Foreign Banks’ Entry Would Boost Ethiopia’s Economic Growth, Competitiveness

Addis Ababa December 18/2024 (ENA) —Allowing foreign banks into Ethiopia’s financial sector will be instrumental to sustaining economic growth and competitiveness of the country by ensuring a stable financial system, National Bank of Ethiopia Governor Mamo Mihretu said.

The House Peoples Representatives (HPR) has approved a new and historic banking proclamation that allows foreign banks entry into Ethiopia’s financial sector.

Over the past five years, the government of Ethiopia has undertaken significant economic reforms to open up the nation’s economy. Opening up of the financial sector is part of the comprehensive reform.

In his briefing to questions raised by members of the HPR during the approval of the new bill, National Bank of Ethiopia Governor Mamo Mihretu noted that having a stable financial system is crucial to sustainability of the country’s economy.

 

Allowing foreign banks into Ethiopia’s financial sector will be instrumental to sustaining economic growth of the country by ensuring a stable financial system, he said.

This move is beneficial to ensure competitiveness and stability, he said, adding approving the proclamation is part of the implementation process of the government’s policy decision made recently as part of the financial sector reform.

Stating that the preparation to reach the approval stage took three years, Mamo said all necessary preparations have been done with much detail to allow foreign banks in the Ethiopian market by taking other countries’ best experiences.

For the governor, the main target of allowing foreign banks in Ethiopia’s financial sector is to enhance competitiveness and productivity of Ethiopia’s banking sector and enhance its role for sustainable economic growth of the country, he noted. 

Allowing foreign banks entry in Ethiopia is believed to ensure a competitive, stable banking system, bringing new capital, advanced technology and innovative products to Ethiopia’s financial sector, it was learned.

Similarly, the house also approved the revised proclamation of the National Bank of Ethiopia with the target to play a crucial role to sustain the economic growth of the country, and to support the homegrown economic reform.

Presenting the final bill to the HPR, Planning, Budget and Financial Affairs Standing Committee, Chair Desalegn Wodaje said the revised bill would be instrumental to enhancing productivity, supporting the country’s economic growth, enhancing investment and saving, and to support the homegrown economic reform in a meaningful manner.

The revised proclamation of NBE is said to be creating market stability, a healthy financial system and supporting the comprehensive economic growth of the country. 

Over the past six years, various sectors and sub-sectors have been opened up for domestic and foreign investment to make Ethiopia a business friendly nation alongside implementing plenty of legal and administrative reforms during the stated period.