💳 No Siblings Required?

Welcome to the 95th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🌍 Buzz: Netflix, Forex & the New NBE Rules

• 🛒 Mortgaging A Stove With Layaway

• 🖼️ Big Picture

Thanks for reading!

BUZZ: Could You Soon Pay For Netflix With Local Card?

Economy

 The Story in Three Lines

→ The National Bank of Ethiopia just relaxed parts of its foreign exchange directive.
→ Among other things, banks can now issue internationally recognized foreign currency cards to make online payments.
→ This is liberalization, not abundance.

For years, paying for Netflix in Ethiopia required strategy.

Step 1: Text sibling/cousin abroad.
Step 2: Explain urgency.
Step 3: Wait for response.
Step 4: Hope relationship is still strong.

Now, thanks to the new directive from the National Bank of Ethiopia (NBE), banks are officially allowed to issue internationally recognized foreign-currency payment cards to make outbound retail payments, including e-commerce transactions.

Translation: your Ethiopian bank card might finally work online internationally.

Let’s slow down.

What Actually Changed?

The directive does quite a bit.

It shifts operational power from the central bank to commercial banks. Instead of seeking case-by-case approvals for many foreign exchange activities, banks now have broader authority to:

• Issue foreign-currency-denominated international payment cards
• Allow more flexible use of foreign currency accounts
• Let service exporters retain 100% of their forex earnings indefinitely (up from ~50%)
• Process certain FX transactions with simplified procedures
• Approve and handle more external payments directly

That last part is crucial. Ethiopia’s FX system has been built around tight central oversight. This directive moves us from “wait for permission” toward “banks can execute, within rules.”

That’s liberalization.

So… Netflix? 

In theory, yes.

Implementation still depends on banks building the products and integrating with international payment networks. In other words, you may need to keep losing arguments with your sibling for a little longer.

However, if you:
• Have a foreign currency account
• Actually have dollars in it
• Receive one of these international cards

Then you should be able to pay for Netflix, Spotify, LinkedIn Pro, Microsoft Office, online ads and so on. For freelances, remote workers, startups and anyone operating online businesses on TikTok or elsewhere, this solves many very real problems.

But repeat after us: this is liberalization, not abundance. The rules are looser. The ዶላር is still scarce.

If you earn forex, good for you. No forex in your account? Your Netflix dreams are still on hold.

What’s the Real Story?

As much as we’d love to catch up on Netflix’s Black Mirror, the bigger story is economic integration with the rest of the world.

These new rules could:

• Enable students to pay for online classes/certifications/degrees etc (think Coursera)
• Encourage remote workers to bill clients abroad, keep FX earnings and even spend it as they wish, legally
• Reduce dependence on informal forex channels
• Make it easier for startups to pay for digital tools
• Increase trust in the formal banking system
• Gradually deepen the digital economy

So, this reform isn’t just about a few importers and exporters. It’s also about middle-income Ethiopians participating in a globalized system.

How Do We Compare in Africa?

According to recent Business Insider Africa rankings, countries like Kenya, South Africa, Egypt and even Uganda have much better access to foreign exchange liquidity.

Take Kenya, our friendly neighbors and overachievers.

Across the border:
• Forget USD, you can pay Netflix in Kenyan shillings!
• Your debit card just works.
• Nobody calls their cousin for help.

Why? Because Kenya has a more mature system, with deeper forex availability and a more flexible market. Most importantly, companies are comfortable pricing in local currency because they can repatriate earnings easily. They know they can convert and move funds back home without severe restrictions.

That creates a ስሞዝ system:

Forex availability → Easy repatriation → More global companies price in local currency → Easy transactions → Digital growth.

Ethiopia has historically operated on:

Forex Scarcity → Controls → Parallel market → Workarounds.

Combined with the many reforms from the NBE lately, this directive is trying to change that pattern and move us closer to….frankly, where we should be.

What Hasn’t Changed

Let’s manage expectations.

• Forex is still limited.
• The parallel market doesn’t vanish overnight.
• Not everyone will suddenly get a USD card.
• Dollars still have to enter the system through increased exports, formalized remittances, and improved foreign direct investments (FDI).

