ADDIS ABABA — Ethiopia has officially opened its banking sector to foreign investors for the first time, marking a historic shift in the country’s tightly regulated financial landscape.
The National Bank of Ethiopia (NBE) released Directive SBB/94/2025 on Tuesday, setting out the regulatory framework for foreign investment in the banking industry. The long-anticipated move follows years of domestic debate and stakeholder consultation, and aligns with the recently ratified Banking Proclamation designed to liberalize the sector.
According to the directive, foreign entities—including international banks and strategic financial investors—will now be eligible to establish operations in Ethiopia through wholly owned subsidiaries, branch offices, or representative offices.
“The Ethiopian banking sector is now officially open to foreign participation,” the central bank said in a statement. Applications from eligible foreign institutions will be accepted starting immediately.
This reform marks a pivotal step in Ethiopia’s broader economic liberalization agenda under Prime Minister Abiy Ahmed’s administration, which has already introduced foreign competition into telecoms, logistics, and finance. Until now, Ethiopia remained one of the last major African economies to bar foreign banks from operating within its borders.
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