Informal revenue generation methods are often considered an important source of funding for public services, particularly in contexts where states’ formal fiscal mechanisms are weak or fail to reach certain populations.
One such method is informal taxation, which can play a developmental role. But informal revenue generation also includes more coercive practices that serve private rather than public interests.
In recent years, Ethiopia has witnessed a significant rise in one particularly harmful extra-legal practice: roadblock taxation. These levies, locally known in Amharic as “Ye Kote Kifya”, are not linked to the provision of public services. Instead, they function as extractive transit fees primarily imposed by lower-level state actors on the movement of goods.
But what does the spread of roadblocks taxation reveal about state authority, conflict and economic governance in Ethiopia?
How roadblock taxes in Ethiopia are enforced in practice
Illegal checkpoints are in the hundreds
Across Ethiopia’s regional states, transporters of goods are routinely required to pay fees when passing through towns. These collections are typically enforced by municipal and revenue officers, sometimes backed by local militias.
Drivers transporting agricultural products and construction materials, such as cereals and cement, frequently encounter multiple checkpoints. Even the Addis Ababa–Djibouti corridor, the lifeline of Ethiopia’s economy that handles over 95% of import-export trade, is not exempt.
The territorial spread and density of these checkpoints are striking. With checkpoint runs possibly reaching the hundreds, according to federal officials, roadblock taxes have been reported in nearly all regional states of Ethiopia, including Afar, Amhara, and Oromia. In fact. Kassahun Gofe, Ethiopia’s Minister of Trade and Regional Integration, indicated that a study covering just 40% of the country identified 290 illegal checkpoints.
An example of this density was shared by the Facebook group “Ye Shuferoch Andebet” (Voice of the Drivers). In November 2025, the group reported that drivers transporting cement from the Lemi National Cement Factory to Dessie City paid taxes at 12 separate checkpoints along a route of just 300 kilometers. By international comparison, these figures place Ethiopia alongside fragile states like South Sudan in terms of checkpoint density.
Checkpoint levies are set arbitrarily
The assessment of these roadblock taxes is highly arbitrary, with no standardised system or transparent basis. Drivers are required to pay lump-sum amounts that vary widely from one checkpoint to another. For instance, drivers along the Djibouti–Addis Ababa corridor report paying at least ten separate roadblock levies, ranging from 600 to 2,000 Ethiopian Birr.
Compliance is then enforced through physical barriers and intimidation. Local officials and militia often resort to stretching ropes across roads or using hand signals to stop drivers. While these checkpoints are usually located at town entrances, some are placed deep in rural areas and attempts to bypass them can result in fines, arrests, or physical assaults.
Why roadblock taxation lacks a legal basis
Under Ethiopian laws, local administrations, such as municipalities, are permitted to levy fees for specific local services, such as loading and unloading activities, and road use within municipal boundaries. However, they do not have the legal authority to impose fees over inter-town, inter-regional, or federal roads. As a result, roadblock taxes collected along these transit routes lack a legal basis.
Despite this, local officials often attempt to create an appearance of legality by issuing receipts bearing the names of regional finance bureaus or town administrations.
Senior federal and regional officials have repeatedly acknowledged that roadblock taxation is illegal and have instructed lower-level authorities to halt these practices. Yet, such instructions have had limited and short-lived impact. In reality, checkpoints are often dismantled for a short time, only to be re-established thereafter.
The proliferation of roadblock taxes is closely linked to conflicts, weakened state authority and control. The rise of internal armed conflicts, particularly in Amhara and Oromia, has created a security vacuum and weakened hierarchical accountability between federal and regional authorities and local administrations. In this context, local officials and militia have used these checkpoints as sources of personal financial gain.
Economic, fiscal and political effects
Roadblock taxation has both immediate and long-term consequences for Ethiopia’s economy and governance.
Raises transportation and trade costs, ultimately passed on to consumers
One significant consequence of roadblock taxation is its direct impact on the cost structure of goods transported across affected routes. For example, wholesale traders incorporate the cumulative cost of transit fees into final prices. These fees are not absorbed by traders but ultimately borne by consumers through higher prices.
Act as trade barriers
Checkpoints slow the movement of goods, increase bureaucracy, and disrupt supply chains. This undermines major economic reforms, including Ethiopia’s efforts to accede to the World Trade Organization (WTO) and participate effectively in the African Continental Free Trade Area (AfCFTA).
Undermine Ethiopia’s tax reforms
Ongoing tax reforms aim to increase Ethiopia’s tax-to-GDP ratio, which remains amongst the lowest globally at 6.3%. By raising consumer prices and squeezing traders’ profit margins, these extra-legal levies may reduce the private sector’s capacity and willingness to comply with formal taxation. In turn, they can encourage tax evasion and weaken trust in the fiscal system.
Threaten political legitimacy and security
Failed attempts by higher authorities to permanently dismantle illegal checkpoints highlight weakened vertical control over local administrations. The financial incentives generated from roadblock taxes embolden local actors to ignore higher authorities. Melaku Alebel, Ethiopia’s Minister of Industry, has warned that these practices could even encourage ordinary citizens to establish their own checkpoints, paving the way for a “checkpoint economy” dominated by armed and predatory actors.
How roadblock taxation can influence research and policy decisions
Future analyses of Ethiopia’s economy and tax system should explicitly account for roadblock taxation and similar informal levies. More quantitative, data-driven research is needed to assess their scale, distribution, and impacts. At the policy level, policymakers must design economic and tax reforms with these extra-legal practices in mind if they are to succeed in strengthening Ethiopia’s fiscal and governance systems.
