The bill, approved by the Ethiopian cabinet but which still needs to be approved by the country’s parliament, says that “a foreign bank which is well established, reputable, and financially sound may be allowed to establish a partially or fully owned foreign bank subsidiary, or open a foreign bank branch, or a representative office, or acquire shares of a bank.” The bill notes, however, that the board of directors of foreign banks operating in the country must include resident Ethiopians. Ethiopia has been making efforts to liberalise its banking sector – as well as other critical industries such as telecommunications – in the hope of generating increased competition in a sector that has long been dominated by state-owned entities. All 29 banks currently operating in Ethiopia are locally owned and many under the direct control of the state.
Ethiopia Plans to Allow Foreign Banks to Set Up Local Subsidiaries
