Ethiopia's New Disaster Fund: 17 Levies Across Key Sectors

Ethiopia has enacted a sweeping framework to finance its Disaster Risk Response Fund, drawing contributions from banks, insurers, telecom operators, transport services, fuel suppliers, and government budgets, according to Federal Negarit Gazette No. 2 published on November 11, 2025. The regulation establishes mandatory contribution rates across 17 revenue streams, signaling a shift toward a more institutionalized, rules-based approach to disaster financing as climate shocks, droughts, and floods place growing pressure on public resources. A Multi-Sector Funding Model Under the new schedule, financial institutions, service providers, and public bodies are required to collect and remit fixed fees or percentage-based contributions—mostly on a monthly basis—into the national disaster fund. Key provisions include: Banks and microfinance institutions must contribute 1% of the value of loans issued, remitted monthly. Insurance companies are required to transfer 1% of collected premiums, aligning the sector with broader risk-pooling responsibilities. Digital banking services will attract a 5% levy on service fees, paid by banks offering the services. Telecommunications services, including voice and data airtime sold by Ethio Telecom and Safaricom Ethiopia, will be subject to a 5% charge on airtime revenues. Transport and mobility-related activities are also targeted. Domestic airline ticket sales will incur a flat ETB 100 per ticket, while marine transport and logistics services will contribute 5% of annual sales. Consumer-Facing Services Included Several everyday public services are incorporated into the funding base: Passport and visa issuance or renewal will carry a fixed ETB 200 contribution per document. Commercial license issuance and renewals will also be charged ETB 200 per transaction. Document authentication and registration services will face a 5% levy on service fees. Fuel consumption is directly linked to disaster financing, with the Ethiopian Petroleum Supply Enterprise required to collect ETB 1 per liter of fuel supplied, remitted monthly. Excise-Style Levies and Enforcement Revenue The framework further introduces earmarked contributions from selected goods and enforcement activities: Tobacco and alcohol products, whether locally produced or imported, will be charged 5% of monthly sales or import value. Chemical manufacturers and importers must contribute 1% of sales or import value. Federal Customs Commission will channel 60% of proceeds from the sale of seized contraband goods into the fund, with transfers made twice yearly. Lottery ticket sales and prize distributions are also included, with a 1% contribution applied to ticket prices and prize values. Budgetary Contributions from Government In addition to sectoral levies, the regulation mandates direct fiscal transfers: The Ministry of Finance will allocate 0.25% of the federal government’s annual budget, paid quarterly. Addis Ababa and Dire Dawa city administrations are similarly required to contribute 0.25% of their annual budgets on a quarterly basis. Institutionalizing Disaster Financing Most collections are due monthly within the following month, creating a steady inflow of resources rather than ad hoc emergency mobilization. Officials frame the approach as a move toward predictability and shared responsibility, embedding disaster preparedness into routine economic activity. While the regulation significantly broadens the funding base, it also raises questions about cost pass-through to consumers, administrative capacity for enforcement, and the cumulative burden on heavily regulated sectors such as finance, telecoms, and transport. Still, by anchoring disaster risk financing in law, Ethiopia is positioning its response system to rely less on emergency appeals and external aid, and more on domestically generated, rule-bound resources.