Economy and Finance

Houthi control of Perim and Mokha has sharply raised war-risk costs and cut traffic through the Bab el-Mandeb Strait, threatening the Djibouti corridor that carries about 90 percent of Ethiopia's trade. No very large crude carriers had transited the strait since September 9, and the Global VLCC Index hit a record roughly $97,000 a day on September 16. Higher insurance premiums and Cape of Good Hope diversions are pushing up landed prices and squeezing export margins in Addis Ababa.

Ethiopian President Taye Atske-Selassie used his UN General Assembly address to press Ethiopia's case for sea access, citing the country's rapid economic transformation. He also called for an overhaul of the UN Security Council during a tense session.

Ethiopia is shifting its industrial strategy toward domestic production and import substitution, backed by a national strategy published in September 2026 targeting selected manufacturing subsectors. The push aims to replace competitive imports while building factories, supplier networks, skills and industrial linkages that retain value and foreign exchange. Ethiopia's large domestic market and Horn of Africa position are meant to serve as a platform to build at home, connect regionally and eventually compete globally.

Ethiopia is preparing to formally join the World Trade Organization after years of negotiations. The government has been aligning its trade, tariff and investment policies with WTO rules to complete its accession process. Officials say membership is expected to boost exports, attract foreign investment and integrate the country into the global trading system.