Rules can be relaxed, but forex cannot be legislated into existence. If dollars coming in the country don’t increase, flexibility alone won’t fix underlying issues.

It’s not hard to foresee the NBE having to roll back this directive if things don’t go as planned.

The Big Picture

The latest directive isn’t a standalone policy but part of an evolving liberalization strategy aimed at fixing long-standing foreign exchange scarcity and procedural inefficiencies.

But this one signals something important: the central bank is loosening its grip and giving banks more operational space. That’s a vote of confidence in the system. And a vote of approval from us.

It’s not a revolution per se, but it’s a step. One day, paying for Netflix won’t require strategy, diplomacy, and small-talk with a foreign based relative. But the real goal is to move Ethiopia from a system built on workarounds to one built on Forex stability and functionality.

When that day comes, we’ll know the reforms have worked.

Until then? Keep your cousin’s number just in case.

ፍራንክ Picks 

🚶🏽 Event: Medical & Healthcare Trade Exhibition [March 06-08, Millennium Hall]

🗞️ In the news: Mystery Foreign Company Submits ECMA License Application

♟️ Innovation: Kubik may be the only innovation born in our construction sector

Layaway: An Experiment Worth Trying?

Personal Finance

When the world says “no”, only the brave fight back and find a different way. 

And no, this is not the start of a motivational post but an analogy of what western financing has done to consumerism.

The concept of layaway is dated, almost phased out in most developed countries, and yet Ethiopia might get a glimpse of it thanks to Carrefour’s entry into the market. 

With layaway, you can put a deposit on an item that you want and then pay the rest of the amount over time. If this sounds familiar, maybe reminding you of some of our previous yapping of Buy Now Pay Later (BNPL) schemes, then you’re bang on you savvy reader you 😏

The idea here is that layaway can alleviate the burden (like most financing forms) of the financially distressed. Although that applies to most shoppers here in Ethiopia. Carrefour has a layaway program in both Kenya and Uganda: 10% deposit, 90 day repayment period, and applicable to a few items.

You don’t take ownership of your item until you’ve settled your bill. And let’s say you fail to pay the rest, the item is kept in stock, your money paid back but with a fee, typically.

In theory, this concept seems like a win-win: shoppers get access to interest free credit and suppliers get cash upfront without moving inventory. However, some challenges do pop up, from the supplier side, managing layaway campaigns could add administrative load. While shoppers will not get instant gratification if they can’t get their hands on their washing machine, toaster, 4K TV right way. 

It’s like unwrapping your ገና gifts on Easter 🙄

But layaway is not the only financier waiting for you at the cashier:

1. Credit cards

• Pro: these promise credit flexibility, do not need you to put a deposit, do not limit you to a few items and good repayment will put you on the ‘nice’ list of borrowers

• Con:  - they carry a an interest and a missed payment could affect your financial status

2. Buy Now Pay Later (BNPL) as we mentioned

• Pro: - No upfront payment, interest free, and most suppliers already work with selected providers

• Con: - Could promote overspending, customers can have different open BNPL accounts 

While our financial system seems like it’s lounging on a beach chair somewhere in Barbados, sipping on Mai Tais, other sectors are creating use cases where financing is at the heart of the experience.

So what’s holding banks and others from dipping their toes in the lake of opportunities?

Well it’s a mixture of stagnant regulation and the good old ‘follower’ mentality. No one wants to take the first step and expose themselves. There’s fear, lack of confidence and a general sense of not deviating from the norm.

Layaway is another experiment that Ethiopia will go through, and it’s about time as well. Although not a novelty, it shows that we can’t wait on the financial sector to push for change.

So here is our inspirational message to the financiers ‘be brave, and when the world pushes its negative narrative, maybe use it as your fuel and start thinking about innovation before supermarkets start issuing loans.’

Big Picture

Paying while shopping is about to get an extreme makeover.

Layaway programs are not the ‘hot and sexy’ items that they were decades ago but Ethiopia will hopefully get a taste of it soon thanks to Carrefour.

This type of offering is another confirmation that times are changing, and for the better too. But our system is being reactive instead of proactive.

Innovation is the pillar of any developing economy, sleep on it and it will set you back years. Ethiopia is already playing catchup, it can’t afford to sit in the back seat anymore.

Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!