The National Bank of Ethiopia has issued a new directive governing the import of goods through Franco Valuta arrangements, introducing a unified legal framework aimed at supporting trade and investment while protecting the country’s foreign exchange reserves.
The new legal framework, titled “Import on Franco Valuta Directive No. FVD/01/2026,” entered into force on May 29, 2026. The directive was issued under Articles 39 (5), 39 (6), and 53 (2) of the National Bank of Ethiopia Proclamation No. 1359/2025.
Under the directive, Franco Valuta refers to the importation of goods for which foreign exchange from the domestic banking system is not payable. In practice, this means that importers bring goods into Ethiopia using foreign currency obtained from sources outside the domestic banking system, rather than requesting foreign exchange from local banks.
The National Bank stated that Franco Valuta arrangements serve as an important mechanism for facilitating trade and investment without placing pressure on national foreign exchange reserves. However, it also noted that the previous absence of a comprehensive and modern regulatory framework had created risks of misuse, misreporting, illicit financial flows, circumvention of foreign exchange controls, and fragmented institutional oversight.
The directive applies to persons involved in permanent import, temporary import, and re-import transactions into Ethiopia. It also applies to government institutions importing machinery and other key inputs using alternative foreign currency sources.
Eligible users under the new framework include licensed domestic investors operating in economic zones, diaspora investors, foreign investors, manufacturing and industrial enterprises owned by foreign investors, FDI and diaspora traders, development projects of strategic importance, diplomatic corps, international organizations, regional and continental NGO institutions, religious institutions, government institutions, civic societies receiving grants, and owners of personal effects.
The directive allows Franco Valuta imports for investment and manufacturing-related purposes, including capital goods, machinery, spare parts and accessories, raw materials for manufacturing, technology equipment, software, industrial, agricultural and service inputs, and goods for renewable and non-renewable energy and infrastructure projects. It also covers donation goods, goods for sample or experimental purposes, temporary imports, replacement goods under warranty, trade fair and exhibition items, research-related items, and fuel for own consumption by embassies, international organizations, and foreign direct investors.
For trading and commercial use, the directive permits the importation of goods for wholesale or retail trade by FDI and diaspora traders engaged in domestic trading, in line with applicable trade laws and regulations. It also covers imports into special economic zones and free trade zones, permanent imports, temporary imports, re-exports, re-imports, and other commercial goods authorized by the National Bank or permitted by the Customs Commissioner under delegated authority.
The annex to the directive provides detailed procedures for different categories of imports. For example, individuals coming to reside in Ethiopia for the first time may import personal and household effects, excluding vehicles, provided the goods are not commercial in nature or quantity. Personal goods not exceeding USD 5,000 may be duty-free. Ethiopians and foreign nationals of Ethiopian origin permanently residing abroad and holding an investment license may import capital goods strictly related to their investment, raw materials necessary for pilot production within the approved quantity, and personal effects not exceeding an FOB value of USD 10,000.
The directive also provides specific limits for promotional goods, samples, and urgent imports. Promotional items bearing product logos, company names, or special identifiers may be imported where their FOB value does not exceed USD 5,000, while gifts or commercial samples not of a commercial quantity may be imported where their FOB value does not exceed USD 4,000. Medicines urgently required for health purposes may be imported as necessary in type and quantity with no FOB value limit.
Users of Franco Valuta, except those importing personal effects, are required to own and maintain valid licenses, submit all required documents to the Ethiopian Customs Commission, keep auditable records, and comply with all applicable laws. Investors and traders must submit mandatory documents including a proforma or commercial invoice, shipping documents such as a bill of lading, airway bill, truck manifest, railway bill or courier document, an investment or trade license where applicable, and other documents listed in the annex.
The directive further introduces a digital control mechanism. The Ethiopian Customs Commission is required to use or integrate with the Foreign Exchange Monitoring and Orchestration Unified System, known as FEMoUS, to record and report Franco Valuta imports. All transactions under the directive must be digitally recorded and traceable.
The directive identifies misuse of Franco Valuta, false declarations, and circumvention or avoidance of controls as violations. Any person who contravenes the directive may face monetary penalties, confiscation of goods, and criminal liability under the National Bank of Ethiopia Proclamation No. 1359/2025 and other applicable laws.
Source: National Bank of Ethiopia and Tikvah Ethiopia
