dollar 0.7615 0.7322 0.8080 -3.84 10.34 Japanese Yen 0.0093 0.0093 0.0090 0.62 -3.06 Euro 1.1371 1.1284 1.1902 -0.77 5.48 SDR 1.3896 1.3783 1.4286 -0.81 3.65 Source: Staff Compilation On the other hand, at end period midmarket exchange rate, the US dollar depreciated against Pound Sterling (12.3 percent), Canadian Dollar (10.3 percent), Euro (5.5 percent), Swedish Kroner (9.0 percent), SDR (3.7 percent), Swiss Franc (2.5 percent) and Saudi Riyal (0.03 percent), while it appreciated against Japanese Yen (3.1 percent). Nevertheless, USD remained stable vis-à-vis Djibouti Franc and UAE Dirhams (Table 5.11).

National Bank of Ethiopia Annual Report 2020/21 68 On the other hand, at end period mid-market exchange rate, the US dollar depreciated against Pound Sterling (12.3 percent), Canadian Dollar (10.3 percent), Euro (5.5 percent), Swedish Kroner (9.0 percent), SDR (3.7 percent), Swiss Franc (2.5 percent) and Saudi Riyal (0.03 percent), while it appreciated against Japanese Yen (3.1 percent). Nevertheless, USD remained stable vis-à-vis Djibouti Franc and UAE Dirhams (Table 5.11). Table 5.12: End Period Mid-Market Rates (Birr per Unit of Foreign Currency) Likewise, the Birr depreciated against all major international currencies, such as Pound Sterling (40.2 percent), Canadian Dollar (37.8 percent), Swedish Kroner (36.1 percent), Euro (31.7 percent), SDR (29.5 percent), Swiss Franc (28.1 percent), USD (24.9 percent), Djibouti Franc (24.9 percent), Saudi Riyal (24.9 percent), UAE Dirham (24.9 percent), and Japanese Yen (21.1 percent) (Table 5. 12). 5.8.2. Movements in the Real Effective Exchange Rates The real effective exchange rate (REER) of the Birr has been appreciating since 2010/11 DV UHVXOW RI KLJKHU GRPHVWLF LQÀDWLRQ DQG stronger US dollar relative to its major trading partners’ currencies. However, the Birr exchange rate deprecated in real terms in 2017/18 and 2019/20 but it appreciated in 2018/19 and 2020/21. The Birr appreciated by 0.3 percent in 2020/21 as the gains from the surge in trading partners’ price was neutralL]HG E\WKH ULVLQJ GRPHVWLFLQÀDWLRQ DQGWKH appreciation of Birr vis-à-vis that of trading partners. Meanwhile, the nominal effective exchange UDWH 1((5 RI WKH %LUU DSSUHFLDWHG VLJQL¿- cantly by 80.1 percent compared to 8.9 percent depreciation in the preceding year due to DVLJQL¿FDQWGHSUHFLDWLRQRI6XGDQHVH3RXQG vis-à-vis USD following the decision of the &HQWUDO%DQN RI 6XGDQWR ÀRDWWKH FXUUHQF
(Table 5.13). National Bank of Ethiopia 76 | Annual Report 2020/21 Table 5.12: End Period Mid-Market Rates (Birr per Unit of Foreign Currency) Currency 2018/19 2019/20 2020/21 Percentage Change A B C B/A C/B USD 29.0555 35.1571 43.9095 21.00 24.89 Pound 36.9033 43.3216 60.7444 17.39 40.22 Swedish Kroner 3.1325 3.7833 5.1500 20.78 36.12 Djibouti Franc 0.1630 0.1973 0.2464 21.01 24.89 Swiss Franc 29.7121 37.2230 47.6655 25.28 28.05 Saudi Riyal 7.7471 9.3708 11.7077 20.96 24.94 UAE Dirhams 7.9095 9.5705 11.9531 21.00 24.89 Canadian Dollar 22.1257 25.7429 35.4767 16.35 37.81 Japanese Yen 0.2694 0.3280 0.3971 21.75 21.07 Euro 33.0390 39.6713 52.2610 20.07 31.74 SDR 40.3755 48.4571 62.7291 20.02 29.45 Source: Staff Compilation Likewise, the Birr depreciated against all major international currencies, such as Pound Sterling (40.2 percent), Canadian Dollar (37.8 percent), Swedish Kroner (36.1 percent), Euro (31.7 percent), SDR (29.5 percent), Swiss Franc (28.1 percent), USD (24.9 percent), Djibouti Franc (24.9 percent), Saudi Riyal (24.9 percent), UAE Dirham (24.9 percent), and Japanese Yen (21.1 percent) (Table 5. 12). 5.8.2. Movements in the Real Effective Exchange Rates The real effective exchange rate (REER) of the Birr has been appreciating since 2010/11 as result of higher domestic inflation and stronger US dollar relative to its major trading partners’ currencies. However, the Birr exchange rate deprecated in real terms in 2017/18 and 2019/20 but it appreciated in 2018/19 and 2020/21. The Birr appreciated by 0.3 percent in 2020/21 as the gains from the surge in trading partners’ price was neutralized by the rising domestic inflation and the appreciation of Birr visà-vis that of trading partners.

National Bank of Ethiopia Annual Report 2020/21 69 Table 5.13: Trends in Real and Nominal Effective Exchange Rates Source: NBE Staff Compilation An increase in REERI and NEERI indicates appreciation and vice versa. Where: REERI = Real Effective Exchange Rate Index NEERI = Nominal Effective Exchange Rate Index 5.8.3. Foreign Exchange Transactions In FY 2020/21, the amount of foreign exchange transacted in the inter-bank foreign exchange market was USD 12.4 million, showing 1.2 percent reduction relative to last year. All the foreign exchange traded in the inter-bank foreign exchange market was supplied by the National Bank of Ethiopia (Table 5.10). 'XULQJWKHVDPH¿VFDO\HDUIRUH[EXUHDXVRI commercial banks purchased USD 202 milOLRQ IURP FXVWRPHUVZKLFKZDV VLJQL¿FDQWO
lower than that of the preceding year. Similarly, their foreign exchange sales declined sharply by 63.2 percent to USD 92.4 million (Table 5.14). National Bank of Ethiopia 77 | Annual Report 2020/21 Meanwhile, the nominal effective exchange rate (NEER) of the Birr appreciated significantly by 80.1 percent compared to 8.9 percent depreciation in the preceding year due to a significant depreciation of Sudanese Pound vis-à-vis USD following the decision of the Central Bank of Sudan to float the currency (Table 5.13). Table 5.13: Trends in Real and Nominal Effective Exchange Rates Fiscal Year REERI NEERI Percentage Change REERI NEERI 2011/12 139.4 43.2 13.5 0.7 2012/13 140.2 42.0 0.6 -2.7 2013/14 140.8 40.7 0.4 -3.3 2014/15 157.6 42.3 11.9 4.0 2015/16 159.3 41.2 1.1 -2.7 2016/17 171.2 41.8 7.5 1.6 2017/18 164.0 37.2 -4.2 -10.9 2018/19 198.6 42.4 21.1 13.9 2019/20 179.0 38.6 -9.9 -8.9 2020/21 179.5 69.6 0.3 80.1 Source: NBE Staff Compilation An increase in REERI and NEERI indicates appreciation and vice versa. Where: REERI = Real Effective Exchange Rate Index NEERI = Nominal Effective Exchange Rate Index 5.8.3. Foreign Exchange Transactions In FY 2020/21, the amount of foreign exchange transacted in the inter-bank foreign exchange market was USD 12.4 million, showing 1.2 percent reduction relative to last year. All the foreign exchange traded in the inter-bank foreign exchange market was supplied by the National Bank of Ethiopia (Table 5.10). During the same fiscal year, forex bureaus of commercial banks purchased USD 202 million from customers which was significantly lower than that of the preceding year. Similarly, their foreign exchange sales declined sharply by 63.2 percent to USD 92.4 million (Table 5.14).

National Bank of Ethiopia Annual Report 2020/21 70 Table 5.14: Foreign Exchange Transactions by Forex Bureaus of Commercial Banks (In Millions of USD) (In Millions of USD) Name of Forex Bureau 2018/19 2019/20 2020/21 Percentage Change A B C D E F E/C F/D Purchases Sales Purchases Sales Purchases Sales Purchases Sales Commercial Bank of Ethiopia 318.2 172.5 226.5 90.4 127.2 22.7 -43.8 -74.9 Bank of Abyssinia 16.3 29.4 7.1 18.5 2.5 9.1 -64.7 -50.7 Dashen Bank 26.2 29.9 15.8 22.0 15.0 12.7 -4.9 -42.4 Awash International Bank 28.0 45.9 6.2 38.3 3.5 12.9 -43.1 -66.2 Construction & Business Bank 0.0 Wegagen Bank 27.2 15.0 12.1 6.4 4.4 2.7 -63.6 -57.5 United Bank 38.0 26.9 110.9 15.5 18.9 5.1 -83.0 -66.9 Development Bank 0.1 7.1 0.0 0.4 0.0 0.1 13.2 -75.2 Nib International Bank 10.2 7.5 3.4 5.4 3.0 2.8 -12.9 -47.7 Lion International Bank 65.8 5.3 53.8 4.1 4.1 0.3 -92.4 -93.5 Oromia International Bank 23.8 15.4 18.6 12.1 11.3 2.9 -39.4 -75.8 Zemen Bank 2.3 16.0 0.3 13.2 0.3 11.7 -8.8 -11.5 Cooperative Bank of Oromia 6.1 12.2 0.6 9.7 0.7 3.8 12.7 -61.0 Buna International Bank 20.1 4.3 6.2 1.9 1.3 0.5 -78.5 -72.8 Birhan International Bank 4.1 10.0 0.5 6.1 1.3 2.2 141.6 -64.3 Abay Bank 17.4 1.2 1.7 0.9 0.8 0.5 -53.3 -46.7 Addis International Bank 10.4 3.5 5.4 2.0 3.5 0.8 -36.0 -63.0 Debub Global Bank 1.5 1.9 5.5 1.7 3.9 0.8 -28.1 -53.3 Enat Bank 5.0 5.1 6.9 2.3 0.3 0.8 -95.6 -64.7 Total 620.7 409.1 481.4 250.8 202.0 92.4 -58.0 -63.2 Average Exchange Rate 31.3088 31.8546 31.2573 31.8315 39.0402 39.8018 24.9 25.0 Source: Staff Compilation

GENERAL GOVERNMENT FINANCE

National Bank of Ethiopia Annual Report 2020/21 72 6.1. General ,QWKHRYHUDOO¿VFDOSHUIRUPDQFHRI WKH JHQHUDO JRYHUQPHQW LQGLFDWHG D VLJQL¿- FDQWGHWHULRUDWLRQLQWKHRYHUDOO¿VFDOGH¿FLW (excluding grants) amounting to Birr 120.1 billion (Table 7.4). Similarly, the ratio of priPDU\GH¿FLWWR*'3LQFUHDVHGWRSHUFHQW compared to a year earlier (Table 7.1). General government revenue (including grants) rose 21.2 percent over last year (Table 7.2) and the total revenue to GDP ratio reached 11.0 percent, which was slightly KLJKHU WKDQ ODVW ¿VFDO \HDU *HQHUDO JRYHUQment expenditure also showed a 24.8 percent increment although its ratio to GDP dropped to 13.8 percent from 14.2 percent a year ago (Table 7.1). Table 6.1: Measuring Fiscal Sustainability VI. GENERAL GOVERNMENT FINANCE National Bank of Ethiopia 79 | Annual Report 20 20/ 21 VI. GENERAL GOVERNMENT FINANCE 6.1 General In 2020/21, the overall fiscal performance of the general government indicated a significant deterioration in the overall fiscal deficit (excluding grants) amounting to Birr 120.1 billion (Table 7.4). Similarly, the ratio of primary deficit to GDP increased to 2.8 percent compared to a year earlier (Table 7.1). General government revenue (including grants) rose 21.2 percent over last year (Table 7.2) and the total revenue to GDP ratio reached 11.0 percent, which was slightly higher than last fiscal year. General government expenditure also showed a 24.8 percent increment although its ratio to GDP dropped to 13.8 percent from 14.2 percent a year ago (Table 7.1). Table 7.1: Measuring Fiscal Sustainability Fiscal Year PD/GDP IP/RR Ddebt/GDP R(Debt) R(GDP) Exp/GDP Rev/GDP R(OR) 2008/09 -0.9 3.2 26.9 11.5 35.1 17.4 12.1 34.8 2009/10 -1.3 2.9 27.5 17.1 14.2 18.8 14.2 34.1 2010/11 -1.6 2.8 26.8 29.8 33.4 18.6 13.7 28.3 2011/12 -1.2 2.2 25.6 39.5 46.1 16.8 13.9 48.8 2012/13 -2.0 2.4 27.4 23.4 15.5 18.1 14.6 20.6 2013/14 -2.6 2.6 28.6 28.4 21.1 17.5 13.8 17.8 2014/15 -2.5 2.9 31.8 31.1 16.6 18.6 15.1 27.7 2015/16 -1.9 3.1 31.3 24.6 16.9 17.4 14.7 23.6 2016/17 -3.3 3.2 34.4 28.7 16.9 18.0 14.0 11.3 2017/18 -3.0 4.3 35.7 24.3 20.0 16.1 12.3 5.1 2018/19 -2.5 4.3 35.7 22.8 22.5 15.3 11.5 15.5 2019/20 -2.5 3.8 35.3 23.6 25.2 14.2 10.5 13.8 2020/21 -2.8 5.4 34.1 24.5 28.6 13.8 11.0 25.5 Source: Staff Computation PD=Primary Deficit IP/RR = Share of interest payments in Recurrent revenue Ddebt/GDP = Ratio of Domestic Debt to GDP R(Debt) = Growth rate of Domestic Debt R(GDP) = Growth rate of GDP at current market price Exp/GDP = Ratio of General Government Expenditure to GDP Rev/GDP = Ratio of General Government Revenue to GDP R(OR) = Growth rate of ordinary Revenue

