Ethiopia\u2019s remittance numbers show how important diaspora dollars are, but they do not show that a crackdown has defeated the parallel market. The National Bank of Ethiopia says net private remittances rose 36.5 percent to $4.6 billion in the first half of the 2025\/26 fiscal year. Government presentations have put full-year diaspora inflows near $7.9 billion, while headline inflation was reported at 9.7 percent. Those are important facts about the size of the FX economy, not proof that formal channels have won. Dollars can enter the banking system and families can still feel that the birr they receive does not match the market value of those dollars.<\/p>\n
People use black-market dealers and hawala because the official birr rate still does not reliably reflect what dollars are worth in Ethiopia. Addis Ababa called the July 2024 adjustment a float, but it is not a real float like the more market-linked systems in Kenya and Uganda. The NBE still manages the rate and access to foreign currency, leaving a gap between an administrative price and the price people can actually obtain. That gap is not a moral failure by families trying to pay fees, buy medicine, fund tuition, or support relatives. It is a policy-created market.<\/p>\n
A managed FX regime is convenient for official privilege. When the rate is controlled from the top, officials and connected businesses can gain access to scarce dollars at terms ordinary households cannot get. Abiy Ahmed\u2019s regime can describe each intervention as reform, but the result is still rationing, delay, and an incentive to search outside the banks. The government in Addis Ababa cannot close that gap with speeches about formal FX or with another enforcement campaign.<\/p>\n
The NBE\u2019s warnings about unlicensed remittance activity, and the April 2026 list of approved providers including Western Union, MoneyGram, PayPal, telebirr, and Yaya Wallet, are useful information for consumers. They are not a solution to the price problem. Criminalizing hawala or treating market-rate exchange as the disease attacks the symptom. Hawala persists because it can be faster, more trusted, and closer to the price people believe their dollars deserve. Pushing those transactions further underground raises risk and remittance costs without creating a single new dollar.<\/p>\n
The fix is to float the birr for real, not merely relabel a managed rate. The NBE should publish transparent intervention rules, let banks and licensed remittance providers compete for FX, and stop using police power as exchange-rate policy. A genuine float may expose the depth of Ethiopia\u2019s currency weakness, but that information is more useful than a subsidized official quote and a parallel market that everyone knows is real. Until Abiy, Abiy Ahmed\u2019s government, and the regime in Addis Ababa accept that, every hawala crackdown will be public relations around the same broken incentive. Ethiopia needs a credible exchange rate that reflects the market, so remittance dollars can move through safer channels without asking households to pretend that the official birr price is true.<\/p>\n
Sources:<\/strong><\/p>\n Banks in Ethiopia \/ NBE figures<\/a><\/p>\n Birr Metrics on NBE hawala enforcement<\/a><\/p>\n