The National Bank of Ethiopia (NBE) has issued Directive No. FVD/01/2026 on Imports on Franco Valuta, which entered into force on 29 May 2026. The Directive establishes, for the first time, a comprehensive and standalone regulatory framework governing Franco Valuta transactions in Ethiopia. Franco Valuta refers to the importation of goods for which no foreign exchange from the domestic banking system is required. Prior to the issuance of this Directive, such transactions were governed by a single sub-article of the broader Foreign Exchange Directive No. FXD/01/2024, an arrangement which the NBE has now considered inadequate to address the scale, complexity and risks associated with such transactions. The Directive appears to be moti vated by three principal considerations: the strategic value of Franco Valuta arrangements in facilitating trade and investment without drawing on national foreign exchange reserves; the risks of misuse, misreporting and illicit financial flows arising under the previous fragmented framework; and the need for greater transparency, institutional accountability and technology-enabled monitoring.
Key Changes
- Expanded and Codified List of Eligible Users
The Directive expressly identifies the categories of persons and entities that may utilise Franco Valuta arrangements. Eligible categories now formally include licensed domestic investors, diaspora investors, foreign investors, manufacturing and industrial enterprises, development projects of strategic importance, religious and government institutions receiving grants, diplomatic missions and international NGOs. This codification enhances legal certainty and removes the ambiguity that previously existed as to eligibility. - Separate Regimes for Investment and Trading Use
The Directive draws a clear distinction between investment and manufacturing use (Article 6) and trading and commercial use (Article 7). Investment and manufacturing use covers capital goods, machinery, spare parts, raw materials, technology equipment, energy and infrastructure goods, trade fair items and other goods approved by the NBE. Trading and commercial use covers wholesale and retail goods imported by FDI and diaspora traders, imports into special economic zones and free trade zones, and permanent or temporary re-export arrangements. - Formalised Documentation Requirements
Article 9 now requires a specific set of documents for Franco Valuta authorisation, namely: a pro forma or commercial invoice; shipping documents (bill of lading, air waybill or equivalent); and an investment or trade licence, subject to the exemptions applicable to embassies, NGOs and certain other entities. The annex to the Directive further specifies, for each of 24 categories of goods, the permitted FOB value in US dollars and the supporting documents required. - Mandatory Digital Recording
Article 10 introduces a digital control requirement. The Ethiopian Customs Commission is now required to use, or integrate with, the Foreign Exchange Monitoring and Orchestration Unified System to record and report all Franco Valuta imports. This marks a significant shift away from manual or paper-based oversight towards a real-time, technology-driven compliance framework. - Strengthened Enforcement and Penalties
Article 11 identifies three categories of contravention: misuse of Franco Valuta arrangements, false declarations, and the circumvention or avoidance of applicable controls. Consequences under Article 12 may be imposed cumulatively and include monetary penalties, confiscation of goods and criminal liability under NBE Proclama tion No. 1359/2025. The availability of criminal sanctions indicates that the NBE regards compliance with this framework as a matter of significant regulatory importance.