National Bank of Ethiopia Annual Report 2020/21 73 A total of Birr 478.9 billion revenue (including grants), was collected in 2020/21 depicting 21.2 percent annual growth. Of the total revenue, domestic revenue, at Birr 444.6 billion registered a 25.5 percent year-on-year surge. About 87.4 percent of domestic revenue was generated from taxes and 12.6 percent from non-taxes. Tax revenue expanded by 24.8 percent, mainly owing to 31.6 percent growth in direct WD[HVZKLFKFRPSULVHLQFRPH SUR¿WWD[HV and urban & rural land use fees. Income and SUR¿WWD[HVDORQHDFFRXQWHGIRUSHUFHQW of the direct taxes. On the other hand, Birr 214.8 billion was collected from indirect taxes which constituted 55.3 percent of the total tax revenues. Revenue from import duties and taxes increased 6.2 percent and covered 49.6 percent of the indirect tax revenue. Revenue from non-tax sources amounted to Birr 55.8 billion, showing 30.3 percent annual increase largely due to higher income from charges and fees, government investment sales of goods and services and other revenues. External grants, however, were just Birr 34.3 billion, about 15.6 percent lower than that of last year. All in all, performance of total revenue and grants was 94.9 percent of the annual plan set for 2020/21 (Table 7.2). 6.2 Revenue and Grants

National Bank of Ethiopia Annual Report 2020/21 74 National Bank of Ethiopia 81 | Annual Report 20 20/ 21 Table 7.2: Summary of General Government Revenue by Component (in millions of Birr) Particulars 2019/20 2020/21 Percentage Change Performance Rate [A] [B] [c] [C/A] [C/B] Pre. Act Revised Budget Pre. Act Total Revenue and Grants 394,965.8 504,726.5 478,888.1 21.2 94.9 Total Revenue 1/ 354,312.8 449,019.9 444,582.6 25.5 99.0 Tax Revenue 311,476.5 380,653.3 388,763.5 24.8 102.1

Direct Tax Revenue 132,214.5 144,457.3 173,965.5 31.6 120.4 1.1 Income and Profit Taxes 129,479.3 140,363.6 169,788.3 31.1 121.0 Personal 49,869.6 56,706.7 66,032.0 32.4 116.4 Business 64,664.1 59,532.0 87,012.6 34.6 146.2 Others 2/ 14,945.6 24,124.8 16,743.6 12.0 69.4 1.2 Rural Land Use Fee 358.0 452.1 391.9 9.5 86.7 1.3 Urban Land Use Fee 2,377.3 3,641.7 3,785.3 59.2 103.9
Indirect Taxes 179,261.9 236,196.0 214,798.0 19.8 90.9 2.1 Domestic Taxes 78,886.5 114,816.5 108,160.1 37.1 94.2 2.2 Foreign Trade Taxes 100,375.4 121,379.5 106,637.8 6.2 87.9 Import 100,375.4 121,379.5 106,637.8 6.2 87.9 Export
Non-Tax Revenue 42,836.3 68,366.6 55,819.2 30.3 81.6 3.1 Charges and Fees 4,095.2 3,983.7 5,394.6 31.7 135.4 3.2 Govt. Invt. Income 3/ 17,488.9 23,083.0 20,926.3 19.7 90.7 3.3 Reimb. And Property Sales 203.4 663.5 680.3 234.5 102.5 3.4 Sales of Goods & Services 5,794.2 6,358.5 7,399.0 27.7 116.4 3.5 Others 4/ 15,254.6 34,277.9 21,419.0 40.4 62.5
Grants 40,653.0 55,706.6 34,305.5 (15.6) 61.6 Source: Ministry of Finance 1/ It does not include privatization proceeds 2/ Others include rental income tax, with holding income tax on imports, interest income tax, capital gains tax, agricultural income and other incomes 3/Gov. Investment income includes : Residual surplus, capital charge, interest payments and state dividend 4/ Other extra ordinary, miscellaneous, pension contribution and other revenue Table 6.2: Summary of General Government Revenue by Component (in millions of Birr)

National Bank of Ethiopia Annual Report 2020/21 75

National Bank of Ethiopia 82 | Annual Report 20 20/ 21

In million Birr Fiscal Year Fig.VI.1: Trend of General Government Revenue by Component Total Revenue and Grants Tax Revenue Direct tax revenue Indirect tax revenue Non-tax revenue Grants 6.3. Expenditure During 2020/21, total general government expenditure stood at Birr 599 billion which was 24.8 percent higher than last year due to an increase both in current and capital expenditures. Current expenditure rose 31.8 percent and amounted to Birr 363.6 billion and accounted for 60.7 percent of the total expenditure. The greater portion of the expenditure was alloFDWHGWR¿QDQFHVRFLDOVHUYLFHV Similarly, capital expenditure increased 15.3 percent and reached Birr 235.4 billion on account of higher spending on economic, social and general developments. Capital expenditure constituted 39.3 percent of the total expenditure. In summary, expenditure performance was 95.7 percent of the annual budget plan (Table 7.3).

National Bank of Ethiopia Annual Report 2020/21 76 +"'&$&#'+!"'(" OBBI5@+9DCFH

Fig.VI.2: Trends in General Government Expenditure by Component Total Expenditure Current Expenditure Capital Expenditure National Bank of Ethiopia 84 | Annual Report 20 20/ 21 Table 7.3: Summary of General Government Expenditure (in millions of Birr) Particulars 2019/20 2020/21 Percentage Change Performance [A] [B] [C] Rate Pre actual Revised Budget Pre actual [C/A] [C/B] Total Expenditure 480,143.2 625,992.9 599,006.7

24.8

95.7

Current Expenditure 275,967.0 362,012.0 363,596.9

31.8

100.4 General Services 89,920.2 93,221.9 129,678.9

44.2

139.1 Economic Services 36,323.1 44,369.6 42,497.7

17.0

95.8 Social Services 130,356.0 152,838 160,366.1

23.0

104.9 Interest and Charges 13,481.1 19,765.1 24,001.0

78.0

121.4 Others (miscellaneous) 5,886.6 51,817.1 7,053.2

19.8

13.6 2. Capital Expenditure 204,176.1 263,980.9 235,409.7

15.3

89.2 Economic Development 132,629.1 172,150.0 146,692.3

10.6

85.2 Social Development 51,316.1 61,925.8 59,535.2

16.0

96.1 General Development 20,231.0 29,905.2 29,182.2

44.2

97.6 3. Special programs - - - - - Source: Ministry of Finance Table 6.3: Summary of General Government Expenditure

National Bank of Ethiopia Annual Report 2020/21 77 'H¿FLW)LQDQFLQJ General government budget operations in UHVXOWHGLQ%LUU ELOOLRQ GH¿FLW which was 41 percent higher than the previous \HDU7DEOH7KHGH¿FLWZDV¿QDQFHGE
borrowing from external and domestic sources. National Bank of Ethiopia 86 | Annual Report 20 20/ 21 7.4 Deficit Financing General government budget operations in 2020/21 resulted in Birr 120.1 billion deficit which was 41 percent higher than the previous year (Table 7.4). The deficit was financed by borrowing from external and domestic sources. Table 7.4: Summary of General Government Finance (in millions of Birr) Particulars 2019/20 2020/21 Percentage Change performance rate [A] [B] [C] Pre. Act Revised Budget Pre. Act [C/A] [C/B] Total Revenue and Grants 394,965.8 504,726.5 478,888.1 21.2 94.9 Revenue 354,312.8 449,019.9 444,582.64 25.5 99.0 Grants 40,653.0 55,706.6 34,305.49 (15.6) 61.6 Total Expenditure 480,143.2 625,992.9 599,006.7 24.8 95.7 Current Expenditure 275,967.0 362,012.0 363,596.91 31.8 100.4 Capital Expenditure 204,176.1 263,980.9 235,409.74 15.3 89.2 Special Programs Overall Surplus/ Deficit (Including Grants) (85,177.4) (121,266.4) (120,118.5) 41.0 99.1 (Excluding Grants) (125,830) (176,973) (154,424) 22.7 87.3 Total Financing 85,177.4 121,266.4 120,118.5 41.0 99.1 Net External Borrowings 59,528.8 34,865.8 21,808.28 (63.4) 62.5 Gross Borrowing 66,127.3 46,621.2 26,803.66 (59.5) 57.5 o/w Special Programs Amortization Paid 6,598.5 11,755.4 4,995.38 (24.3) 42.5 HIPC relief & MDRI Net Domestic Borrowings

42,104.0 86,400.7

108,684.90 158.1 125.8 Banking System 5,214.8 54,120.90 937.8 Non-Banking Systems 36,889.2 54,564.00 47.9 Privatization Receipts - - - Others and Residuals (16,455.4) (0) (10,374.66) (37.0) Source: Ministry of Finance Table 6.4: Summary of General Government Finance (in millions of Birr)

INVESTMENT

National Bank of Ethiopia Annual Report 2020/21 79 VII. INVESTMENT A total of 785 projects with Birr 34.1 billion capital became operational in 2020/21. The QXPEHU RI SURMHFWV ZDV VLJQL¿FDQWO\ KLJKHU than 84 projects a year ago. All of the projects were private investments. Of the total investment projects, 752 or 95.8 percent, with registered capital of Birr 31.1 billion (91.3 percent) were domestic investment while the remaining 33 projects (4.2 percent) with Birr 3.0 billion capital were foreign. Average capital per project for domestic investors was Birr 41.4 million while that of foreign investors was Birr 89.9 million, implying that foreign investment projects were more capital intensive than domestic projects. Job opportunity created by these investment projects was estimated at 11,768 permanent and 6,132 temporary workers; showing significant job expansion compared to the previous year (Table 7.1).

National Bank of Ethiopia Annual Report 2020/21 80 Table 7.1: Number of Projects, Capital and Jobs Created by Operational Investment (Capital in millions of Birr) National Bank of Ethiopia 88 | Annual Report 20 20/ 21 Table 7.1: Number of Projects, Capital and Jobs Created by Operational Investment (Capital in millions of Birr) Components 2018/19 2019/20 2020/21 Percentage change A B C Share C/A C/B

Total Investment Number

976

785

100.0 -19.6 834.5 Capital

8,951.7

1,320.3

34,073.4

100.0 280.6 2,480.7 Permanent Workers

22,631

3,211

11,768

100.0 -48.0 266.5 Temporary Workers

10,541

1,634

6,132

100.0 -41.8 275.3 1.1. Total Private Number

976

785

100.0 -19.6 834.5 Capital

8,951.7

1,320.3

34,073.4

100.0 280.6 2,480.7 Permanent Workers

22,631

3,211

11,768

100.0 -48.0 266.5 Temporary Workers

10,541

1,634

6,132

100.0 -41.8 275.3 1.1.1. Domestic Number

913

752

95.8 -17.6 1,500.0 Capital

7,836.4

675.5

31,105.6

91.3 296.9 4,505.1 Permanent Workers

12,692

110

8,578

72.9 -32.4 7,698.2 Temporary Workers

6,896

272

5,013

81.8 -27.3 1,743.0 1.1.2. Foreign Number

4.2 -47.6 -10.8 Capital

1,115.3

644.9

2,967.7

8.7 166.1 360.2 Permanent Workers

9,939

3,101

3,190

27.1 -67.9 2.9 Temporary Workers

3,645

1,362

1,119

18.2 -69.3 -17.8 1.2.Public Number - - - - - - Capital - - - - - - Permanent Workers - - - - - - Temporary Workers - - - - - - Source: Ethiopian Investment Commission

National Bank of Ethiopia Annual Report 2020/21 81 Fig.VII.1: Number of Operational Investment Projects by Type +"'&$&#'+!"'(" OBBI5@+9DCFH =;/"" 'IA69FC:(D9F5H=CB5@"BJ9GHA9BH)FC>97HG6M-MD9 ,CIF79I=>DE>6C"CK:HIB:CIDBB>HH>DC =;/"" 5D=H5@C:(D9F5H=CB5@ "BJ9GHA9BH)FC>97HG6M-MD9 ,CIF79 I=>DE>6C"CK:HIB:CIDBB>HH>DC

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Source: Ethiopian Investment Commission. Fig.VII.2: Capital of Operational Investment Projects by Type +"'&$&#'+!"'(" OBBI5@+9DCFH =;/"" 'IA69FC:(D9F5H=CB5@"BJ9GHA9BH)FC>97HG6M-MD9 ,CIF79I=>DE>6C"CK:HIB:CIDBB>HH>DC =;/"" 5D=H5@C:(D9F5H=CB5@ "BJ9GHA9BH)FC>97HG6M-MD9 ,CIF79 I=>DE>6C"CK:HIB:CIDBB>HH>DC

'IA69FC:DFC>97HG 295F DB:HI>8 DG:><C )J7A>8 ( -((( )(((( )-((( *(((( *-((( *()-#). *().#)/ *()/#)0 ()0#)1 ()1#( ((#)

Source: Ethiopian Investment Commission

National Bank of Ethiopia Annual Report 2020/21 82 7.1. Investment by Sector Of the total investment projects, 30.8 percent were engaged in manufacturing, 30.3 percent in real estate, renting & business activities, 28.5 percent in construction, 4.3 percent in tour operation, transport & communication, 2.3 percent in hotel & restaurant, 1.1 percent in health & social work and 2.7 percent in other sectors. As for investment capital, manufacturing constituted 35.5 percent followed by real estate renting & business activities (30.6 percent), hotel & restaurant (17.3 percent), construction (5.3 percent), health & social work (2.5 percent), tour operation, transport & communication (2 percent) and the remaining sectors accounted for 6.8 percent (Table 7.2). Table: 7.2: Numbers and Capital of Operational Investment Projects by Sector (Capital in millions of Birr)

National Bank of Ethiopia 90 | Annual Report 20 20/ 21 7.1. Investment by Sector Of the total investment projects, 30.8 percent were engaged in manufacturing, 30.3 percent in real estate, renting & business activities, 28.5 percent in construction, 4.3 percent in tour operation, transport & communication, 2.3 percent in hotel & restaurant, 1.1 percent in health & social work and 2.7 percent in other sectors. As for investment capital, manufacturing constituted 35.5 percent followed by real estate renting & business activities (30.6 percent), hotel & restaurant (17.3 percent), construction (5.3 percent), health & social work (2.5 percent), tour operation, transport & communication (2 percent) and the remaining sectors accounted for 6.8 percent (Table 7.2). Table: 7.2: Numbers and Capital of Operational Investment Projects by Sector (Capital in millions of Birr) Sectors 2018/19 2019/20 2020/21 Percentage share No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Manufacturing 337

4,647.0 42 710.1 242 12,097.0 30.8 35.5 Agriculture, hunting and forestry 27

297.7 1 10.5 6 114.5 0.8 0.3 Real estate, renting and Business activities 404

1,909.3 15 98.3 238 10,426.5 30.3 30.6 Hotel and restaurants 7

39.5 3 307.9 18 5,887.4 2.3 17.3 Education 6 68.2 1 2.5 2 13.0 0.3 0.0 Health and social work 5 25.3 3 18.0 9 864.1 1.1 2.5 Construction 176

1,745.7 15 135.5 224 1,799.1 28.5 5.3 Tour operation, transport and communication 5

20.0 2 17.9 34 669.2 4.3 2.0 Whole sale, retail trade and repair service - - - - 3 381.5 0.4 1.1 Mining and quarrying 4 38.2 - - - - - - Electricity, gas, steam and water supply - - - - - - - - Other community, social and personal service activities 2 82.0 - - 1 5.0 0.1 - Others 3 78.8 2 19.6 8 1,816.1 1.0 5.3 Grand Total

976

8,951.7 84

1,320.3 785 34,073.4 100.0 100.0 Source: Ethiopian Investment Commission.

