Ethiopia’s council of ministers on Friday approved a law that allows foreign banks to operate in the east African country.
The decision comes nearly two years after Prime Minister Abiy Ahmed’s cabinet adopted a policy to open the banking sector to foreign investors.
The law was approved together with a revised draft proclamation allowing the amendment of the National Bank of Ethiopia (NBE) and other resolutions.
Ethiopia’s banking industry is dominated by state-owned Commercial Bank of Ethiopia, and the sector has 32 players in total, all of them locally owned.
The National Bank of Ethiopia recently announced that it has finalized preparations to issue up to five banking licenses to foreign investors in the next five years.
In a statement on Friday, the PM’s office said the draft law was prepared in response to the recent economic and technological development of the global financial industry, in addition to the policy change.
“The draft law allows establishing legal framework and control mechanisms to issue banking licenses to foreign investors and administer its process,” the PM Office added.
The council eventually voted unanimously to endorse the draft law and referred it to the parliament for ratification.
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