According to a senior official from Ethiopia’s central bank, the government plans to grant up to five bank licenses to overseas investors over the next five years as part of attempts to open up the country’s financial services sector to global competition.
Prime Minister Abiy Ahmed’s government has committed to liberalizing sectors formerly controlled by state-owned firms in order to attract more foreign investment and improve economic growth.
The central bank’s vice governor Solomon Desta said that three to five licenses would be given during the next five years.
The Commercial Bank of Ethiopia, which is majority-owned by the government, competes with 28 other banks around the nation, all of which are privately held.
According to Desta, foreign investors will be able to enter the industry via a number of methods, such as establishing local subsidiaries or forming joint ventures with existing enterprises.
Foreign investors have long been interested in the banking, telecommunications, transportation, and aviation sectors in Ethiopia, a country with over 100 million people and one of the biggest economies in Sub-Saharan Africa.
Ethiopia’s government ended the monopoly of state-owned Ethio Telecom in the telecommunications market two years ago by licensing a private operator.
The operator, a consortium that included Kenya’s Safaricom, Vodafone of the United Kingdom, and Sumitomo of Japan, paid $850 million for the license to operate.
Furthermore, Ethiopia has issued a third telecommunications license and launched a bidding process to sell a 45% stake in Ethio Telecom.
