- The Ethiopian government plans to grant up to five bank licenses to foreign investors in the next five years.
- Prime Minister Abiy Ahmed’s administration aims to attract foreign investment by liberalizing previously state-dominated markets, including the financial services industry.
- Ethiopia offers entry possibilities such as creating local subsidiaries or partnering with existing domestic firms in the banking sector.
According to an Ethiopian senior central bank official, Ethiopia would grant up to five bank licenses to foreign investors over the course of the following five years as part of efforts to allow international competition in the financial services industry.
To encourage foreign investment and economic progress, the administration of Prime Minister Abiy Ahmed has committed to liberalizing markets previously monopolized by state-owned enterprises.
The Vice Governor of the country’s Central Bank stated; “we will give three to five licenses within five years.” Commercial Banks in Ethiopia, are majorly state-owned institutions, which dominate Ethiopia’s banking system, including 29 domestically owned participants.
According to Desta, international investors would have a variety of entry possibilities, such as creating local subsidiaries or joining up with existing domestic firms.
Ethiopia, a nation of more than 100 million people and one of the largest economies in Sub-Saharan Africa has long attracted the attention of foreign investors who are interested in the banking, telecom, transportation, and aviation sectors. To end the monopoly of state-owned Ethio Telecom in that industry, Ethiopia’s government awarded a private operator a telecommunications license two years ago.
The operator, a consortium led by Kenya’s Safaricom SCOM.NR, Vodafone VOD.L, and Japan’s Sumitomo 8053.T paid $850 million for the license. Along with issuing a third telecoms license, Ethiopia has also started a bidding procedure to sell a 45% interest in Ethio Telecom.
Ethiopia has long been keen on rejuvenating its banking sector, and the country’s move toward a more liberal economy after decades of central economic planning has been glaring. Political think tanks have argued that the changes implemented by Ethiopia’s prime leader, Abiy Ahmed, since assuming a leadership position in 2018 will unleash enormous wealth for the continent’s second-most populated nation. That was before the civil conflict in Tigray dominated the news.
In December 2020, Ethiopia invited telecom companies to bid for two licenses to compete against Ethio Telecom, the state-owned carrier
