Money & costs
Ethiopia’s currency is the birr. It’s divided into 100 cents in 1, 5, 10, 25 and 50 cent coins, and there are 1, 5, 10, 50 and 100 birr notes. Despite a weekly auction determining exchange rates, the birr is one of Africa’s most stable currencies. At least that was still the case at the time of research, but there was much talk of devaluing the birr, which could lead to large fluctuations against hard currencies.
According to National Bank of Ethiopia regulations, all bills in Ethiopia must be paid in birr. But this isn’t enforced and Ethiopian Airlines, most major hotels, most travel agencies and even the Department of Immigration accept (and sometimes demand!) US currency.
One regulation that’s strictly enforced is the conversion of birr to US dollars or euros; this transaction can only be done for people holding onward air tickets from Ethiopia. This means people leaving overland must budget accordingly. There are black-market traders around the borders, but rates are poor and it’s risky.
Bigger branches of the Dashen Bank in Addis Ababa, Bahir Dar, Gonder and Mekele now have ATMs that accept international visa cards. The service is likely to expand to regional cities and even to other banks quite quickly. Note that Mastercard, Solo, Cirrus or Plus cards do not work in any ATM.
Unlike ten to fifteen years ago when almost all currency exchanges were conducted on a fairly open black market that gave significantly higher rates than the banks things have now tightened up drastically. The black market still exists, and most hotels will exchange US$ cash or Euros for you, but the rates are only about 10% more than that offered by the banks.
The black market is illegal; penalties range from hefty fines to imprisonment. If you do indulge, stick to the shops, and be wary of other places, particularly Merkato and the Piazza in Addis Ababa, where’s there’s a good chance of being swindled or robbed.
As with many African countries the US dollar is the preferred foreign currency in Ethiopia and although the euro is growing in popularity not all banks will accept it; therefore you should still pack a wedge of greenbacks. You’ll have no trouble exchanging US cash wherever there are forex facilities.
Although more banks in Ethiopia change cash than travellers cheques, you will usually end up getting slightly worse rates for cash.
Credit cards (Visa and MasterCard) are increasingly useful in Addis Ababa but remain completely useless (with the exception of some Ethiopian Airlines offices) outside it. The travel agencies, airline offices and major hotels that do accept cards typically ding you 3–5% extra for the privilege of plastic.
Cash advances are possible at a couple of branches of the Dashen Bank in the capital and in larger Historical Circuit cities. Only Addis Ababa’s Sheraton can give you US dollars instead of birr.