The Ethiopian House of Peoples’ Representatives (HoPR), the lower chamber of parliament, has passed a significant bill permitting foreign banks to operate within the country. This development, which took place during the HoPR’s regular session on Tuesday, marks a pivotal move towards liberalizing Ethiopia’s banking sector, according to state-affiliated Fana Broadcasting Corporate.
The newly adopted Banking Business Proclamation, passed with a majority vote, is aligned with the Ethiopian government’s ongoing policy decisions to open up the financial sector to foreign investment. This change is expected to attract foreign banks and investors, bringing essential capital into the East African nation’s economy.
Mamo Mihretu, governor of the National Bank of Ethiopia (NBE), expressed confidence that the proclamation would help stabilize the Ethiopian economy. He highlighted that the bill clearly outlines the NBE’s core objectives, including ensuring price stability and fostering a robust financial system.
Historically, Ethiopia’s banking sector has been closed to foreign entities. However, since taking office in 2018, Prime Minister Abiy Ahmed has consistently championed the liberalization of the financial sector as part of broader economic reforms aimed at attracting foreign investment and driving economic development. This legislative milestone reflects the government’s commitment to these reforms.