National Bank of Ethiopia Annual Report 2020/21 83 Fig.VII.3: Distribution of Operational Investment Capital by Sector in 2020/21 National Bank of Ethiopia 91 | Annual Report 20 20/ 21 Fig.VII.3: Distribution of Operational Investment Capital by Sector in 2020/21 Source: Ethiopian Investment Commission Others*: Includes agriculture, hunting and forestry, education, health & social work, tour operation & transport, mining & quarrying, other community, social and personal service activities, wholesale, retail trade & repair service and others. Manufacturing 36% Real estate, renting and Business activities 31% Hotel and restaurants 17% Construction 5% Others 11% Source: Ethiopian Investment Commission Others*: Includes agriculture, hunting and forestry, education, health & social work, tour operation & transport, mining & quarrying, other community, social and personal service activities, wholesale, retail trade & repair service and others. 7.2. Distribution by Region In terms of regional distribution, 711 of the projects (90.6 percent) with a registered capital of Birr 30.8 billion (90.5 percent) were located in Addis Ababa while 41 projects (5.2 percent) having Birr 285.2 million capital where in Amhara region. There were no operational investment projects in other regions during the review period. Although, 33 projects (4.2 percent) with Birr 3 billion capital became operational in multiregional projects GXULQJWKH¿VFDO\HDU7DEOH

National Bank of Ethiopia Annual Report 2020/21 84 Table 7.3: Number and Capital of Operational Projects by Region (Capital in millions of Birr) National Bank of Ethiopia 92 | Annual Report 20 20/ 21 7.2. Distribution by Region In terms of regional distribution, 711 of the projects (90.6 percent) with a registered capital of Birr 30.8 billion (90.5 percent) were located in Addis Ababa while 41 projects (5.2 percent) having Birr 285.2 million capital where in Amhara region. There were no operational investment projects in other regions during the review period. Although, 33 projects (4.2 percent) with Birr 3 billion capital became operational in multiregional projects during the fiscal year (Table 7.3). Table 7.3: Number and Capital of Operational Projects by Region (Capital in millions of Birr) Regions 2018/19 2019/20 2020/21 Percentage share No. of projects Investment Capital No. of projects Investment Capital No. of projects Investment Capital No. of projects Investment Capital Tigray 49

265.6 1 15.0 - - 0.0 0.0 Afar - - - - - - 0.0 0.0 Amhara 20

152.5 6 10.9 41 285.2 5.2 0.8 Oromia 157

560.4 - - - - 0.0 0.0 Somali - - - - - - 0.0 0.0 Benishangu l-Gumuz - - - - - 0.0 0.0 SNNPR - - - - - - 0.0 0.0 Gambella - - - - - - 0.0 0.0 Harari - - - - - - 0.0 0.0 Addis Ababa 681

6,838.4 40 649.6 711 30,820.4 90.6 90.5 Dire Dawa - - - - - - 0.0 0.0 Multiregion al Projects 69 1,134.7 37 644.9 33 2,967.7 4.2 8.7 Grand Total 976

8,951.7 84 1,320.3 785 34,073.4 100.0 100.0 Source: Ethiopian Investment Commission.

INTERNATIONAL DEVELOPMENTS

National Bank of Ethiopia Annual Report 2020/21 86 The global economic activity in 2020 was contracted by 3.2 percent while it projected to grow at 6.0 percent in 2021, moderating to 4.9 percent in 2022. The projected growth is mainly driven from advanced economies, particularly the 8QLWHG 6WDWHV UHÀHFWLQJ WKH DQWLFLSDWHG OHJLVODWLRQ RI DGGLWLRQDO ¿VFDO VXSport in the second half of 2021 and improved health metrics more broadly across the group. The growth in advanced economy prospects have been revised up for 2021 and 2022 from expected further normalization in the second half of 2021 as vaccine rollout proceeds and ZLWK DGGLWLRQDO ¿VFDO VXSSRUW 7KH VLJQL¿- cantly improved outlook for the US economy derives from the impact of anticipated legislation boosting infrastructure investment and strengthening the social safety net in the second half of 2021. The additional support is expected to lift 2021 US GDP growth by 0.3 percentage points and 2022 growth by 1.1 percentage points, with positive spillovers to trading partners. This shift is partially offset by the forecast downgrade in 2021 for Japan, UHÀHFWLQJ WLJKWHU UHVWULFWLRQV LQ WKH ¿UVW KDOI of the year as caseloads picked up. Japan is anticipated to see a stronger rebound in the second-half of 2021, as vaccination proceeds and the economy fully reopens, improving its growth forecast for 2022. Similar strengthening momentum is expected in France, Germany, Italy, and Spain later this year, carrying over into 2022. For emerging market and developing economies the forecast is revised down 0.4 percentage points in 2021 compared with the April world economic outlook, largely because of growth markdowns for emerging Asian economies. Growth prospects in India have been downgraded following the severe second COVID wave during March to May and expected slow recovery in con- ¿GHQFH IURP WKDW VHWEDFN 6LPLODU G\QDPics are at work in the ASEAN-5 group (Indonesia, Malaysia, Philippines, Thailand, Vietnam), where recent infection waves are causing a drag on activity. Meanwhile, China’s 2021 forecast is revised down 0.3 percentage point on a scaling back of public investment DQGRYHUDOO¿VFDOVXSSRUW Growth forecasts for other regions have generally been revised up for 2021, largely UHÀHFWLQJ WKH VWURQJHUWKDQDQWLFLSDWHG RXWWXUQVLQWKH¿UVWTXDUWHU7KHIRUHFDVWXSJUDGH for Latin America and the Caribbean results mostly from upward revisions in Brazil and 0H[LFR UHÀHFWLQJ EHWWHUWKDQ H[SHFWHG ¿UVW quarter outturns, favorable spillovers to Mexico from the improved outlook for the United States, and booming terms of trade in Brazil. Projections are revised up for the Middle East and Central Asia due to robust activity in some countries (such as Morocco and Pakistan), partially offset by downgrades of some others. In Saudi Arabia, the non-oil growth projection has been revised up, but VIII. INTERNATIONAL DEVELOPMENTS 8.1. International Economic Developments 8.1.1. Overview of the World Economy

National Bank of Ethiopia Annual Report 2020/21 87 the overall GDP forecast has been downgraded relative to the April world economic outlook on account of subdued oil production below the OPEC+ (Organization of the Petroleum Exporting Countries, including Russia and other non-OPEC oil exporters) quota earlier in the year. The 2021 forecast for sub-Saharan Africa is unchanged relative to the April world economic outlook, with an upgrade for South Africa following a strong SRVLWLYHVXUSULVHLQWKH¿UVWTXDUWHURIIVHWE
downward revisions in other countries. The worsening pandemic developments in sub-Saharan Africa are expected to weigh on the region’s recovery. For low-income developing country group, the 2021 growth forecast is marked down 0.4 percentage point, with the slow rollout of vaccines as the main factor weighing on the recovery (partially offset by stronger external demand from advanced economies).

National Bank of Ethiopia Annual Report 2020/21 88 Table 8.1: Overview of World Economic Outlook and Projection -,-, Particulars 2019 2020 Projection 2021 2022 World Output 2.8 -3.2 6.0 4.9 Advanced Economies 1.6 -4.6 5.6 4.4 United States 2.2 -3.5 7.0 4.9 Euro Area 1.3 -6.5 4.6 4.3 Japan 0.0 -4.7 2.8 3.0 United Kingdom 1.4 -9.8 7.0 4.8 Emerging Market & Developing Economies 3.7 -2.1 6.3 5.2 Middle East and Central Asia 1.4 -2.6 4.0 3.7 Sub-Saharan Africa 3.2 -1.8 3.4 4.1 Nigeria 2.2 -1.8 2.5 2.6 South Africa 0.2 -7.0 4.0 2.2 World Trade Volume (goods & services)* 0.9 -8.2 9.7 7.0 Imports Advanced Economies 2.0 -9.0 9.0 7.3 Emerging Market and Developing Economies -0.9 -8.0 12.1 7.1 Exports Advanced Economies 1.2 -9.4 8.0 6.6 Emerging Market and Developing Economies 0.4 -5.2 11.6 5.8 Commodity Prices (US dollars) Oil -10.2 -32.7 56.6 2.6 Non- fuel(average based on world commodity import weights) 0.8 6.7 26.5 -0.8 Consumer Prices** Advanced Economies 1.4 0.7 1.6 1.7 United Stated 1.8 1.2 2.3 2.4 Euro Area 1.2 0.3 1.4 1.2 Japan 0.5 0.0 0.1 0.7 Emerging Market & Developing Economies 5.1 5.4 6.5 5.4 China 2.9 2.4 1.2 1.9 Mexico 3.6 3.4 3.5 3.1 Turkey 15.2 12.3 13.6 11.8 Brazil 3.7 3.2 4.6 4.0 Russia 4.5 3.4 4.5 3.4 Sub-Sahara Africa 8.5 10.8 9.8 7.8 Angola 17.1 22.3 22.3 13.1 Nigeria 11.4 13.2 16.0 13.5 Ghana 7.2 9.9 9.0 8.2 Source: IMF, World Economic Outlook, July, 2021 *IMF, World Economic Outlook, October 2021 ** IMF, World Economic Outlook, October 2020 for the period 2019 and April 2021 for the period 2020-22

National Bank of Ethiopia Annual Report 2020/21 89 8.1.2. World Trade Global volume of world trade in goods and services during 2020 is declined by 8.2 percent in volume terms. It is estimated to expand by 9.7 percent in 2021 and is projected to increase by 7.0 percent in 2022. Imports of goods and services by advanced economies declined by 9.0 percent in 2020 and estimated to rise by 9.0 percent in 2021. Similarly, imports by emerging market and developing economies declined by 8.0 percent and forecasted to grow by 9.0 percent and 7.3 percent in 2021 and 2022, respectively. Likewise, export of goods and services from advanced economies is also declined by 9.4 percent in 2020 and forecasted to expand by 8.0 percent and 6.6 percent in 2021 and 2022, respectively. Likewise, export of goods and services from emerging market and developing economies is declined by 5.2 percent for the year 2020 and projected to increase by 11.6 percent and 5.8 percent during 2021 and 2022, respectively. ,QÀDWLRQDQG&RPPRGLW\3ULFHV +HDGOLQHLQÀDWLRQUDWHVKDYHLQFUHDVHGUDSLGly in the United States and in some emerging market and developing economies. In most FDVHV ULVLQJ LQÀDWLRQ UHÀHFWV SDQGHPLF UHlated supply-demand mismatches and higher commodity prices compared to their low base from a year ago. And price pressures are expected to subside in 2022. In some emerging market and developing economies, price pressures are expected to persist because of elevated food prices, lagged effects of higher oil prices, and exchange rate depreciation lifting the prices of imported goods. However, great XQFHUWDLQW\ VXUURXQGV LQÀDWLRQ SURVSHFWV² primarily stemming from the path of the pandemic, the duration of supply disruptions, and KRZLQÀDWLRQH[SHFWDWLRQVPD\HYROYHLQWKLV environment. Commodity prices are expected to increase at DVLJQL¿FDQWO\IDVWHUSDFHWKDQDVVXPHGLQWKH April 2021 world economic outlook. Amid the strengthening global recovery, oil prices are expected to rise close to 60 percent above their low base in 2020. Non-oil commodity prices are expected to rise close to 30 percent above OHYHOV UHÀHFWLQJSDUWLFXODUO\VWURQJLQcreases in the price of metals and food. 8.1.4. Exchange Rate In foreign exchange markets, the euro appreciated slightly in trade-weighted terms in the context of an improved economic outlook for the euro area. Since 11 March 2021, the nominal effective exchange rate of the euro, as measured against the currencies of 42 of the euro areas most important trading partners, strengthened by 0.5 percent. The euro appreciated against the US dollar E\SHUFHQWUHÀHFWLQJWKHLPSURYHGRXWlook for the euro area economy as the pace of vaccination picked up, coupled with the weakness of the dollar, which declined from the end of March alongside US Treasury yields. The euro also appreciated against the Japanese yen (by 2.7 percent), the pound sterling (by

National Bank of Ethiopia Annual Report 2020/21 90 0.4 percent) and the Chinese renminbi (by 0.3 percent). The euro appreciated strongly (by 17.5 percent) against the Turkish lira, which experienced broad-based weakness, while depreciating markedly (by 8.5 percent) against the Brazilian real, which broadly strengthened on the back of rebounding commodity prices. The euro also depreciated against the Swiss franc (by 1.4 percent) and the currencies of several non-euro area EU Member States, including the Hungarian forint, the Czech koruna and the Polish zloty. 2020/21, the global economy is projected to grow 6.0 percent while commodity prices of both oil and non-oil commodities, are expectHG WR LQFUHDVH VLJQL¿FDQWO\ 7KHVH GHYHORSments will have both positive and negative impact on the Ethiopian economy. While improvements in the global economy will create demand for our export commodities, and help 8.2. Implications of International Economic Developments on the Ethiopia Economy Ethiopia to register robust growth in merchandise export receipts, however, higher price of oil will exert higher pressure on the country’s trade balance and international resources.

