Prime Minister Abiy Ahmed (PhD) announced recently that Ethiopia is working to localize production of its currency, the Birr, to mitigate risks associated with the external printing of the country’s legal tenders.
This project would be overseen by the country’s state-owned investment arm, Ethiopian Investment Holdings (EIH), the PM said at the Finance Forward Ethiopia 2026 conference.
“The institution will build many key, untold strategic arms,” he told participants of the conference.
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Through this initiative, his administration aims to expand domestic currency production capacity as part of a larger goal to develop strategic national assets for public ownership.
The PM also relayed that the holding company’s size is expected to grow substantially in the coming years, and by 2030, it is expected to contribute approximately 20 percent of the GDP.
“If this target is achieved, Ethiopia will have created a structure that can be transferred to the next generation,” Abiy said.
Experts like Abdulmenan Mohammed (PhD), a London-based financial analyst keeping a close eye on Ethiopian banking, welcome the government’s recent decision to explore printing banknotes locally, describing it as both timely and strategic.
“Since the reign of Emperor Haile Selassie I, Ethiopia’s currency has largely been printed abroad, mainly in England and France,” says Abdulmenan.
He notes that printing currency is far from a routine administrative task.
“Banknotes are not ordinary documents. They are complex instruments that require advanced technology, sophisticated security features, and strict controls,” said Abdulmenan.
For decades, this complexity justified Ethiopia’s reliance on foreign printers. However, he argues the continued practice of printing the Birr abroad may be less about technical incapacity and more about weak long-term planning.
“I believe Ethiopia now has the capacity to invest in the required technology,” he says, noting that discussions about local banknote production are not new. “This idea has been on the table for years, and I think it is now in its final stage.”
The Cost of Printing Money Abroad
One of the strongest arguments for local banknote production is cost.
Printing money abroad requires substantial foreign currency expenditure. Citing the National Bank of Ethiopia’s (NBE) 2024 report, Abdulmenan notes that the central bank spent about 1.30 billion Birr on printing banknotes overseas.
“Printing the Birr locally would significantly reduce foreign currency outflows,” he argues. “At a time when Ethiopia faces persistent pressure on its foreign exchange reserves, this saving is not small.”
Experiences from other African countries support this view.
Nigeria, for example, has printed much of its currency locally through the Nigerian Security Printing and Minting Company, reducing reliance on foreign printers and foreign exchange costs.
South Africa’s South African Bank Note Company (SABN) is another example of heavy investment in domestic capacity, allowing it not only to meet local demand but also to export banknotes to other countries.
By contrast, countries such as Ghana, Kenya, and Tanzania have continued to rely partly or fully on foreign printers—mainly due to the high upfront investment required for technology and security infrastructure.
A 2019 study by Joshua Yindenaba and Agyapomaa Gyeke indicated that central banking and monetary policy institutes in Africa show that while foreign printing ensures high-quality output, it exposes countries to exchange-rate risks and supply disruptions.
Security and Governance Risks
Despite the economic advantages, Abdulmenan cautions that local printing carries serious risks if not properly managed.
“Currency printing is extremely sensitive. It requires corruption-free systems, highly secure facilities, and world-class technology,” cautions the analyst.
Weak governance could undermine the entire process, leading to counterfeiting, loss of confidence, or inflationary pressures.
He also raises concerns about the physical durability of Ethiopian banknotes.
“Birr notes tend to go out of circulation quickly due to fading and tearing,” he says. “This suggests the need for better-quality materials as well as stronger security features to prevent forgery.”
National security is another key consideration. Printing money abroad can expose a country to geopolitical risks.
“In today’s polarized global politics, external printing creates vulnerability,” Abdulmenan argues. “In the event of political disputes, assets can be frozen or deliveries delayed. From this perspective, printing locally is far more secure.”
On the other hand, Yigermal Meshesha, a financial sector specialist with over 16 years of experience in the banking industry, sees printing money locally as a “tool to protect sovereignty.”
“We and other countries which print money abroad have trust in the company that prints the money,” he said. “If the company compromises the trust, prints the legal tender and pumps the money in the economy in some other ways or collaborates with bodies with such a motive—that means Ethiopia’s economy will be in danger.”
Yigermal observes the logistics of transporting huge amounts of currency also carries risks and massive logistics costs. He also notes that in the event of sanctions or shipping restrictions, a country that relies on foreign printers could find its money effectively stranded abroad.
“If a diplomatic dispute erupts between an Asian country and an EU member state where its currency is printed, the consequences are immediate,” he explained. “The host country could delay production or even block the release of the currency altogether.”
Inflation and Monetary Policy Concerns
Addressing fears that local printing could fuel inflation, Abdulmenan explains that inflation is driven more by monetary policy decisions than by the physical location of printing.
“The NBE can inject liquidity either electronically or in cash form,” he says. “Banks receive money when they face cash shortages, regardless of where notes are printed.”
