Ethiopia Opens Banking Sector to Foreign Players in Landmark Reform
Ethiopia’s parliament has approved a historic law allowing foreign banks to operate within its borders, marking a major step in the country’s economic reforms. The legislation allows foreign banks to establish subsidiaries, open branches in the country and acquire up to 40% ownership of local banks. It is part of the government’s efforts to attract more foreign investment to the Horn of Africa country. Since Prime Minister Abiy Ahmed came to power in 2018, Addis Ababa has gradually liberalized Ethiopia’s tightly controlled economy. However, challenges such as two years of civil war and the currency crunch have kept investors away. Although the banking law has overwhelming support in parliament, some opposition MPs have expressed concerns about the competitiveness of local banks. However, central bank governor Mamo Mihretu believes increased competition will boost the domestic banking sector.
source: east africa