National Bank of Ethiopia Annual Report 2020/21 91

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National Bank of Ethiopia Annual Report 2020/21 155 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 156 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 157 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 158 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 159 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 160 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 161 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 162National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 163 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 164 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 165 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 166 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 167 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 168 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 169 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 170 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 171 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 172National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 173 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 174 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 175 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 176 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 177 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 178National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 179 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 180National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 181 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 182 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 183 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 184 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 185 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 186 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 187 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 188National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 189 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 190National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 191 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 192National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 193 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 194 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 195 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 196 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 197 National Bank Of Ethiopia Annual Financial Statements For the year ended 30 June 2021 ( In Ethiopian Birr)

National Bank of Ethiopia Annual Report 2020/21 STATISTICAL ANNEXES

National Bank of Ethiopia Annual Report 2020/21 199 Table 1: Estimates of Agricultural Production and Cultivated Areas of Major Grain Crops (For Private Peasant Holdings) Cultivated areaz Total productiony Cultivated areaz Total productiony Cultivated areaz Total productiony Cultivated areaz Total productiony Cultivated areaz Total productiony Cultivated areaz Total productiony Cereals 9974.3 231288.0 10,219.4 253,847.2 10,232.5 267,789.7 10,358.8 277,638.3 10,478.2 296,726.5 10,538.3 302,054.3 Teff 2866.1 44713.8 3,017.9 50,204.4 3,023.3 52,834.0 3,076.5 54,034.7 3,101.2 57,357.1 2,928.2 55,099.6 Barley 944.4 18567.0 959.3 20,249.2 951.9 20,529.9 811.7 17,675.1 950.7 23,780.1 926.1 23,391.1 Wheat 1664.6 42192.6 1,696.1 45,378.5 1,696.9 46,429.6 1,747.9 48,380.7 1,789.4 53,152.7 1,897.4 57,801.3 Maize 2111.5 71508.4 2,135.6 78,471.7 2,128.9 83,958.8 2,367.7 94,927.7 2,274.3 96,357.3 2,526.2 105,570.9 Sorghum 1854.7 43233.0 1,882.0 47,521.0 1,896.3 51,692.5 1,829.6 50,243.6 1,828.2 52,655.8 1,679.3 45,173.5 Millet 465.5 9402.5 456.2 10,170.6 456.0 10,308.2 446.9 10,356.2 455.6 11,259.6 480.3 12,030.2 Oats 22.1 402.7 24.0 491.8 25.8 526.3 14.8 301.4 21.3 457.5 15.5 305.0 Rice 45.5 1268.1 48.4 1,360.0 53.1 1,510.1 63.3 1,718.5 57.6 1,706.3 85.3 2,682.2 Pulses 1652.8 27692.7 1,549.9 28,146.3 1,598.8 29,785.8 1,620.4 30,113.4 1,563.8 30,052.0 1,675.0 32,000.0 Horse Beans 444.0 8486.5 427.7 8,780.1 437.1 9,217.6 492.2 10,419.5 466.7 10,067.5 504.6 10,706.4 Chick Peas 258.5 4726.1 225.6 4,441.5 242.7 4,994.2 239.7 4,591.7 208.9 4,351.9 220.7 4,573.2 Haricot Beans 357.3 5402.4 290.2 4,839.2 306.1 5,209.7 288.6 4,883.1 281.1 4,855.4 311.6 5,525.6 Field Peas 221.4 3233.9 212.5 3,481.4 220.5 3,685.1 216.7 3,608.1 223.7 3,905.6 219.9 3,762.4 Lentils 100.7 1339.3 113.7 1,662.7 119.0 1,751.4 99.7 1,408.1 87.4 1,193.3 84.5 1,130.2 Soya beans 38.2 812.4 36.6 812.3 38.0 864.6 64.7 1,494.5 54.5 1,256.2 83.8 2,086.8 Grass peas 159.1 2876.7 151.3 2,971.0 143.0 2,866.0 130.5 2,604.1 145.5 3,126.8 143.9 2,899.2 Gibto 16.8 187.2 19.9 274.1 17.8 246.2 17.5 239.5 19.2 360.5 15.6 293.1 Oil Seeds 859.1 7848.1 804.8 8,392.0 846.4 8,550.7 747.8 7,850.1 820.8 8,421.4 766.2 7,774.6 Neug 281.0 2563.3 281.2 3,024.3 290.4 3,233.4 257.9 2,963.2 258.0 2,916.4 191.8 2,148.0 Linseed/Flax 85.4 885.5 80.4 879.1 79.0 882.0 83.6 966.8 69.2 796.9 78.9 804.6 Rapeseed 30.0 550.4 23.7 434.0 18.0 328.6 20.6 382.1 23.0 420.5 7.9 125.8 Sunflower 7.4 67.3 6.7 79.5 7.9 95.7 6.4 80.3 7.6 95.7 4.2 42.9 Ground nuts 67.1 1039.4 74.9 1,296.4 80.8 1,451.7 84.2 1,440.9 87.9 1,565.3 113.5 2,050.7 Sesame 388.2 2742.2 337.9 2,678.7 370.1 2,559.0 294.8 2,016.6 375.1 2,626.5 369.9 2,602.6 Total 12486.3 266828.8 12,574.1 290,385.6 12,677.8 306,126.3 12,727.1 315,602.0 12,862.8 335,199.8 12,979.5 341,828.9 Percentage change Cereals -1.8 -2.0 2.5 9.8 0.1 5.5 1.2 3.7 1.2 6.9 0.6 1.8 Pulses 6.1 3.6 (6.2) 1.6 3.2 5.8 1.4 1.1 (3.5) (0.2) 7.1 6.5 Oil Seeds 0.4 3.3 -6.3 6.9 5.2 1.9 (11.6) (8.2) 9.8 7.3 (6.7) (7.7) Total -0.6 -1.3 0.7 8.8 0.8 5.4 0.4 3.1 1.1 6.2 0.9 2.0 Source: Central Statistical Authority (CSA) z In Thousands of Hectars. y In Thousands of Quintals.

Estimates are corrected and adjusted based on the previous survey of CSA and the 1993/94 MOA-CSA crop assessment result. ** Unreliable estimates but included in the total " Others ". ' Meher' Season refers to the period starting from the month of September to February. Years/ Variables 2018/19 2008 2009 2010 2011 2020/21 2013 2012 2019/20 2015/16 2016/17 2017/18

National Bank of Ethiopia Annual Report 2020/21 200 (In millions of Birr) ϮϬϬϲ ϮϬϬϳ ϮϬϬϴ ϮϬϬϵ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϯͬϭϰ ϮϬϭϰͬϭϱ ϮϬϭϱͬϭϲ ϮϬϭϲͬϭϳ ϮϬϭϳͬϭϴ ϮϬϭϴͬϭϵ ϮϬϭϵͬϮϬ ϮϬϮϬͬϮϭ Agriculture, Hunting and Forestry 498,733.6 530,341.5 542,700.2 579,022.9 599,331.4 622,220.3 648,711.8 684,733.9 Crop 312,338.7 334,768.6 346,293.6 374,649.8 392,291.8 404,049.6 422,966.5 446,919.4 Animal Farming and Hunting 142,601.9 149,246.8 146,959.5 153,170.4 154,038.0 163,279.5 168,722.4 178,571.3 Forestry 46,751.8 48,368.2 49,447.1 51,202.7 53,001.7 54,891.1 57,022.9 59,243.3 Fishing 1,057.4 1,381.1 1,381.9 1,389.4 1,546.7 1,581.8 1,614.0 1,653.4 Mining and Quarrying 8,506.2 6,328.5 6,116.8 4,296.9 3,402.8 2,658.9 5,089.3 10,960.7 Manufacturing 63,764.0 75,383.5 89,246.7 111,249.6 117,410.7 127,986.7 137,601.5 144,618.9 Large and Medium Scale Manufacturing 40,743.0 50,174.6 61,687.4 73,528.2 77,966.5 87,691.9 96,268.6 102,266.2 Small Scale and Cottage Industries 25,895.4 26,874.8 27,559.2 37,721.5 39,444.2 40,294.7 41,332.9 42,352.7 Electricity and Water 9,165.6 9,577.4 11,015.5 11,552.5 11,929.0 14,115.4 15,136.4 16,476.2 Construction 144,420.0 190,028.6 237,545.0 286,749.6 331,691.4 381,443.8 419,078.0 446,721.7 Whole Sale and Retail Trade 166,337.5 186,850.2 202,241.5 215,351.0 241,936.3 268,037.0 285,293.1 303,217.7 Hotels and Restaurants 27,758.6 35,971.8 41,601.3 41,625.2 44,335.3 48,143.8 49,220.4 50,484.9 Transport and Communications 166,337.5 186,850.2 202,241.5 215,351.0 241,936.3 104,436.2 105,579.6 113,090.7 Financial Intermediation 27,758.6 35,971.8 41,601.3 41,625.2 44,335.3 57,368.6 65,290.3 71,158.1 Real Estate, Renting and Business Activities 62,114.2 64,690.9 67,062.9 70,005.2 74,364.3 79,942.0 87,510.2 95,299.7 Public Administration and Defense 54,681.3 57,979.5 62,259.2 70,488.5 76,754.1 83,662.0 85,612.2 89,770.1 Education 35,679.7 38,963.0 42,385.6 41,031.0 42,520.8 44,221.6 44,784.1 45,694.9 Health and Social Work 12,510.3 14,137.2 15,669.4 16,767.9 18,153.4 20,747.2 23,414.2 26,554.3 Other Community , Social & Personal Services 17,193.4 17,828.7 18,371.3 19,198.4 20,178.0 21,454.2 21,995.5 22,426.8 Private Households with Employed Persons 14,758.3 15,401.2 16,063.8 16,633.3 17,276.0 17,707.4 18,115.5 18,515.9 Total 1,227,058.7 1,355,280.4 1,463,883.2 1,613,519.9 1,739,254.9 1,895,726.7 2,014,046.2 2,141,377.8 Less : FISIM 10,512.8 12,393.0 14,485.8 17,038.3 19,763.6 21,037.4 24,527.2 27,214.5 Gross Value Added at Constant Basic Prices 1,216,015.3 1,342,555.9 1,449,397.5 1,596,481.6 1,719,491.3 1,874,689.3 1,989,519.0 2,114,163.2 Taxes on Products 104,547.5 115,169.8 118,700.0 120,645.6 114,575.2 112,468.2 119,603.2 113,917.7 GDP at Constant Market Prices 1,320,688.1 1,457,857.6 1,568,097.5 1,717,127.2 1,834,066.5 1,987,157.5 2,109,122.2 2,228,081.0 Source: MoF Sectors/Year Table 2: GDP By Economic Activity at Constant Prices

National Bank of Ethiopia Annual Report 2020/21 201 Table 3: Growth Rate Of GDP By Economic Activity at Constant Prices ;/ŶƉĞƌĐĞŶƚͿ ϮϬϬϰ ϮϬϬϱ ϮϬϬϲ ϮϬϬϳ ϮϬϬϴ ϮϬϬϵ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϭͬϭϮ͘ ϮϬϭϮͬϭϯ ϮϬϭϯͬϭϰ ϮϬϭϰͬϭϱ ϮϬϭϱͬϭϲ ϮϬϭϲͬϭϳ ϮϬϭϳͬϭϴ ϮϬϭϴͬϭϵ ϮϬϭϵͬϮϬ ϮϬϮϬͬϮϭ Agriculture, Hunting and Forestry 4.9 7.1 5.4 6.3 2.3 6.7 3.5 3.8 4.3 5.6 Crop 5.0 8.2 6.6 7.2 3.4 8.2 4.7 3 4.7 5.7 Animal Farming and Hunting 5.4 5.2 2.1 4.7 -1.5 4.2 0.6 6 3.3 5.8 Forestry 3.1 3.3 4.2 3.5 2.2 3.6 3.5 3.8 3.9 3.9 Fishing 21.3 19.4 32.5 30.6 0.1 0.5 11.3 2.3 2 1.7 Mining and Quarrying 12.7 6.3 -3.2 -25.6 -3.3 -29.8 -20.8 -21.9 91.4 115.4 Manufacturing 11.8 16.9 16.6 18.2 18.4 24.7 5.5 7.7 7.5 5.1 Large and Medium Scale Manufacturing 15.9 24.2 21.6 23.1 22.9 19.2 6.0 10 9.8 6.2 Small Scale and Cottage Industries 4.2 1.9 4.3 3.8 2.5 36.9 4.6 3 2.6 2.5 Electricity and Water 13.5 10.0 6.8 4.5 15.0 4.9 3.3 4 7.2 8.9 Construction 31.5 38.7 23.9 31.6 25.0 20.7 15.7 15 9.9 6.6 Whole Sale and Retail Trade 12.5 10.1 17.7 12.3 8.2 6.5 12.3 11.7 6.4 6.3 Hotels and Restaurants 10.1 19.1 26.6 29.6 15.6 0.1 6.5 9 2.2 2.6 Transport and Communications 12.6 16.5 12.7 13.3 13.7 15.1 6.4 21 1.1 7.0 Financial Intermediation 23.6 -12.2 14.3 7.5 9.6 18.3 10.7 10.1 10.2 9.0 Real Estate, Renting and Business Activities 3.8 3.9 3.9 4.1 3.7 4.4 6.2 7.5 9.5 8.9 Public Administration and Defense 3.1 7.6 11.0 6.0 7.4 13.2 8.9 9 2.3 4.9 Education 4.5 10.1 2.6 9.2 8.8 -3.2 3.6 4 1.8 2.0 Health and Social Work 9.4 12.3 19.3 13.0 10.8 7.0 8.3 14.3 12.9 13.4 Other Community , Social & Personal Services 12.4 18.4 3.8 3.7 3.0 4.5 5.1 6.3 2.5 2.0 Private Households with Employed Persons 16.1 8.2 4.4 4.4 4.3 3.5 3.9 2.5 2.3 2.2 Total 8.6 9.9 10.3 10.4 8.0 10.2 7.8 8.9 6.2 6.3 Less : FISIM -10.6 6.4 19.4 17.9 16.9 17.6 16.0 7 14.3 11.0 Gross Value Added at Constant Basic Prices 8.7 9.9 10.3 10.4 8.0 10.1 7.7 9 6.1 6.3 Taxes on Products 8.0 18.3 9.9 10.2 3.1 1.6 -5.0 -1.8 6.3 -4.7 GDP at Constant Market Prices 8.6 10.6 10.3 10.4 7.6 9.5 6.8 8.3 6.1 5.6 Source: MoFED /ŶĚƵƐƚƌǇͬzĞĂƌ

