Ethiopia Legal interest / interest for default
Ethiopia Legal interest / interest for default is 9 percent, in force since 11 Sep 1960. Last checked against the official source on 11 Aug 2026.
Ethiopia's legal interest: a fixed 9% per annum under Article 1751 of the Civil Code 1960, applying wherever interest is due and no rate has been fixed, and payable by Article 1803 as interest for default on an overdue money debt.
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| Current value | 9 percent |
|---|---|
| In force from | 1960-09-11 |
| Official source | Civil Code of the Empire of Ethiopia, Proclamation No. 165 of 1960 (Negarit Gazeta, Gazette Extraordinary, 19th Year No. 2, 5 May 1960; in force 11 September 1960), Art. 1751 - Legal interest: 'The rate of interest shall be of nine per cent per annum where interest is due and the rate has not been fixed'; Art. 1803(1) - Money debts, Interest for default: 'Where the debtor owes a money debt and he is in default, he shall pay interest for default at the rate fixed by law (Art. 1751) notwithstanding that the contract fixes a lower rate in respect of interest to be paid before the debt is due'; Art. 1803(2): 'Where a higher rate of interest is fixed in the contract, such interest shall be due in lieu of interest under sub-art. (1)'; Art. 1803(3): 'Interest shall be due notwithstanding that no loss is incurred by the creditor'; Art. 1752 - Appropriation of payments: 'any part payment made by him shall be appropriated firstly to the costs, secondly to the interest and eventually to the principal'. Full scanned text of the promulgated Code hosted in WIPO Lex, the World Intellectual Property Organization's database of national legislation (record ET020, Ethiopia). |
| Last verified | 2026-08-11 |
| Verification | primary — No verification limitation recorded — read from the official source cited. Cited to a facsimile of the promulgated Civil Code itself (the printed text of Proclamation No. 165 of 1960), served from WIPO Lex, the legislation database of WIPO, a United Nations specialised agency - not to any commentary or summary. Two disclosures. (1) No Ethiopian government publication of the 1960 Civil Code is reachable online: there is no Negarit Gazeta back-file covering 1960 (the Federal Negarit Gazeta portal begins in 1995), moj.gov.et returned HTTP 503, hopr.gov.et timed out, and no ministry or judiciary site serves the code text (checked 11 August 2026). (2) The WIPO Lex record states that its copy is reproduced from the University of Minnesota Human Rights Library rather than notified by Ethiopia; the file is nevertheless a page-image scan of the printed Code, carrying its original 'CIVIL CODE' running heads and page numbering, and Arts. 1751, 1752, 1803 and 1804 were read directly from it. The previous citation - chilot.wordpress.com, a personal blog - has been replaced. |
| Provenance | source fingerprint |
What this value means
Fixed 9% per annum since the Civil Code came into force in 1960 — no reference rate, no periodic setter, and one rate for civil and commercial money debts alike, the Civil Code's general law of contract supplying the rule that the Commercial Code does not. HOW IT WORKS: Art. 1751 fixes the rate wherever interest is due and none has been agreed. Art. 1803(1) makes that rate the interest for DEFAULT on an overdue money debt, and does so 'notwithstanding that the contract fixes a lower rate in respect of interest to be paid before the debt is due' — a low pre-maturity rate does not cap the default rate; the 9% takes over. Art. 1803(2) is the mirror image: where the contract fixes a HIGHER rate, that higher rate is due instead of the 9%. Art. 1803(3) removes any need for the creditor to prove loss. Art. 1805 allows FULL compensation beyond the default interest where the debtor knew the circumstances that would cause greater harm, or acted with gross negligence or intent. Art. 1804 governs interest on interest. Art. 1752 fixes the order of appropriation of a part payment: costs first, then interest, and only then principal — so partial payments do not reduce the interest-bearing principal until costs and accrued interest are cleared. CEILING ON AGREED INTEREST: the Civil Code caps conventional interest on a loan of money at TWELVE per cent per annum, and the Federal Supreme Court Cassation Division has treated lending above the official rate as usury — so the Art. 1803(2) 'higher contractual rate' route runs into a 12% wall for ordinary lenders. Interest on a money loan must in any case be expressly agreed; it is not implied. BANKS AND LICENSED LENDERS ARE A SEPARATE REGIME: the National Bank of Ethiopia sets official and applicable interest rates by directive under the National Bank of Ethiopia Establishment (as amended) Proclamation No. 591/2008, and bank lending is priced under those directives rather than by Art. 1751 — do not apply the 9% or the 12% ceiling to a licensed bank's facility.
Get it programmatically
curl https://afriref.dev/v1/et/statutory-interest
# $0.005 per call — x402 on Base (USDC). No key, no signup.
# History: curl https://afriref.dev/v1/et/statutory-interest/history?from=2020-01-01
# Provenance: curl https://afriref.dev/provenance/et/statutory-interestOther Ethiopia series: NBE National Bank Rate (policy rate) · VAT standard rate · VAT registration threshold · National minimum wage (none in force) · Public holidays · CPI inflation (year-on-year) · Corporate income tax rate · Withholding tax rates · Personal income tax brackets · Statutory social-insurance contributions
The same figure elsewhere: Gabon · Ghana · Kenya · Lesotho · Mali · all 34