The Central Bank Governor Says the War in the North Was Not a Major Concern

Ethiopia's central bank governor has played down the economic weight of the renewed war in the north, telling Addis Fortune that the conflict required "a cautious response" but had not been "a major concern" for him.

What he said

Eyob Tekalegn (PhD) described the federal response to the September escalation as "a very effective, quick, swift operation." Hostilities resumed in September 2026, nearly four years after the civil war that began in November 2020 was brought to a close. On 23 September 2026, forces under the TDF took the civilian airports at Meqelle, Axum and Shire; the federal army and its regional allies, the TPF, answered with counteroffensives.

The governor pointed instead at the borders. He identified relations with neighbouring countries, and Eritrea in particular, as the risk still outstanding.

The gap with the Fund

The assessment sits awkwardly beside the one the IMF gave Addis Fortune this week, which called Ethiopia's conflicts an alarming risk to the economy and to the reform programme, and said staff were assessing any impact on the 3.4-billion-dollar arrangement. Both statements can be true at once — a central bank measures what has already moved through reserves, the exchange rate and the payments system, while a programme assessment is about a forward fiscal path — but they will not be read that way by anyone pricing Ethiopian risk.

For a borrower or an importer, the governor's framing is the more immediately consequential of the two. It signals that the National Bank does not currently see the conflict as grounds to change course on the managed float, on reserve policy, or on the pace at which it has been letting the birr find its level.

Open

The governor did not quantify anything: no estimate of the conflict's cost to output, no revenue figure for the affected regions, no reserve impact. He did not say what a deterioration in relations with Eritrea would mean for monetary policy, nor at what point the northern conflict would become a major concern. The National Bank has not published a regional breakdown of banking activity since the September escalation.

Sources: Addis Fortune, 21 October 2026