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In a landmark policy shift aimed at deepening financial sector reform and attracting foreign capital, the National Bank of Ethiopia (NBE) has officially opened the country’s banking sector to foreign investors.
According to a statement issued by the central bank on Wednesday, international banks and financial institutions can now formally submit license applications to operate within Ethiopia.
“The National Bank of Ethiopia is pleased to announce that the Ethiopian banking sector is now open to foreign participation. Applications from international banks and investors are welcome from today,” the NBE declared.
This policy move follows the enactment of a long-anticipated banking liberalisation law in December 2024. The legislation enables foreign banks and investors to establish subsidiaries, branches, or representative offices, and to acquire equity stakes in domestic banks—marking the first time in Ethiopia’s history that its heavily regulated financial sector has been opened to external stakeholders.
While detailed licensing guidelines and compliance requirements are yet to be published, the NBE assured that the regulatory framework will prioritise transparency, financial stability, and alignment with national economic objectives.
The reform is part of a broader push under Ethiopia’s economic liberalisation agenda, which seeks to modernise its financial infrastructure and bolster economic growth by increasing competition and innovation in the banking sector.
For pan-African banks, particularly those in Nigeria pursuing regional expansion, the announcement represents a timely opportunity. Nigerian banking giants such as Access Bank and FirstBank, both of which have made strategic moves to extend their footprint across East and Southern Africa, may now explore market entry into Ethiopia—Africa’s second most populous nation with a largely underbanked population.
The policy shift is expected to drive cross-border investments, promote technology transfer, and enhance financial inclusion by leveraging foreign banks’ expertise, digital capabilities, and capital strength.
As Ethiopia accelerates its transition toward a more open and competitive financial ecosystem, the development is being closely watched by regulators, investors, and banking groups across the continent—heralding a new era for East Africa’s financial services industry.
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