He adds that while electronic money may reduce the long-term need for physical cash, it does not automatically eliminate inflationary risks.
“Digital money can still be monetized and channeled into government accounts,” he notes. At the same time, he reminds that NBE proclamations restrict direct central bank borrowing by the government.
“Cash will still be necessary for large parts of the economy—especially the informal sector, agriculture, and small industries,” Abdulmenan said.
However, an economist who spoke to The Reporter Magazine anonymously disagrees with Abdulmenan’s view on inflation. He worries that domestic capacity could translate into unregulated printing, which he argues will stoke inflation.
“Usually when you print money abroad it could be monitored by the International Monetary Fund and others,” said the economist. “Who’s going to control how much money the government prints?”
He raised Zimbabwe’s struggles with hyperinflation as an example of the consequences of unbridled local currency printing.
“The government could pay salaries of workers for its corridor development by printing money until the revenue is generated, but the inflationary impact will be high,” said the economist.
He noted that an independent central bank is key if domestic printing plans are to go ahead, and pointed to Ethiopia’s limited capacity to produce high-security documents—such as passports, national IDs, stamps, and academic certificates—at the required quality and security standards.
Historically, Ethiopia has relied on some of the world’s most prominent banknote printing companies. During the imperial period, both British and American firms were involved in producing Ethiopian currency.
Chief among them is the British firm De La Rue, which has long been involved in printing the Birr. Founded in 1813 in England, De La Rue is one of the world’s largest commercial banknote printers, supplying currency, passports, and security documents to more than 140 countries.
Another major British firm, Bradbury Wilkinson and Company, printed Ethiopian banknotes in the mid-20th century. Established in 1856, Bradbury Wilkinson was renowned for high-security engraving and printing until it was later acquired by De La Rue.
On the American side, the Security Banknote Company (SBNC) of Philadelphia printed Ethiopian Birr during the reign of Emperor Haile Selassie I. After 1945, U.S. influence in Ethiopia grew, and US firms played a greater role alongside British companies in currency production.
This foreign dominance was also reflected in leadership. Charles Saint John Collier, the first Governor of the State Bank of Ethiopia (serving from 1913 to 1936), was British, underscoring the early institutional influence of the United Kingdom on Ethiopia’s financial system, observes Abdulmenan.
Ethiopia began issuing its own banknotes in 1915 through the Bank of Abyssinia. These notes were denominated in Birr and labeled in Amharic. In 1931, Emperor Haile Selassie I formally requested that the international community adopt the name “Ethiopia” instead of “Abyssinia.”
Accordingly, the Bank of Abyssinia became the Bank of Ethiopia, and the currency came to be known as the Ethiopian Birr—though it remained the same currency in practice.
During the Italian occupation (1936–1941), Italian authorities attempted to replace the Birr with the Italian lira. Ethiopian banknotes were withdrawn at an initial rate of three lire per Birr, later adjusted several times to encourage adoption of the lira. Despite these efforts, many Ethiopians continued to hold on to their birr and Maria Theresa thalers. The East African (English) shilling also circulated for a period after liberation.
Following the restoration of Ethiopian sovereignty, the State Bank of Ethiopia was reestablished in 1945 and issued new banknotes in denominations ranging from 1 to 500 birr. The National Bank of Ethiopia was created in 1963 and began operations in 1964, taking over full responsibility for note issuance by 1966.
Under the Derg regime, a new series of banknotes was introduced in September 1976, replacing imperial imagery. These notes remained in circulation until 1997, when a new series with enhanced security features—particularly for higher denominations—was released ahead of the Ethio-Eritrean war. A modern one-Birr coin was also introduced to replace the corresponding banknote.
In 2020, just weeks ahead of the start of the northern war, Ethiopia underwent a demonetization process that saw the introduction of the 200-Birr note. Reports indicate that De La Rue and the German Giesecke+Devrient were the printers.
A 2024 policy-oriented and technical research conducted by central banks and international monetary institutions such as IMF suggests that countries benefit most from local banknote printing when strong governance, advanced technology, and institutional independence are in place.
These findings draw particularly on comparative studies and operational reviews by the Bank for International Settlements (BIS) Innovation Hub, research papers and technical notes published by the IMF, and internal assessments by African central banks such as the South African Reserve Bank (SARB) and the Central Bank of Nigeria (CBN).
In addition, industry-level research and benchmarking reports produced by the International Bank Note Society (IBNS), the High Security Printing (HSP) community, and currency technology studies commissioned by security printing firms such as De La Rue and Giesecke+Devrient in 2021 emphasize that local banknote production is most effective when supported by advanced anti-counterfeiting technology, strict access controls, and strong institutional oversight. These studies also warn that without transparency, independent audits, and legal safeguards, domestic printing facilities can increase fiscal and inflationary risks.
