Ethiopia is the latest government initiative to promote investment in one of Africa’s major economies, and it intends to enable foreign banks to acquire up to 30% of its commercial banks.
The amount of shares that foreigners may purchase is stated in an Ethiopian cabinet draught that was circulated to local banks on October 5 and seen by Bloomberg News.
It follows the government’s announcement last month that it will loosen limitations on bank ownership, following Prime Minister Abiy Ahmed’s promise to open up the economy to foreign investors when he assumed office in 2018.
Ethiopia needs foreign investment to speed up the country’s slowing economy caused by the civil war in the north. The International Monetary Fund anticipates a 3.8% reduction in GDP growth this year.
Additionally, the nation is dealing with a severe foreign currency shortage and rising consumer prices.
117 million people are served by Ethiopia’s 25 commercial banks, according to World Bank statistics.
According to its website, the Commercial Bank of Ethiopia, one of two state-owned banks, holds assets totaling 485, 7 billion birr ($17. 6 billion) and caters to the needs of 15. 9 million clients.
Ethiopia might consent to foreign banks owning 30% of local banks.
About Author
