Ethiopia and China Reach a Currency Swap Agreement

 
   
According to Finance Minister Ahmed Shide, Ethiopia and China have concluded a currency exchange agreement that permits trade in Ethiopian Birr and Chinese Yuan. The accord seeks to improve trade liberalization, boost foreign direct investment (FDI), alleviate shortages of foreign currency, and fortify Ethiopia's economic alliances.


Ahmed said the Ethiopian Broadcasting Corporation, "The two national banks have committed to issuing directives for the cooperation."


One of Ethiopia's main trading partners is China. Ethiopia imports a vast array of items from the second-largest economy in the world and mostly sends oil seeds, flowers, coffee, and meat to China. From $254 million in 2001 to $4.07 billion in 2016, Chinese exports to Ethiopia rose, demonstrating the strengthening bilateral relations between the two nations over the
 the previous 20 years.


It's also important to note that Alibaba Group-owned AliExpress, a significant online retailer, just joined the Ethiopian market.


According to Ahmed, the agreement has already been made; the specifics of the currency swap will be worked out in later conversations. This agreement bears similarities to the July 2024 bilateral currency swap agreement Ethiopia inked with the United Arab Emirates, valued at up to 46 billion birr ($816.79 million).


The deal is reached while Prime Minister Abiy Ahmed is in China for the China-Africa Summit of 2024. Abiy had a meeting with Chinese President Xi Jinping while in the country. Ahmed, Belete Molla (PhD), Mekdes Daba (MD), the Minister of Innovation and Technology, and others are in his delegation.
Minister of Health and Zeleke Temesgen, Ph.D., Deputy Commissioner of the Ethiopian Investment Commission. Sadly, this team does not include Mamo Mihretu, the governor of the National Bank of Ethiopia.


Ethiopia is very grateful for China's ongoing and comprehensive assistance. We are making great progress in a number of industries, including tourism, manufacturing, industry, agriculture, and telecommunications, despite a number of obstacles," Abiy posted on X, formerly Twitter.


Abiy also had a meeting with representatives of the China Communications Construction Company (CCCC), the massive construction company that is in charge of several of Ethiopia's largest projects, such as the Sheger riverbank development project. The visit includes a business showcase between Ethiopia and China.


President Xi Jinping promised during the summit to expand China's assistance throughout Africa, allocating nearly $51 billion over the course of three years to finance infrastructure projects and generate at least one million positions.


As the contemporary China-Africa relationship celebrated its 70th anniversary in 2023, trade between the two regions hit a record high of $282 billion.


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