Ethiopia Faces Uncertainty as Governor Mamo Mihretu Stepped Down, Leaving Ethiopia’s Reform Efforts in Limbo

From Addis Ababa: when Mamo Mihretu took the helm of Ethiopia’s central bank in early 2023, he was cast as the technocrat who would steady the country’s fragile economy and steer it through the most ambitious reforms in decades. Just over two years later, his abrupt resignation has reopened questions about the direction of those reforms, the durability of IMF-backed programs and the political will behind Ethiopia’s economic transformation.

Mamo, who had previously served in senior economic advisory and policy roles, announced his departure on September 3, 2025, via social media, writing that his seven years of public service had “run their course.” He added that the vision of building “a modern central bank… fit for purpose” was within reach but offered no indication of his next move.

His resignation comes at a delicate moment. Ethiopia, Africa’s second-most populous country, is grappling with soaring inflation, foreign currency shortages, and a heavy debt burden exacerbated by conflict, drought, and global price shocks. The central bank’s credibility had been seen as pivotal in restoring investor confidence, stabilizing the currency, and unlocking billions of dollars in concessional loans under an IMF-led reform agenda.

Seen as an unfinished project to many Ethiopians, Mamo’s departure feels like the loss of a steady hand at a time of turbulence. He had been central to efforts to modernize monetary policy, strengthen financial supervision and push toward a more market-driven exchange rate. Reforms that are seen as prerequisites for international assistance.

By senior Addis Ababa-based economist – “His leadership gave hope that the central bank could become more independent, more data-driven, and more transparent. Now, with him gone, there is uncertainty about whether those reforms will stall or even reverse.”

Critics, however, argue that Mamo’s tenure fell short of expectations. Inflation remained stubbornly high, eroding household purchasing power. Banks continued to face liquidity challenges, while exporters struggled under currency distortions. Ordinary Ethiopians, already battered by food and fuel price hikes, saw little relief from policies that were often framed in technocratic terms.

Mamo’s resignation also carries political undercurrents. The central bank sits at the intersection of government policy, market pressures, and social expectations. Analysts note that Ethiopia’s ruling Prosperity Party has struggled to balance the urgency of reform with the political risks of austerity measures.

In a spree of opinionated-scrutiny, Meron Tesfaye, a political analyst in Addis Ababa said – “The government wants to show commitment to reform for international partners, but it also fears the social backlash of rising prices and subsidy cuts. Mamo was in the middle of that tug-of-war. His exit could reflect deeper tensions within the leadership over how far and how fast to go.”

The IMF, which has been negotiating a multi-billion-dollar program with Ethiopia, has so far refrained from comment. But Mamo’s absence may complicate discussions. International creditors had viewed him as a trusted counterpart, able to bridge the gap between Ethiopia’s political leadership and the technical demands of global finance.

In view of human overheads and social strains: ordinary Ethiopians, the larger question is less about IMF frameworks and more about daily survival. In Merkato, Addis Ababa’s sprawling commercial district, shopkeepers say the cost of imported goods has doubled in two years. Farmers complain that fertilizer is increasingly unaffordable, while urban families are cutting back on meals.

“Every day we hear about reforms, but our lives only get harder. If the governor cannot fix it, who will?”– said Selamawit, a mother of three who sells vegetables in the capital.

Mamo himself struck a personal note in his farewell. “It has been an honor to serve,” he wrote, adding that he hoped to have contributed to the foundations of a stronger financial system. For some, his words captured both the ambition and the incompleteness of Ethiopia’s economic experiment.

The government has yet to announce a successor, leaving markets jittery. Whoever takes the job will face an unenviable challenge: defending the currency, containing inflation, reassuring creditors, sustaining exchange rate, etc. Perhaps most critically, convincing Ethiopians that reforms will eventually deliver tangible benefits.

Ethiopia’s reform drive was always going to be a marathon rather than a sprint. With Mamo’s departure, the path forward looks more uncertain. The question now is whether his exit will mark a pause, a pivot, or a retreat from the economic transformation he helped set in motion.