National Bank of Ethiopia Annual Report 2020/21 202 Table 4: Value of Aggregate Output, Consumption, Investment and Savings at Current Prices (In Millions of Birr) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2010 /11 2011 /12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Gross Value Added at Current Basic Prices 489,127.3 710,011.5 818,870.1 1,002,350.9 1,226,637.4 1,449,397.5 1,703,798.2 2,064,789.2 2,543,623.0 3,182,998.0 4,119,419.9 Taxes on Products, net 39,431.0 56,882.0 70,618.0 86,098.0 105,128.7 118,700.0 128,755.5 137,583.5 152,600.0 191,351.0 221,967.3 GDP at Current Market Prices 528,579.8 766,915.5 889,644.9 1,088,631.8 1,331,983.7 1,568,097.5 1,832,553.7 2,202,372.7 2,696,223.0 3,374,349.0 4,341,387.1 Incomes from ROW, net (1,120.2) (1,659.8) (1,942.8) (2,914.6) (5,275.1) (5,122.4) (10,884.1) (14,349.1) (13,104.0) (18,270.0) (21,735.9) Gross National Income at Current Basic Prices 488,007.1 708,351.7 816,927.4 999,436.3 1,221,362.3 1,444,275.0 1,692,914.1 2,050,440.2 2,530,519.0 3,164,728.0 4,097,683.9 Gross National Income at Current Market Prices 527,459.6 765,255.7 887,702.1 1,085,717.2 1,326,708.6 1,562,975.0 1,821,669.6 2,188,023.6 2,683,118.6 3,356,079.5 4,319,651.2 Current Transfers from ROW, net 74,261.2 86,849.9 93,355.1 106,357.3 128,400.8 155,964.2 154,959.4 188,527.3 240,392.0 218,029.0 300,237.5 Gross National Disposable Income 601,720.8 852,105.6 981,057.2 1,192,074.5 1,455,109.4 1,718,939.2 1,976,628.9 2,376,550.9 2,923,510.0 3,574,109.0 4,619,888.7 Government Final Consumption Expenditure 62,346.1 72,783.5 91,074.7 115,104.0 137,245.8 174,598.8 203,607.9 225,523.2 247,362.0 307,769.0 383,565.3 Private Final Consumption Expenditure 374,882.4 544,140.3 639,963.8 748,560.3 900,516.9 1,042,264.6 1,219,365.9 1,441,581.1 1,848,070.0 2,360,896.0 3,134,993.8 Gross Capital Formation (Investment) 164,525.7 275,811.3 293,930.7 400,841.2 508,975.9 585,665.0 704,596.0 751,626.2 948,866.0 1,037,685.0 1,216,584.9 Exports of Goods and Services 85,950.4 102,886.6 108,227.1 123,496.0 121,532.2 122,500.8 139,830.1 184,282.1 213,437.0 239,229.0 329,634.5 Imports of Goods and Services 162,487.1 236,383.9 251,300.6 308,691.3 393,188.5 424,749.9 430,233.2 502,112.9 561,512.0 571,230.0 723,391.3 Resource Balance (76,536.7) (133,497.3) (143,073.5) (185,195.3) (271,656.3) (302,249.2) (290,403.1) (317,830.8) (348,075.0) (332,001.0) (393,756.8) Gross Domestic Savings 91,351.3 149,991.7 158,606.3 224,967.5 294,221.0 351,234.0 409,579.8 535,268.5 600,791.0 705684 822,828.0 Gross National Savings 164,492.3 235,181.8 250,018.7 328,410.1 417,346.8 502,075.8 553,655.1 709,446.7 828,078.0 905,444.0 1,101,329.6 Mid-year Population (In Million) 80.7 82.7 84.8 87.0 89.1 91.2 93.4 95.5 97.6 99.7 101.9 Per Capita Nominal GDP (In Birr) 6,551.5 9,268.6 10,486.5 12,520.2 14,953.4 17,192.4 19,630.4 23,061.5 27,625.0 33,845.0 42,598.7 Per Capita Real GDP (In Birr) 12,356.3 13,090.3 14,118.3 15,189.1 16,366.5 17,192.4 18,393.9 19,204.9 20,312.5 21,153.1 21,862.5 Average Exchange Rate (Birr/USD) 16.1 17.3 18.3 19.1 20.1 21.1 22.4 26.1 28.1 31.3 39.0 Real GDP (In USD) 61,852.2 62,777.3 65,528.4 69,237.3 72,546.1 74,296.6 76,610.6 70,249.0 70,666.9 67,287.5 57,106.5 Nominal GDP (In USD)(Million) 32,794.8 44,449.6 48,671.9 57,071.7 66,282.4 74,296.6 81,760.4 84,356.0 96,107.0 107,660.0 111,271.2 Per Capita Nominal GDP (In USD) 406.5 537.2 573.7 656.4 744.1 814.6 875.8 883.3 985.0 1,080.0 1,091.8 Per Capita Real GDP (In USD) 766.6 758.7 772.4 796.3 814.4 814.6 820.7 735.6 724.3 675.0 560.3 GDP Deflator 0.53 0.71 0.74 0.82 0.91 1.00 1.07 1.20 1.36 1.60 1.95 Source: Planning commission Description / Year 4

National Bank of Ethiopia Annual Report 2020/21 203 Table 5: Growth Rates of Aggregate Output, Consumption, Investment and Savings (Inpercent) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2011 /12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 GDP at Current Basic Prices 45.2 15.3 22.4 22.4 18.2 17.6 21.2 23.3 25.4 29.4 Taxes on Products, net 44.3 24.1 21.9 22.1 12.9 8.5 6.9 10.9 25.4 16.0 GDP at Current Market Prices 45.1 16.0 22.4 22.4 17.7 16.9 20.2 22.5 25.4 28.6 Incomes from ROW, net (48.2) (17.0) (50.0) (81.0) (2.9) (112.5) (31.8) (33.0) (10.5) 13.2 Gross National Income at Current Basic Price 45.2 15.3 22.3 22.2 18.3 17.2 21.1 23.3 25.5 29.5 Gross National Income at Current Market Price 45.1 16.0 22.3 22.2 17.8 16.6 20.1 22.5 25.5 28.7 Current Transfers from ROW, net 17.0 7.5 13.9 20.7 21.5 (0.6) 21.7 25.7 (3.6) 42.7 Gross National Disposable Income 41.6 15.1 21.5 22.1 18.1 15.0 20.2 22.8 23.2 29.6 Government Final Consumption Expenditure 16.7 25.1 26.4 19.2 27.2 16.6 10.8 9.7 24.4 24.5 Private Final Consumption Expenditure 45.1 17.6 17.0 20.3 15.7 17.0 18.2 27.9 27.7 32.6 Gross Capital Formation (Investment) 67.6 6.6 36.4 27.0 15.1 20.3 6.7 26.2 9.4 17.9 Exports of Goods and Services 19.7 5.2 14.1 (1.6) 0.8 14.1 31.8 15.9 12.0 37.0 Imports of Goods and Services 45.5 6.3 22.8 27.4 8.0 1.3 16.7 11.8 1.7 27.0 Resource Balance (74.4) (7.2) (29.4) (46.7) (11.3) 3.9 (9.4) (9.5) 4.6 19.6 Gross Domestic Savings 64.2 5.7 41.8 30.8 19.4 16.6 30.7 12.2 17.5 17.1 Gross National Savings 43.0 6.3 31.4 27.1 20.3 10.3 28.1 16.4 12.5 23.2 Mid-year Population (in Million) 2.6 2.5 2.5 2.4 2.3 2.2 Per Capita GDP (Birr) (Nominal) 41.5 13.1 19.4 19.4 15.0 14.2 17.5 19.8 22.5 25.8 Per Capita GDP (Birr) (Real) 5.9 7.9 7.6 7.8 5.0 7.0 4.4 5.8 4.1 3.3 Average Exchange Rate (Birr/USD) 7.0 5.9 4.4 5.4 5.0 6.2 16.5 7.6 11.5 24.5 Real GDP (USD) 1.5 4.4 5.7 4.8 2.4 3.1 (8.3) 0.6 (4.8) (15.1) GDP at Current Market Prices(USD) 35.5 9.5 17.3 16.1 12.1 10.0 3.2 13.7 12.2 3.3 Per Capita GDP (USD) (Nominal) 32.2 6.8 14.4 13.4 9.5 7.5 0.9 11.5 9.6 1.1 Per Capita GDP (USD) (Real) (1.0) 1.8 3.1 2.3 0.0 0.7 (10.4) (1.5) (6.8) (17.0) Percentage Change in GDP Deflator 33.5 4.9 11.0 10.8 9.5 6.7 12.5 13.3 17.6 21.8 Source: Planning commission Description / Year

National Bank of Ethiopia Annual Report 2020/21 204Table 6: Summary of External Public Debt ,2015/16 ,2016/17 ,2017/18 ,2018/19 ,2019/20 ,2020/21 (2008) (2009) (2010) (2011) (2012) (2013) EXTERNAL DEBT Disbursed * 449,037.6 539,568.8 703,692.2 782,938.1 1,010,797.0 1,290,519.1 Undisbursed n.a DRAWINGS (gross) 73,812.2 66,379.3 92,796.0 79,206.1 106,682.1 55,046.6 REPAYMENTS (1) -16,306.7 -19,479.7 -30,619.4 -40,207.1 -44,604.7 -54,356.4 DEBT SERVICING (2) 23,872.4 29,345.3 42,480.4 58,195.8 64,035.1 73,138.2 Principal 16,306.7 19,479.7 30,619.4 40,207.1 44,604.7 54,356.4 Interest (3) 7,565.7 9,865.6 11,861.0 17,988.7 19,430.4 18,781.9 DEBT SERVICE TO EXPORT OF GOODS RATIO 39.4 45.0 57.4 77.8 68.4 52.1 EXTERNAL DEBT TO TO GDP (%)** 28.6 29.4 32.0 29.1 30.0 29.7 EXPORT OF GOODS 60,526.4 65,167.1 74,044.8 74,807.7 93,641.5 140,327.0 GDP (Current Basic Price) 1,568,097.5 1,832,786.0 2,200,120.6 2,690,751.4 3,374,746.9 4,341,387.1 Source: Ministry of Finance and Economic Development *Excludes State defence Credits and Ruble denominated debt. (1)-on cash basis; includes repayments of Trust Fund Loans , and repurchases from IMF. (2)-on accrual basis; includes repayments of Trust Fund Loans, and repurchases from IMF. (3) - Includes IMF charges and interest. **Revised based on rebased GDP series NB: USD to birr coversion is made by using annual average exchange rate. (In Millions of Birr)

National Bank of Ethiopia Annual Report 2020/21 205 G.C. ,2013/14 ,2014/15 ,2015/16 ,2016/17 ,2017/18 ,2018/19 ,2019/20 ,2020/21 EFY (2006) (2007) (2008) (2009) (2010) (2011) (2012) (2013) TRADE BALANCE -198,611.2 -270,301.4 -292,474.9 -289,030.5 -324,244.9 -349,148.8 -341,436.0 -417,133.3 Export(f.o.b) 62,947.9 60,443.8 60,526.4 65,167.1 74,044.8 74,807.7 93,641.5 140,327.0 Coffee 13,626.8 15,683.9 15,253.7 19,795.6 21,905.1 21,436.5 26,824.8 35,480.3 Other Exports 49,321.1 44,759.9 45,272.7 45,371.5 52,139.7 53,371.2 66,816.7 104,846.7 Imports (c.i.f.) -261,559.1 -330,745.2 -353,001.4 -354,197.6 -398,289.7 -423,956.5 -435,077.5 -557,460.3 Fuel -49,081.4 -41,013.5 -28,260.8 -40,876.9 -60,553.0 -72,961.5 -65,445.6 -75,723.6 Other Imports -212,477.7 -289,731.7 -324,740.5 -313,320.8 -337,736.7 -350,995.0 -369,632.0 -481,736.7 Net Services 12,715.4 -6,943.6 -13,027.4 -12,588.8 -5,221.1 -15,833.5 -6,862.8 1,156.9 Travel 5,602.3 1,681.7 -1,386.5 -951.7 7,146.7 6,225.9 10,431.2 26,800.9 Other Transportation 13,658.8 8,242.8 11,209.2 8,569.4 13,494.3 18,091.2 27,972.4 28,743.3 Government(n.i.e.) 5,551.5 3,661.7 7,600.2 8,625.2 5,641.9 7,935.0 1,878.4 6,314.9 Investment Income -2,914.6 -5,358.0 -7,849.3 -11,214.0 -11,410.1 -16,925.9 -19,203.0 -21,739.9 Other Services -9,182.6 -15,171.9 -22,601.0 -17,617.7 -20,094.0 -31,159.7 -27,942.0 -38,962.3 Net Goods & Services -185,895.8 -277,245.0 -305,502.3 -301,619.3 -329,466.0 -364,982.3 -348,298.9 -415,976.4 Private Transfers (net) 78,477.7 98,099.1 135,680.5 122,945.6 158,601.1 167,629.9 162,534.4 238,718.0 Current Account Balance -107,418.1 -179,145.9 -169,821.8 -178,673.7 -170,864.9 -197,352.4 -185,764.5 -177,258.4 Public Transfers (net) 27,911.7 30,301.9 29,359.9 32,014.6 32,678.7 58,540.8 47,797.8 53,408.6 Non Monetary Capital (net) 78,866.1 157,085.6 138,330.8 154,325.0 161,503.2 135,289.6 135,603.6 148,987.8 Public long-term (net)* 50,373.7 112,141.5 67,020.2 57,928.2 68,083.1 46,595.6 64,463.4 7,743.3 Short-term 510.3 690.1 2,322.0 2,913.8 -3,792.1 4,099.0 -4,682.9 -13,081.3 FDI 27,982.1 44,254.0 68,988.6 93,483.1 97,212.3 84,595.0 75,823.2 154,325.8 Net errors and Omissions -1,207.8 -18,719.8 -15,405.0 7,096.2 -28,580.3 -22,895.0 -23,758.0 -13,483.4 Overall Balance -1,848.1 -10,478.1 -17,536.1 14,762.1 -5,263.3 -26,417.1 -26,121.1 11,654.6 Financing : 1,848.1 10,478.1 17,536.1 -14,762.1 5,263.3 26,417.1 26,121.1 -11,654.6 Monetary Authorities (Reseves), net 1,914.0 10,478.1 17,536.1 -14,762.1 5,263.3 26,417.1 26,121.1 -11,654.6 Arrears Change 0.0 Debt Relief -65.8 0.0 Cancellation -65.8 0.0 Rescheduling 0.0 Sorce: NBE Staff Compilation *Includes other public sector long-term loan and private loan NB: USD to birr coversion is made by using annual average exchange rate. (In Millions of Birr) Table 7: Balance of Payments

