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Ethiopia closed its 2025/26 fiscal year with record export earnings above $11 billion, comfortably beating the government’s $9.8 billion target and up sharply from $8.3 billion the year before. The headline number masks a structural problem officials have been trying to fix for years: gold and coffee alone generated $8.6 billion, or 78.2% of total export earnings, up from 73.5% a year earlier, meaning Ethiopia’s export base has grown more concentrated, not less, even as overall revenue hits new highs.
Gold did the heavy lifting. The metal remained Ethiopia’s largest foreign exchange earner, generating nearly $5.5 billion, roughly half of total export receipts and a 62% jump from $3.4 billion the previous year. Prime Minister Abiy Ahmed called the figure unprecedented, noting Ethiopia exported more gold value in this single fiscal year than the cumulative $3.7 billion generated across the 27 years before his administration took office in 2018. Coffee held its position as the second-largest export earner, bringing in $3.1 billion, up 19% from $2.6 billion in 2024/25.
Officials attribute the gold surge to macroeconomic reforms introduced in July 2024, which they say reduced contraband trade and pushed producers toward official export channels, a policy success on its own terms, even as it deepens Ethiopia’s reliance on a single commodity. The government is pinning its diversification hopes on manufacturing, targeting $1 billion in manufacturing exports in the new fiscal year, up from just $370 million in 2024/25, a near-tripling that will test how quickly Ethiopia’s industrial base can scale. The early indicators are encouraging, manufacturing expanded 20.3% during 2025/26, while mining grew even faster at 24%, supported by higher gold production and exports. Abiy told lawmakers the country’s import substitution programme has now reached an estimated $5 billion in value, replacing imported industrial goods with domestic production.
Construction materials backed up the industrial growth story, cement production rose 26%, manufacturer electricity consumption climbed 16%, and Abiy pointed to improved output in steel, glass and ceramic tile as further evidence of expanding domestic capacity. Government projects the industrial sector will grow 12.7% in 2026/27, driven by continued investment, industrial park expansion and policies aimed at boosting domestic production and exports. Services delivered 9.8% growth for the year, anchored by Ethiopian Airlines, which carried approximately 17 million international passengers and 4 million domestic passengers reinforcing its position as one of Africa’s leading aviation hubs and generating roughly $9.5 billion in foreign exchange earnings for the sector.
Foreign direct investment reached $4 billion, remittances hit $7.9 billion and the country secured about $5 billion in grants and external loans for development and infrastructure, together contributing to total foreign capital inflows of an estimated $38 billion for the year, up 18.4% on the previous year. Government estimates the broader economy expanded 10.2% in 2025/26, with growth spread across agriculture, industry and services. Inflation was the one soft spot in an otherwise strong macro picture. Abiy told Parliament that Ethiopia’s steady progress bringing inflation down had been interrupted by external shocks, specifically the Iran-US-Israel conflict, which disrupted international markets and pushed price growth back into double digits after a period of gradual decline. The government expects the pressure to ease as external conditions stabilise and ongoing reforms take further effect.
Alongside the economic report, Abiy used his parliamentary address to address a sharper-edged concern, renewed military tension in northern Ethiopia. He accused Eritrea of working to reignite conflict in the Tigray region by encouraging renewed hostilities, while insisting Addis Ababa remains committed to preserving peace. “The Ethiopian government prefers peace. However, the Eritrean government is working to create conditions for war to re-emerge in the Tigray region. Our military readiness is directed against external actors seeking to use the TPLF and other forces to destabilize the country,” explained Abiy told lawmakers.
Abiy also linked the Tigray People’s Liberation Front to Sudan’s civil war, alleging that young people from Tigray have been compelled to fight alongside forces aligned with the Sudan Armed Forces under Lieutenant General Abdel Fattah al-Burhan against the Rapid Support Forces, allegations that have not been independently verified. International concern has grown in parallel. Human Rights Watch has raised alarm over alleged forced recruitment by Tigrayan forces, reporting that fighters and local officials have recruited civilians including children as young as 15 since at least April 2026, with former combatants reportedly taken from homes, workplaces, streets and artisanal gold-mining sites across Tigray. The organisation’s findings draw on interviews conducted in June with 18 witnesses, relatives of recruits, and people who said they had escaped or evaded recruitment.
International organisations and foreign governments continue to warn that renewed fighting could trigger another humanitarian crisis and have urged all parties to resolve differences through dialogue and honour commitments under the Pretoria Peace Agreement. Ethiopia’s economic momentum against its security risk, the picture is genuinely two-sided, record exports, accelerating industrial growth and strong capital inflows on one hand, set against an export base still dangerously narrow and a northern security situation that international observers say remains fragile enough to unravel the gains built since the Pretoria accord.
