The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Ethiopia offers scant hope of financial liberalization

Despite a new prime minister and growing economic pressures, Ethiopia seems unlikely to seize the opportunity to open up its financial sector and lure more foreign investment.

By William Davison

Ethiopia-infrastructure-Chinese-R-780

A Chinese contractor and local labourers work at a metro-line station in Ethiopia's capital Addis Ababa



When members of Ethiopia’s banking and business community gathered in the glitzy Sheraton Addis for an audience with the reform-minded new prime minister, Abiy Ahmed, in the middle of April, any hopes for an opening up of the financial sector were dashed: they were told there would be no liberalization of the banking sector, which bars foreign ownership, according to Reuters.

The president, who has a mainly ceremonial role, reiterated Abiy’s message a week later, while Abiy’s predecessor, Hailemariam Desalegn, who did offer some fresh thinking, then corroborated the new prime minister’s message further in an interview with Bloomberg.

Ethiopia’s economy has expanded at an enviable clip; growth was estimated at 10.9% in the 2016/17 financial year, and averaged just over 10% a year from 2005/06 to 2015/16, according to the World Bank, compared to a regional average of 5.4%. But much of that dynamism has been in the public sector. Domestic and foreign state-owned banks, often Chinese, have funded transport links and power plants, while multilateral lenders have sunk cash into education, health, water and agriculture.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree