The local currency, the birr, has been experiencing a long-standing decline in value against major international currencies, most notably the US dollar. However, the current state of affairs has reached unprecedented levels, with the exchange rate soaring to unparalleled heights. With the official rate currently hovering around 55 birr per dollar, the scarcity of hard currency has now driven the black-market value of a dollar to exceed 110 birr. This exorbitant premium of over 100% marks a significant occurrence in the nation’s economic history.

Ethiopia is among the countries globally grappling with a substantial decline in its currency’s value. Recent data from the Troubled Currencies Project, which tracks exchange rates in black and spot markets, reveals that the Ethiopian birr has depreciated by nearly 40% against the US dollar since January 2022.

“The economic mismanagement has destroyed the country,” Steve H. Hanke, a renowned professor of applied economics and director of the Troubled Currencies Project, tweeted a month ago.

Ethiopia has also been ranked 13th among countries with struggling currencies, according to the currency watchlist compiled by the Troubled Currencies Project. The project, initiated by the Cato Institute, a public policy research think tank based in Washington, highlights that several African countries, including Zimbabwe and South Sudan, are among the top ten nations where currency depreciation has occurred rapidly over the past year. During the period since January 2022, the Zimbabwean dollar experienced a staggering 95% depreciation against the USD, while the South Sudanese pound depreciated by 55%.