Ethiopia has announced plans to reduce its reliance on the U.S. dollar by trading with partner countries like the UAE in local currencies, aiming to protect its economy and support continental efforts toward financial independence.

Ethiopia has announced a strategic shift in its international trade policy by moving to reduce reliance on the U.S. dollar, signalling a broader effort to protect its economy and strengthen regional financial integration.

In a statement released over the weekend, Ethiopia’s Ministry of Finance confirmed that the country had entered into new bilateral agreements—most notably with the United Arab Emirates—to facilitate trade using local currencies instead of the dollar. The initiative is designed to stabilise Ethiopia’s trade balance, expand access to foreign markets, and shield the economy from external currency shocks.

Speaking to the state-owned Ethiopian Broadcasting Corporation, State Minister of Finance Eyob Tekalign emphasised that the shift aims to serve Ethiopia’s national interests by easing overdependence on a single currency and promoting a more resilient trade framework. "This approach will allow Ethiopia to engage more flexibly and securely in global commerce, while protecting the country's long-term economic interests," Tekalign said.

The move also aligns with growing momentum across the African continent for monetary reform and regional economic integration. As part of the African Union’s broader strategy, several nations are exploring alternatives to the dollar, including the proposed adoption of a unified African currency—tentatively named the “Afriq” or “Afro”—under the African Continental Free Trade Area (AfCFTA) framework.

Observers note that while the U.S. dollar remains dominant in global trade, Ethiopia’s decision reflects a growing trend among developing nations to diversify their currency reserves and enhance fiscal sovereignty.

As Ethiopia takes steps toward implementing the new policy, further bilateral deals are expected to follow with other regional and global trading partners.