National Bank of Ethiopia Annual Report 2020/21 206Table 8: Value of Major Exports (In Thousands of Birr) 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (2008) (2009) (2010) (2011) (2012) (2013) Coffee 15,267,166.7 19,897,558.9 21,893,480.4 21,490,708.9 27,043,809.8 34,661,479.2 Oilseeds 10,076,702.8 7,891,362.5 11,188,854.0 10,921,323.8 11,016,053.3 12,447,184.5 Leather and Leather Products 2,424,089.0 2,558,995.8 3,455,808.7 3,285,473.7 2,224,782.4 1,321,048.4 Pulses 4,886,962.9 6,276,562.9 7,124,264.4 7,659,551.2 7,407,897.8 8,810,339.8 Meat Products 2,026,532.5 2,214,721.7 2,661,968.0 2,484,948.7 2,131,090.9 2,766,305.2 Fruits & Vegetables 1,128,060.7 1,257,748.5 1,603,497.1 1,709,468.5 2,526,266.2 2,554,855.5 Sugar - 115,431.7 133,582.5 106,710.5 47,105.5 7,807.8 Gold 6,113,142.1 4,683,990.8 2,605,757.2 775,705.7 6,572,639.3 23,960,756.7 Oil Cakes - - - - - - Live Animals 3,090,572.3 1,506,508.9 1,539,071.6 1,287,954.6 1,671,089.2 1,618,980.7 Chat 5,511,986.7 6,113,689.6 6,882,238.3 8,511,121.5 8,498,636.8 14,515,995.0 Petroleum Products - - - - - - Bee's Wax 51,326.1 60,566.7 81,311.4 67,657.8 65,655.6 65,370.4 Tantalem 151,563.5 137,861.4 246,007.6 274,291.8 155,501.4 160,642.4 Cotton 11.6 - 140,351.4 8,572.2 8,218.7 - Text. & Text. Prdts 1,633,981.4 2,004,285.7 2,695,228.8 4,296,263.5 5,315,818.7 5,297,133.7 Cereals and Flour 185,207.8 645,101.2 156,779.6 81,940.5 138,438.3 707,424.0 Natural Gum 175,997.8 266,180.1 233,800.6 144,922.8 157,860.5 119,822.9 Civet - - - - - - Hop - - - - - - Animal Fodder - - - - - - Natural Honey 41,928.3 31,343.9 23,694.8 13,468.4 16,438.1 2,867.5 Marble - - - - - - Flower 4,737,809.0 4,905,507.6 5,982,071.2 7,228,221.9 13,780,893.8 17,130,702.7 Beverage 109,780.9 90,513.2 108,799.4 114,745.8 112,973.8 180,564.1 Spices 566,214.9 554,729.1 441,282.3 381,907.9 506,971.9 578,556.0 Others 1,759,529.8 2,473,083.9 2,919,189.8 2,529,996.2 2,685,166.8 1,960,770.5 Others 9,362,025.1 11,108,606.1 12,947,205.4 15,074,331.0 22,878,281.8 26,138,483.9 RE-exports - - - Total 59,938,566.96 63,685,744.10 72,117,038.93 73,374,955.85 92,083,308.60 128,868,607.09 Commodity

National Bank of Ethiopia Annual Report 2020/21 207 Table 9: Quantity of Major Exports (In Metric Tons) 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (2004) (2005) (2006) (2007) (2007) (2009) (2010) (2011) (2012) (2013) Coffee 169,408.06 199,127.77 189,669.31 183,870.70 198,658.11 225,747.01 238,572.83 230,931.42 271,111.52 248,653.58 Oilseeds 367,436.15 283,853.59 313,526.60 319,461.91 436,573.50 333,514.13 348,548.01 260,001.58 236,504.53 245,479.33 Leather and Leather products 4,435.66 4,614.91 5,573.06 6,174.96 5,983.46 5,890.12 6,400.79 5,590.40 3,551.27 2,290.59 Pulses 226,157.63 357,518.78 353,022.19 340,736.88 375,425.13 392,743.28 438,061.53 462,821.56 354,010.48 280,603.44 Meat Products 17,665.96 15,466.31 14,971.98 19,034.52 18,965.08 19,564.98 19,954.85 17,719.23 12,819.96 14,631.78 Fruits & Vegetables 123,538.30 135,184.35 145,436.23 150,148.72 167,076.37 178,569.19 188,976.92 175,619.64 191,183.11 221,695.57 Sugar 11.18 0.02 - - - 51,126.64 35,958.09 43,706.24 17,515.03 2,511.84 Gold 12.19 12.31 11.64 9.04 8.58 5.97 2.82 0.82 3.32 9.56 Oil Cakes - - - - - - - - - Live Animals 144,885.27 100,888.37 105,827.48 77,860.31 77,779.01 36,066.48 31,936.99 24,346.65 29,395.64 26,262.97 Chat 41,052.87 47,163.67 51,689.76 49,204.18 47,000.13 48,818.10 47,023.94 53,565.91 57,136.13 71,209.90 Petroleum Products - - - - - - - - - Bee's Wax 367.09 411.93 334.70 520.38 267.65 302.34 358.70 283.18 258.01 229.00 Tantalem 294.58 75.72 87.91 147.79 185.90 229.30 2,860.36 386.20 76.08 66.77 Cotton 126.93 5,673.61 751.98 8.29 0.34 - 3,529.38 252.91 80.00 - Text. & Text. Prdts 10,799.76 15,935.97 18,638.34 14,858.30 12,281.54 16,192.82 16,761.81 19,888.80 22,798.39 24,045.62 Cereals and Flour 12,265.32 6,819.15 19,968.19 39,171.91 11,403.59 71,737.19 11,805.28 3,579.95 4,670.14 25,144.37 Natural Gum 3,503.66 3,268.07 3,402.88 3,472.77 2,351.01 3,383.90 2,482.77 1,111.41 1,384.59 769.68 Civet - - - - - - - - - - Hop - - - - - - - - - - Animal Fodder 48.93 40.01 - - - - - - - - Natural Honey 876.66 839.54 742.35 681.18 592.53 444.10 316.30 134.43 152.14 15.61 Marble - - - - - - - - - - Flower 46,797.66 42,438.23 44,720.52 46,330.67 50,629.10 49,356.08 50,100.88 57,849.31 94,389.84 101,578.88 Beverage 3,829.13 3,971.20 2,201.69 2,990.00 4,213.56 3,943.14 3,566.97 4,404.93 4,430.26 5,310.98 Spices 17,207.29 24,239.60 21,261.15 19,146.48 13,374.79 12,427.56 12,576.85 11,589.88 12,499.67 12,823.23 Source: Ethiopian Customs Commission Commodity

National Bank of Ethiopia Annual Report 2020/21 208Table 10: Value of Major Imports (Thousands of Birr) Period Food & Live Animals Beverages Tobacco Petroleum Crude Petroleum Prod.**** Chemicals Fertilizers Medical & Pharm. Prod Soap & Polish Rubber Prod. Paper & Paper Manfc. 2010/11 3,966,149 167,354 230,682 0 22,299,884 1,118,884 5,665,269 5,054,381 685,949 2,515,039 1,137,791 2011/12 12,692,391 206,514 270,210 0 35,868,583 1,357,151 10,503,430 6,488,435 1,128,549 3,373,729 1,843,948 2012/13 11,635,650 261,691 193,101 0 26,565,255 2,092,402 5,332,244 7,169,253 907,442 4,030,338 2,064,095 2013/14 9,165,826 533,829 91,441 18 47,619,870 3,647,031 7,808,484 2,389,297 2,186,493 5,858,244 1,992,580 2014/15 13,155,398 570,045 94,776 200 39,822,539 3,751,995 8,641,772 2,568,987 2,186,737 5,979,668 2,062,833 2015/16 24,592,888 746,323 153,595 109 27,005,493 3,616,705 10,491,320 2,531,734 2,694,456 6,350,622 2,525,557 2016/17 14,830,981 699,400 122,286 3,729 39,143,280 3,323,962 12,279,084 2,091,492 3,090,001 6,708,574 2,457,186 2017/18 22,346,613 843,503 107,047 1,795 58,613,987 4,277,092 12,361,827 1,495,997 3,299,739 6,438,707 2,180,534 2018/19 19,283,197 547,466 107,233 885 69,942,603 5,355,212 17,709,856 2,431,705 3,923,383 7,698,856 2,964,510 Period Textiles Clothings Glass & Glass Ware Metal & Metal Manfc. Machinery & Aircraft Road Motor Vehicles Electrical Materials Grain* Telecomm. Appara. Others GRAND TOTAL 2010/11 1,982,717 2,430,231 334,932 10,778,367 16,015,252 13,180,603 7,195,551 2,739,632 73,258 34,861,069 129,693,362 2011/12 2,892,344 4,218,310 522,024 19,678,247 20,529,023 17,831,730 8,696,845 10,436,910 80,038 43,405,637 191,587,139 2012/13 2,744,224 4,449,522 722,828 21,688,480 28,035,377 20,493,273 11,912,689 9,865,215 96,583 46,476,571 196,871,016 '2013/14 4,622,749 5,442,436 1,942,407 29,939,445 36,774,861 23,820,186 22,735,293 5,603,599 349,551 54,917,318 261,837,358 2014/15 5,819,130 6,802,500 2,477,281 45,631,138 45,707,264 31,471,855 43,251,536 2,971,791 1,489,172 69,309,407 330,794,233 2015/16 5,669,241 7,990,759 2,731,966 46,750,241 58,130,972 33,759,296 37,416,225 3,617,393 1,212,163 78,644,190 353,013,856 2016/17 5,416,692 8,529,700 3,376,822 41,572,482 56,981,595 33,498,960 30,086,052 3,847,407 7,730,645 82,328,213 354,271,135 2017/18 5,039,340 9,639,953 3,159,828 37,072,741 65,746,027 27,957,776 28,222,631 5,975,107 428,242 107,882,087 397,115,468 2018/19 6,145,566 6,571,190 2,989,311 40,675,845 59,368,139 22,151,317 27,929,885 4,653,401 1,364,754 126,233,238 423,394,151 2019/20 9,389,053 5,910,193 3,276,373 51,308,076 69,932,130 9,497,824 25,002,128 4,674,500 610,593 119,663,926 432,189,352 2020/21 10,385,932 7,877,484 3,026,514 53,117,272 78,005,719 4,859,279 32,953,170 19,960,579 809,586 164,455,699 559,341,145 Table 10 continued:

Included in "Food & Live Animals". Source: Ethiopian Customs Commission

National Bank of Ethiopia Annual Report 2020/21 209 Period Food & Live Animals Beverages Tobacco Petroleum Crude Petroleum Prod. Chemicals Fertilizers Medical & Pharm. Prod Soap & Polish Rubber Prod. 2010/11 547,512.7 2,308.8 2,228.5 - 1,795,018.8 56,496.0 622,239.2 15,022.9 34,381.8 37,465.4 2011/12 1,818,239.2 3,380.2 2,114.6 - 2,160,455.6 65,088.8 907,129.9 15,442.9 52,956.6 38,732.2 2012/13 1,105,099.7 13,902.5 7,115.5 7,384.2 1,506,402.8 92,926.1 402,556.6 23,612.5 162,562.4 32,775.3 2013/14 1,098,316.9 15,727.9 1,258.8 0.3 2,623,450.8 183,439.5 11,765.6 924.0 43,511.0 84,386.5 2014/15 1,556,755.8 19,058.0 1,148.3 7.4 2,822,058.9 182,043.5 13,804.2 950.6 51,552.3 87,619.2 2015/16 3,162,932.8 22,234.2 1,719.1 1.3 3,043,561.0 185,477.7 14,155.6 1,280.9 66,325.2 242,399.6 2016/17 1,863,068.2 25,010.1 1,440.2 2.6 3,445,456.0 174,373.4 23,800.8 842.3 62,997.9 106,916.3 2017/18 2,217,510.2 26,551.5 1,202.6 50.9 3,770,588.9 183,265.1 15,421.0 1,105.1 84,336.7 124,577.2 2018/19 1,822,744.5 16,807.4 1,164.8 30.0 3,820,223.0 199,647.8 33,959.8 1,150.6 114,565.9 97,938.9 2019/20 2,773,553.3 16,825.8 1,010.0 53.9 3,867,196.1 718,932.3 24,071.8 31,766.5 85,684.7 111,569.5 2020/21 4,153,337.6 16,308.9 1,303.0 147.0 3,719,623.1 176,366.0 22,352.1 808.8 83,410.9 92,909.1 Table 11 Continued: Period Paper & Paper Manfc. Textiles Clothings Glass & Glass Ware Metal & Metal Manfc. Machinery & Aircraft Road Motor Vehicles Electrical Materials Grain* Telecomm. Appara. 2010/11 57,452.1 38,370.2 31,669.4 25,489.8 772,360.7 231,077.7 133,737.9 64,156.8 438,137.4 1,134.6 2011/12 89,205.8 46,129.4 37,796.9 45,244.9 904,607.4 151,778.3 241,940.5 76,974.4 1,679,919.7 917.4 2012/13 94,055.2 41,858.8 36,103.1 56,403.7 992,746.4 207,980.6 177,514.2 89,945.7 1,252,139.3 1,102.4 2013/14 113,120.3 66,313.0 41,513.8 188,603.6 1,392,828.4 367,372.0 186,099.4 173,869.1 735,463.4 533.9 2014/15 96,423.9 81,769.5 110,349.1 215,500.2 1,646,691.0 288,534.3 211,528.3 230,648.1 258,852.9 503.6 2015/16 120,939.2 535,911.0 511,001.1 1,450,218.2 11,290,987.4 2,226,215.5 1,435,282.4 1,341,928.8 3,281,134.3 3,618.7 2016/17 122,068.3 105,571.3 51,937.5 332,152.8 1,817,012.2 331,153.8 351,494.6 127,280.9 341,047.4 280.1 2017/18 89,634.4 88,081.1 50,756.5 232,072.1 1,381,381.2 255,910.3 204,680.5 119,953.9 640,192.1 264.5 2018/19 105,345.9 140,618.8 45,285.6 194,706.0 1,695,672.5 234,828.2 159,140.1 131,509.1 538,413.5 280.4 2019/20 138,210.5 120,255.0 27,295.3 161,693.5 1,743,124.7 223,926.9 83,162.6 122,689.1 738,036.9 430.6 2020/21 153,513.0 127,478.8 26,875.7 99,087.8 1,402,145.2 183,969.3 28,862.0 94,220.0 2,012,278.3 232.3 Table 11: Volume of Major Imports

Included in "Food & Live Animals". Source: Ethiopian Customs Commission (in Metric Tones)

