Ethiopia’s Central Bank launches crackdown on illegal money transfers

The National Bank of Ethiopia (NBE) has launched a coordinated crackdown on unlicensed money transfer operators, escalating its effort to pull billions of dollars in remittance flows back into the formal banking system.

The action, which began in October, comes as new central bank governor Eyob Tekalign moves to stabilise a volatile currency and curb underground money movement. The NBE confirmed it is pursuing legal cases against dealers and fund providers who use local networks to channel money abroad without approval.

“The National Bank will take strong enforcement measures against those who continue to conduct money transfer activities illegally,” Tekalign said. “Such actions undermine the integrity of the financial system and the country’s broader economic stability.”

The scale of the problem

Remittances remain one of Ethiopia’s most important sources of foreign exchange, but a large share flows through informal systems such as hawala.

Data from the International Organisation for Migration (IOM) shows nearly 78% of cross-border transfers still happen outside regulated channels. That leakage costs the country millions of dollars in foreign-currency inflows every year.

The NBE says it has already started identifying unlicensed players through tighter monitoring and collaboration with law enforcement agencies.

What the bank is doing

The central bank’s new measures include publishing a public list of licensed operators, found on nbe.gov.et/mta, and warning citizens that funds sent through unregistered firms may be lost or seized. The move follows a series of bans earlier this year on four U.S.-based transfer companies accused of operating without licences.

At the same time, the bank is pushing to make formal remittance channels more accessible. Officials say they want users to have faster, cheaper ways to send money home while keeping transactions within the regulatory net.

The context behind the crackdown

Tekalign took office in September after Prime Minister Abiy Ahmed reshuffled the central bank’s leadership during one of Ethiopia’s toughest financial periods. Inflation is running in double digits, the birr has shed more than 120% of its value over the past year, and dollar shortages continue to choke importers.

The governor, a former state minister at the Ministry of Finance, is part of Abiy’s reform-minded economic team and helped design the government’s Home-Grown Economic Reform programme. His early moves suggest a preference for tighter regulation and greater currency discipline.

Why it matters

By choking off unlicensed transfers, the NBE is trying to pull hard-currency flows into banks, strengthen foreign-exchange reserves, and restore trust in the birr.

Analysts say the success of this effort will hinge on whether formal operators can compete with the convenience and exchange rates of the underground networks.

The push mirrors efforts in Nigeria, Kenya, and Ghana, where central banks are tightening rules on diaspora inflows to shore up reserves and combat money laundering.

For now, Ethiopia’s message is clear: unregistered money transfers are out, and the era of informal remittance networks is running out of road.