Ethiopia

Ethiopia is a federal parliamentary republic of regional states organised largely along ethno-linguistic lines. The President is a largely ceremonial head of state, and executive power rests with the Prime Minister. Prime Minister Abiy Ahmed’s Prosperity Party won a large majority in the general election of 1 June 2026, though voting did not take place in Tigray and some polling stations elsewhere did not open. The new House of Peoples’ Representatives re-appointed Abiy for a five-year term on 5 October 2026. Since July 2024 the government has pursued economic reforms, including a market-based exchange rate, supported by a four-year IMF Extended Credit Facility of US$3.4 billion. The fifth review was completed in July 2026. Ethiopia is restructuring its external debt with official creditors and bondholders. It has opened banking to foreign investors and launched the Ethiopian Securities Exchange. Ethiopia hosts the African Union, joined BRICS in 2024 and belongs to IGAD, COMESA and the AfCFTA. Security in Amhara, Oromia and Tigray, and relations with Eritrea, remain significant risks.