National Bank of Ethiopia Annual Report 2020/21 210Table 12: Value of Imports, by End Use In Millions of Birr 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (2007) (2008) (2009) (2010) (2011) (`2012) (2013) RAW MATERIALS 3,426.40 3,147.26 2,809.23 3,617.87 4,233.32 5,070.88 5,400.91 SEMI-FINISHED GOODS 51,856.36 61,207.76 58,840.49 65,669.07 78,116.49 97,796.04 105,406.69 Chemicals 6,398.19 7,389.96 7,524.19 8,910.53 10,858.90 16,743.30 18,890.76 Fertilizers 10,163.58 9,167.59 8,354.88 13,001.60 14,219.85 19,517.00 28,031.17 Textile Materials 1,311.24 1,335.60 1,580.89 1,589.57 2,276.95 3,485.51 5,359.73 Others 33,983.34 43,314.60 41,380.52 42,167.37 50,760.78 58,050.24 53,125.03 FUEL 40,943.09 28,246.34 40,940.19 61,013.95 72,941.90 64,685.48 76,625.78 Crude Petroleum 0.20 0.11 3.73 1.80 0.88 1.96 10.32 Petroleum Products 39,822.54 27,005.49 39,143.28 58,613.99 69,942.60 62,056.89 72,597.46 Others 1,120.35 1,240.74 1,793.18 2,398.17 2,998.41 2,626.62 4,017.99 CAPITAL GOODS 138,421.22 143,943.46 135,285.20 136,684.08 140,570.41 128,229.80 151,669.63 Transport 34,176.24 32,362.86 32,005.58 29,339.13 39,817.70 12,249.42 13,690.16 Tyres for Heavy Vehicle 2,741.61 2,818.81 3,186.58 2,628.97 3,172.73 4,191.33 4,299.83 Heavy Road Motor Vehicle 19,986.57 20,520.03 22,400.17 18,666.44 11,441.56 5,652.14 2,954.13 Aircraft 3,826.27 3,462.96 3,362.78 7,529.52 24,229.19 2,033.72 5,328.32 Others 7,621.78 5,561.06 3,056.05 514.20 974.22 372.22 1,107.88 Agricultural 1,444.71 1,761.37 1,691.39 1,343.02 1,616.02 2,745.65 3,422.46 Industrial 102,800.27 109,819.23 101,588.23 106,001.93 99,136.69 113,234.74 134,557.01 CONSUMER GOODS 90,614.30 111,228.72 109,625.01 122,572.11 119,758.04 124,714.69 213,380.89 Consumer Durables 32,305.54 33,062.24 38,146.76 35,022.62 33,670.41 28,525.81 31,313.80 Radio & Television 3,008.95 3,069.50 9,556.66 2,836.57 3,417.15 1,947.48 2,061.47 Tyres, Cars & Other Veh. 1,258.24 1,211.53 1,435.07 1,624.56 1,511.83 1,596.76 1,477.42 Cars & Other Vehicles 7,305.98 9,342.33 9,917.73 12,001.85 9,999.35 3,455.56 812.32 Others 20,732.38 19,438.89 17,237.31 18,559.64 18,742.09 21,526.01 26,962.59 Consumer Non- Durables 58,308.75 78,166.48 71,478.24 87,549.49 86,087.63 96,188.88 182,067.09 Cereals 12,065.34 21,856.74 12,363.68 20,043.62 16,734.20 26,055.01 53,253.48 Other Food 8,988.00 13,252.27 13,007.05 16,254.14 15,642.11 16,738.49 32,012.30 Medical & Pharmaceutical 11,823.44 13,636.15 15,028.19 14,814.52 21,133.74 21,356.68 26,642.51 Textile Fabrics 11,523.90 13,056.13 12,979.33 14,797.76 11,089.57 12,300.45 18,599.28 Others 13,908.07 16,365.19 18,099.98 21,639.45 21,488.01 19,738.25 51,559.52 MISCELLANEOUS 5,532.88 5,240.32 6,771.02 7,558.39 7,773.99 11,692.47 6,857.24 TOTAL IMPORTS 330,794.23 353,013.86 354,271.13 397,115.5 423,394.15 432,189.35 559,341.15 Sources: Ministry of Revenue Components

National Bank of Ethiopia Annual Report 2020/21 211 Table 13: Value of Imports, by Country of Origin: In Thousands of Birr 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2008 2009 2010 2011 2012 2013 Djibouti 25.5 54.6 7,505.5 269,451.0 1,226,326.3 5,657,336.4 Kenya 704,623.9 775,026.6 883,937.3 1,139,053.5 2,682,248.7 2,237,418.7 Sudan 885,021.3 2,697,548.6 2,500,770.0 2,303,862.7 2,295,903.2 1,107,245.5 U.A.E 9,676,619.7 8,283,685.2 14,283,917.6 15,436,918.6 17,282,832.8 36,910,293.4 France 4,176,288.1 4,505,121.3 4,756,805.0 4,355,547.8 8,257,770.3 7,481,685.2 Germany 7,849,773.2 5,711,671.2 7,256,006.1 9,018,930.8 9,208,171.1 8,345,258.5 Italy 13,340,823.0 15,518,259.6 13,370,601.9 9,585,488.8 8,191,163.0 13,317,722.6 Netherlands 4,140,318.9 4,540,832.5 6,172,113.2 5,203,113.3 4,678,959.5 3,780,241.5 U.K. 4,277,114.5 3,750,299.2 5,981,832.7 9,114,791.7 9,216,314.9 11,152,568.7 Russia 3,983,984.5 947,736.5 2,472,934.4 3,422,604.1 2,116,402.5 4,712,302.7 Yugoslavia 0.0 0.3 0.0 U.S.A. 26,691,945.0 22,894,078.3 31,244,388.2 38,161,945.4 33,114,719.7 38,100,962.8 China, P. Rep. 117,251,124.0 114,932,245.7 100,864,789.1 109,790,427.2 112,353,466.1 126,418,108.2 Japan 14,792,746.8 15,545,024.5 13,546,649.0 10,523,030.1 5,490,339.1 4,139,127.9 Saudi Arabia 7,964,804.7 10,728,630.6 9,089,126.5 6,854,464.4 14,250,180.6 19,549,678.9 Rest of the World 137,278,642.6 143,440,920.4 184,684,091.2 198,214,521.2 201,824,554.2 276,431,194.0 Total Import 353,013,855.7 354,271,134.9 397,115,467.6 423,394,150.7 432,189,352.0 559,341,145.1 Sources: Ethiopian Ministry of Revenue countries

National Bank of Ethiopia Annual Report 2020/21 212 Table 14: Values of Export by Countries of Destination* (In Thousand of Birr) 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (2003) (2004) (2005) (2006) (2007) (2008) (2009) (2010) (2011) (2012) (2013) Djibouti 1,002,921 1,459,098 2,237,359 3,657,884 1,594,047 2,205,921 2,283,065 3,312,768 3,572,337 3,702,736 4,497,508.4 Kenya 127,738 176,617 190,938 383,110 586,440 618,827 1,186,102 1,057,669 566,102 439,609 1,616,543.8 Sudan 2,275,081 3,012,327 1,675,097 1,550,096 1,649,715 1,333,608 983,314 2,690,710 1,945,939 2,168,104 3,168,442.1 U.A.R 1,210,935 1,327,262 1,434,080 1,505,223 1,968,395 1,663,203 2,694,756 2,890,041 3,660,308 3,936,157 7,145,156.7 France 757,780 932,783 602,490 685,633 721,353 679,966 827,505 815,455 556,438 890,053 2,181,537.6 Germany 5,154,884 5,321,133 4,200,734 3,578,888 4,206,156 3,374,501 3,943,247 4,729,676 3,117,964 5,026,821 5,745,974.7 Italy 1,707,725 1,390,960 1,185,007 1,193,640 1,089,195 966,201 1,347,709 1,485,536 1,195,539 1,401,025 2,839,821.4 Netherlands 2,668,056 3,722,699 3,029,773 3,733,608 3,590,928 3,705,136 4,177,990 5,001,314 5,843,402 9,670,553 10,695,072.7 U.K. 921,147 980,160 859,631 1,034,641 701,778 807,237 1,290,346 1,158,598 1,158,806 1,052,198 2,357,712.9 Russia 125,733 212,833 215,319 382,323 305,929 332,653 386,109 471,865 344,778 369,995 1,891,810.4 Yugoslavia - - 0 45,940 U.S.A. 1,941,403 1,533,048 2,055,430 2,528,811 3,516,787 3,284,623 4,317,231 6,649,832 5,358,010 6,784,201 8,495,485.6 China, P.Rep. 4,024,701 5,669,068 4,660,202 7,588,195 7,378,001 6,430,788 5,111,010 6,301,807 4,035,157 2,635,421 3,731,565.0 Japan 628,239 796,091 1,617,076 1,304,904 1,965,575 1,212,783 2,233,317 2,377,677 3,385,579 3,566,011 3,495,238.4 Saudi Arabia 2,227,262 3,551,459 2,754,806 3,516,771 4,039,152 3,642,647 4,400,225 4,971,483 5,072,646 6,484,675 7,463,486.1 Rest of the World 19,751,961 24,409,230 29,405,617 29,599,272 26,546,929 29,421,718 28,503,818 28,798,566 33,761,221 46,112,922 63,543,251.2 Total Export 44,525,565 54,494,767 56,123,558 62,242,999 59,860,381 59,725,753 63,685,744 72,712,995 73,574,227 94,240,481 128,868,607.1

Export value of Gold is not included in this table for the years before 2003/04 Sources: Ethiopian Customs Authority countries

National Bank of Ethiopia Annual Report 2020/21 213 Table 15: Trade Balance with Major Trading Partners ( In Thousands of Birr) 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (2008) (2009) (2010) (2011) (2012) (2013) Djibouti 4,016.00 - 4,018.00 - 4,020.00 - 4,022.00 - 4,024.00 - 4,026.00 - Kenya 2,205,895.91 2,283,009.94 3,305,262.37 3,302,886.37 2,476,410.09 1,159,828.00 - Sudan 85,796.43 - 411,075.40 173,731.42 572,951.51 - 2,242,639.74 - 620,874.88 - U.A.E 448,586.45 1,714,234.10 - 189,939.59 357,923.38 - 127,799.00 - 2,061,196.66 France 8,013,416.29 - 5,588,929.30 - 11,393,876.20 - 11,776,610.13 - 13,346,675.45 - 29,765,136.69 - Germany 3,496,322.40 - 3,677,616.68 - 3,941,350.04 - 3,799,109.79 - 7,367,717.62 - 5,300,147.55 - Italy 4,475,272.13 - 1,768,424.37 - 2,526,330.43 - 5,900,966.85 - 4,181,349.91 - 2,599,283.75 - Netherlands 12,374,622.20 - 14,170,550.33 - 11,885,066.35 - 8,389,949.56 - 6,790,138.34 - 10,477,901.21 - U.K. 435,183.35 - 362,842.14 - 1,170,799.45 - 640,289.00 4,991,593.40 6,914,831.20 Russia 3,469,877.49 - 2,459,953.18 - 4,823,234.75 - 7,955,985.63 - 8,164,116.46 - 8,794,855.85 - Yugoslavia 3,651,331.50 - 561,627.87 - 2,001,069.82 - 3,077,825.86 - 1,746,407.72 - 2,820,492.31 - U.S.A. 45,939.89 0.26 - 0.00 - - - - China, P.Rep. 23,407,322.41 - 18,576,846.83 - 25,190,511.74 - 32,853,753.41 - 28,083,399.33 - 29,605,477.20 - Japan 110,607,521.54 - 109,821,235.92 - 94,562,982.35 - 105,805,088.06 - 109,852,809.46 - 122,686,543.20 - Saudi Arabia 13,579,963.40 - 13,311,707.06 - 11,168,972.25 - 7,187,269.43 - 2,059,092.16 - 643,889.53 - Rest of the World 4,322,157.13 - 6,328,405.58 - 4,117,643.49 - 1,831,636.29 - 7,900,269.49 - 12,086,192.84 - OverallTrade Balance 107,856,924.66 - 114,937,102.51 - 155,885,525.19 - 164,453,300.28 - 155,711,632.28 - 212,887,942.84 - Source: Ethiopian Customs Commission Trading Country

National Bank of Ethiopia Annual Report 2020/21 214 Currency outside Banks Net Demand Deposit Money Supply Quasi Money Broad Money 1 2 3=1+2 4 5=3+4 1999/00 5,914.3 7,136.0 13,050.3 9,127.5 22,177.8 2000/01 5,911.8 7,834.0 13,745.8 10,770.4 24,516.2 2001/02 5,461.9 8,690.6 14,152.5 12,139.5 26,292.1 2002/03 6,582.0 8,834.8 15,416.8 13,643.4 29,060.2 2003/04 7,843.9 10,192.1 18,036.0 15,590.0 33,626.0 2004/05 10,026.0 11,265.1 21,291.1 18,920.7 40,211.7 2005/06 11,422.9 12,389.0 23,811.9 22,565.5 46,377.4 2006/07 13,708.4 15,909.3 29,617.7 27,034.2 56,651.9 2007/08 17,654.1 17,696.3 35,350.4 32,831.8 68,182.1 2008/09 19,715.0 22,397.6 42,112.7 40,397.1 82,509.8 2009/10 24,206.8 28,227.8 52,434.6 51,997.8 104,432.4 2010/11 32,574.9 43,596.1 76,171.0 69,206.0 145,377.0 2011/12 38,537.1 56,312.7 94,849.9 94,548.9 189,398.8 2012/13 45,671.0 69,074.7 114,745.7 120,567.9 235,313.6 2013/14 53,161.4 80,887.8 134,063.8 163,682.8 297,746.6 2014/15 60,460.9 94,245.4 154,706.3 216,622.6 371,328.9 2015/16 66,686.2 111,923.5 178,609.7 266,656.6 445,266.3 2016/17 73,917.7 142,851.9 216,769.6 356,614.4 573,384.1 2017/18 86,417.3 194,737.4 281,154.7 459,418.2 740,572.9 2018/19 92,017.0 216,920.2 308,937.1 577,815.4 886,752.5 2019/20 109,071.8 251,513.7 360,585.5 677,060.8 1,037,646.3 2020/21 133,621.3 303,770.7 437,392.0 910,874.2 1,348,266.1 Source: National Bank of Ethiopia (In Millions of Birr) Table 16: Components of Broad Money End of period

