The important caveat is coming just months after the Ethiopian Government announced that it had constituted a liberalisation committee whose job it is to establish the modalities that would guide the liberalisation process.
The implication, therefore, is that we might be seeing some mergers and acquisitions in the Ethiopian banking sector anytime soon.
Business Insider Africa reported earlier that the Ethiopian banking sector liberalisation committee has begun working towards replacing the country’s decades-old financial services code with a new one.
The primary aim of the new financial services code is to end Ethiopia’s restrictive banking policy which has, up till now, prevented foreign banks from investing and setting up shops in the country.
The first draft of the new code is expected to be ready by December 2022. It will, among other things, stipulate the modalities for foreign banks to operate in Ethiopia.
Recall that Prime Minister Abiy Ahmed was the first to disclose Ethiopia’s ongoing plan to open its banking sector to foreign banks. Last month, he declared that “we will bring foreign banks because we need additional wealth and hard currency. Regarding this, the government is now preparing a policy amendment. Once preconditions are met and banks are prepared, we will (implement) that.”
The banking reforms in Ethiopia presents an opportunity for some of Africa’s biggest banks to position themselves in the Horn of Africa country.