National Bank of Ethiopia Annual Report 2020/21 215 Table 17: Domestic Credit by Sector (In Millions of Birr) Gross Grand Total Total National Bank Comm. Banks Total Loans & Advances Bills Disc. Invest- ments Priority sec. loan to DBE 1=2+5 2=3+4 3 4 5 = 6 to 9 6* 7 8 9 1998/99 23,942.7 13,053.8 10,562.2 2,491.6 10,888.9 10,883.2 - 5.7 - 1999/00 31,283.7 19,423.4 16,533.1 2,890.3 11,860.3 11,852.1 - 8.2 - 2000/01 34,035.1 21,357.4 14,342.5 7,014.9 12,677.7 12,667.6 - 10.1 - 2001/02 28,099.0 15,985.1 8,986.7 6,998.4 12,113.9 12,082.4 - 31.5 - 2002/03 28,689.4 17,229.8 9,387.6 7,842.2 11,459.7 11,417.1 - 42.6 - 2003/04 31,653.0 19,199.2 9,389.2 9,809.9 12,453.8 12,245.1 - 208.7 - 2004/05 40,873.5 21,673.8 19,540.0 2,133.9 19,199.7 15,927.0 - 3,272.7 - 2005/06 49,298.6 25,266.4 19,095.7 6,170.6 24,032.2 19,431.1 - 4,601.1 - 2006/07 61,846.9 30,337.6 24,855.6 5,482.1 31,509.2 23,493.8 - 8,015.5 - 2007/08 78,475.1 33,075.7 35,405.8 (2,330.1) 45,399.4 33,600.6 - 11,798.8 - 2008/09 89,205.9 32,786.5 37,827.2 (5,040.7) 56,419.4 38,802.0 - 17,617.4 - 2009/10 104,416.2 33,013.1 39,340.3 (6,327.2) 71,403.1 47,603.6 - 23,799.5 - 2010/11 135,558.6 28,651.7 45,323.7 (16,672.1) 106,906.9 61,871.3 - 38,785.6 6,250.0 2011/12 189,122.1 21,557.4 45,344.1 (23,786.7) 167,564.6 94,617.0 - 60,445.6 12,502.0 2012/13 233,406.4 21,965.5 55,377.3 (33,411.8) 211,440.8 114,384.6 - 80,549.2 16,507.0 2013/14 299,729.6 26,630.8 64,211.9 (37,581.2) 273,098.9 141,975.8 - 110,866.0 20,257.0 2014/15 393,439.8 30,735.3 77,076.8 (46,341.6) 362,704.5 185,501.9 - 153,845.6 23,357.0 2015/16 490,230.4 47,524.4 95,038.1 (47,513.7) 442,706.0 226,849.2 - 190,249.8 25,607.0 2016/17 631,092.8 85,441.8 120,891.0 (35,449.2) 545,650.9 283,835.2 - 234,589.8 27,226.0 2017/18 784,621.8 102,002.8 140,206.9 (38,204.0) 682,618.9 346,302.9 - 289,023.3 47,292.7 2018/19 963,699.9 109,799.2 172,171.4 (62,372.2) 853,900.7 443,362.2 - 358,395.8 52,142.7 2019/20 1,176,926.7 137,082.9 195,711.0 (58,628.1) 1,039,843.8 571,812.0 - 409,889.1 58,142.7 2020/21 1,481,844.4 214,269.2 245,019.2 (30,750.0) 1,267,575.3 758,869.4 - 452,063.2 56,642.7 Source: National Bank of Ethiopia

Includes Claims on Other Financial Institutions Claims on Non-Central Gov't Claims on Central Gov't End of Period

National Bank of Ethiopia Annual Report 2020/21 216 NBE Total Gold Foreign Exchange Reserve Tranche Total Liab. Comm. Banks NBE Total NBE Comm. Banks 1=2+6 2=3 to 5 3 4 5 6 7=8+9 8 9 10=11+12 11=2-9 12=6-8 1998/99 8,839.9 3,588.8 2.8 3,508.9 77.1 5,251.1 2,752.1 1,685.1 1,067.0 6,087.8 2,521.8 3,566.0 1999/00 7,814.5 2,921.7 2.8 2,840.5 78.4 4,892.8 3,043.9 2,089.5 954.4 4,770.6 1,967.3 2,803.3 2000/01 7,829.5 2,907.8 2.9 2,829.6 75.3 4,921.7 3,029.5 1,815.4 1,214.1 4,800.0 1,693.7 3,106.3 2001/02 11,470.7 5,743.6 2.9 5,660.0 80.7 5,727.1 3,648.3 1,703.3 1,945.0 7,822.4 3,798.6 4,023.8 2002/03 14,427.2 7,988.2 2.9 7,899.3 86.0 6,439.0 3,378.1 1,674.7 1,703.4 11,049.1 6,284.8 4,764.3 2003/04 17,449.8 11,307.3 2.5 11,213.3 91.6 6,142.5 4,452.0 1,889.5 2,562.4 12,997.8 8,744.9 4,253.0 2004/05 19,963.5 13,704.9 57.0 13,556.5 91.3 6,258.6 6,095.5 1,979.8 4,115.7 13,868.0 9,589.2 4,278.8 2005/06 16,759.0 10,071.7 89.2 9,889.6 92.8 6,687.3 4,649.5 1,735.8 2,913.6 12,109.6 7,158.0 4,951.5 2006/07 19,514.9 11,977.3 429.3 11,448.5 99.5 7,537.7 6,174.6 1,986.3 4,188.3 13,340.4 7,789.0 5,551.4 2007/08 16,735.5 8,708.7 5.5 8,589.2 114.0 8,026.8 5,069.9 2,301.9 2,768.0 11,665.6 5,940.7 5,725.0 2008/09 26,434.3 17,214.6 18.2 17,069.0 127.5 9,219.7 8,457.5 3,076.5 5,380.9 17,976.8 11,833.7 6,143.1 2009/10 42,350.1 27,289.3 443.3 26,700.3 145.7 15,060.8 15,160.3 3,254.3 11,906.0 27,189.8 15,383.3 11,806.5 2010/11 79,945.5 51,551.4 1,395.2 49,960.5 195.7 28,394.2 24,410.9 5,715.5 18,695.4 55,534.7 32,856.0 22,678.7 2011/12 64,119.0 40,101.4 2,038.1 37,868.1 195.3 24,017.6 26,738.5 5,484.2 21,254.3 37,380.5 18,847.1 18,533.4 2012/13 72,658.1 44,140.0 2,253.2 41,685.1 201.8 28,518.1 27,009.6 7,515.2 19,494.4 45,648.5 24,645.6 21,002.9 2013/14 77,878.0 50,624.5 1,217.6 49,188.5 218.4 27,253.5 31,905.7 7,995.1 23,910.6 45,972.3 26,713.9 19,258.4 2014/15 82,741.8 66,817.7 79.3 66,423.1 315.3 15,924.1 45,170.9 8,326.6 36,844.3 37,570.9 29,973.4 7,597.6 2015/16 95,055.0 74,156.7 1,113.9 72,711.3 331.5 20,898.2 73,530.8 9,880.5 63,650.3 21,524.2 10,506.4 11,017.7 2017/18 102,738.9 77,617.4 750.5 76,448.4 418.4 25,121.5 63,362.7 14,504.8 48,858.0 39,376.2 28,759.4 10,616.8 2018/19 127,270.4 98,726.6 804.9 97,484.0 437.8 28,543.8 112,765.3 18,006.4 94,758.9 14,505.2 3,967.8 10,537.4 2019/20 147,202.7 112,086.4 3,280.6 108,280.4 525.4 35,116.3 155,524.2 24,578.2 130,946.0 -8,321.5 -18,859.6 10,538.0 2020/21 202,804.7 125,859.7 628.2 124,551.3 680.2 76,945.0 203,617.1 33,850.4 169,766.7 -812.4 -43,907.0 43,094.6 Source: National Bank of Ethiopia (NBE) CBs' = Commercial Banks' Net Gold & Foreign Exchange Table 18: Gold & Foreign Exchange Holdings of the National Bank of Ethiopia and Commercial Banks End of Fisical Year Gross Total National Bank of Ethiopia International Reserves CBs' Foreign Exchange Foreign Liabilities Gross Gold and Foreign Exchange Holdings

National Bank of Ethiopia Annual Report 2020/21 217 Table 19: Treasury Bills Auction Results 2008/09 28471.9 83.0 178.0 261.0 21974.5 24792.7 46767.2 2672.0 25167.8 27839.8 0.520 2009/10 55203.3 82 198 280 23386.9 27871.2 51258.1 13902.0 27834.5 41736.5 0.652 2010/11 83390.7 65 155 220 23715.3 32044.8 55760.0 20271.3 32044.8 52316.0 1.305 2011/12 96511.9 202 204 406 26712.7 50482.1 77194.8 24212.7 50482.1 74694.8 1.944 2012/13 107484.5 394 210 604 51493.5 62185.7 109184.5 51493.5 62185.7 109184.5 2.203 2013/14 88074.94 226 240 466 31226.00 81608.55 112834.55 16989.0 76933.5 94233.3 1.503 2014/15 100,739.44 - 248 248 - 136,536.77 136,536.77 - 110,593.34 110,593.34 1.340 2015/16 145,877.44 - 217 217 - 161,575.24 161,575.24 - 199,199.98 199,199.98 1.323 2016/17 204,543.24 - 200 200 - 225,321.24 225,321.24 - 225,321.24 225,321.24 1.298 2017/18 286,494.24 - 192 192 - 323,991.24 323,991.24 - 323,991.24 323,991.24 1.341 2018/19 397,958.24 3.00 189 192 650.00 421,983.54 422,633.54 650.00 421,983.54 422,633.54 1.410 2019/20 231,486.88 35 128 163 11,143.00 232,012.09 243,155.09 5,980.00 228,859.09 234,839.09 4.526 2020/21 330,673.00 286 117 403 127,679.00 157,104.55 284,783.55 109,655.86 129,143.70 238,799.55 7.977 Annual Weighted Yield Number of Bidders Amount Demanded in millions of Birr Amount Sold in millions of Birr Period Bank Non-bank Total Bank Non-bank Total Bank Non-bank Total Amount Offered

National Bank of Ethiopia Annual Report 2020/21 218Table 20: Employment Created by Domestic & Foreign Investment Projects Which Have Commenced Operation, by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 6,082 859 259 2428 536 1,862 3 5 27 2 Construction 3,346 5,232 1664 2738 3,368 1,788 100 168.0 1,837 961 Education 89 0 16 23 200 154 2 2.0 Electricity, gas, steam and water supply 0 250 Fishing Health and social work 20 5 44 220 43 8 6 6 74 23 Hotels and restaurants 23 35 97 64 173 75 35 20 391 192 Manufacturing 6,016 3,143 123,353 8,070 15,918 5,142 2,858 1,387 6,657 2,116 Mining and quarrying 74 299 96 414 35 92 Other community, social and personal service activities 37 8 125,002 109 19 12 Real estate, renting and business activities 4,989 187 81,347 21,710 2,269 1,303 52 41 1868 2362 Transport, Storage and Communication 28 7 23 28 44 121 0 807 388 Wholesale, retail trade & repair service 2 0 23 66 Others* 8 100 160 26 105 34 5 84 22 Grand Total ϮϬ͕ϳϭϮ ϵ͕ϳϳϱ 332,003 36,214 22,631 10,541 3,211 1,634 11,768 6,132 2013(2020/21) Sector 2009(2016/17) 2010(2017/18) 2011(2018/19) 2012(2019/20)

National Bank of Ethiopia Annual Report 2020/21 219 Table 21: Number and Investment Capital of Domestic & Foreign Investment Projects Which Have Commenced Operation by Sector ΀ŝŶŵŝůůŝŽŶƐŽĨŝƌƌ΁ No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Agriculture, hunting and forestry 14.0 119.6 42.0 322.8 27.0 297.7 1.0 10.5 6.0 114.5 Construction 199.0 1,081.9 344.0 3,002.1 176.0 1,745.7 15.0 135.5 224.0 1,799.1 Education 4.0 6.1 7.0 67.8 6.0 68.2 1.0 2.5 2.0 13.0 Electricity, gas, steam and water supply 1.0 100.0 Fishing Health and social work 3.0 13.7 15.0 276.4 5.0 25.3 3.0 18.0 9.0 864.1 Hotels and restaurants 2.0 9.5 5.0 57.8 7.0 39.5 3.0 307.9 18.0 5,887.4 Manufacturing 149.0 1,888.0 578.0 14,494.8 337.0 4,647.0 42.0 710.1 242.0 12,097.0 Mining and quarrying 8.0 18.7 7.0 81.0 4.0 38.2 Other community, social and personal service activities 4.0 5.2 46.0 245.8 2.0 82.0 1.0 5.0 Real estate, renting and business activities 81.0 5,737.4 496.0 7,204.8 404.0 1,909.3 15.0 98.3 238.0 10,426.5 Transport, Storage and Communication 3.0 14.7 5.0 11.4 5.0 20.0 2.0 17.9 34.0 669.2 Wholesale, retail trade & repair service 1.0 2.0 3.0 381.5 Others* 1.0 1.9 3.0 9.5 3.0 78.8 2.0 19.6 8.0 1,816.1 Grand Total 468.0 8,896.9 1,550.0 25,876.2 976.0 8,951.7 84.0 1,320.3 785.0 34,073.4 2013(2020/21) Sector 2009(2016/17) 2010(2017/18) 2011(2018/19) 2012(2019/20)

National Bank of Ethiopia Annual Report 2020/21 220Table 22: Number and Capitalof Domestic & Foreign Investment Projects Which Have Commenced Operation, by Region ΀ŝŶŵŝůůŝŽŶƐŽĨŝƌƌ΁ No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Addis Ababa 376 8307.5 1,362 19,839.3 681 6,838.4 40 650 711 30,820 Afar 46 380.0 Amhara 42 104.5 15 39.7 20 152.5 6 11 41 285.2 B.Gumze 1 2.0 Dire Dawa Gambella Harari Multiregional 59.0 5,217.5 69 1,135 37 645 33 2,967.7 Oromia 19 336 157 560.4 SNNPR 10 83.5 1 2.5 Somali Tigray 21 65.9 66 395.3 49 265.6 1 15 Grand Total ϰϲϴ ϴϴϵϲ͘ϵ ϭ͕ϱϱϬ Ϯϱ͕ϴϳϲ͘ϯ ϵϳϲ ϴ͕ϵϱϭ͘ϳ ϴϰ͘Ϭ ϭ͕ϯϮϬ͘ϯ ϳϴϱ͘Ϭ ϯϰ͕Ϭϳϯ͘ϰ 2013(2020/21) Sector 2009(2016/17) 2010(2017/18) 2011(2018/19) 2012(2019/20)

2020/21 NATIONAL BANK OF ETHIOPIA