Ethiopia opens up banking sector to its diaspora

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ADDIS ABABA (Reuters) – Ethiopia’s parliament passed a bill on Wednesday to open up the country’s financial sector to an estimated five million of its citizens who have taken other nationalities, including allowing them to buy shares in local banks and start lending businesses.

The changes are part of a raft of economic reforms initiated by Prime Minister Abiy Ahmed when he came to power last year, partly aimed at boosting the country’s foreign exchange reserves, which had dropped precariously low.

“The law will enable the Ethiopian born diaspora to take part in the economic growth of the country,” said Lemlem Hadgo, chair of the Revenues, Budget and Finance Committee of parliament.

“It will also address the grievances raised over the issue.”

Ethiopia’s banking sector, which is closed to foreign investment and is still one of the most tightly state-controlled in Africa, is dominated by the two oldest and most profitable institutions, Awash Bank and Dashen.

Ethiopians who had emigrated abroad but returned to live in the capital Addis Ababa welcomed the reforms.

“We can finally invest in the financial sector,” said Addis Alemayehou, a businessman who returned to Addis years ago but has been restricted in the sectors where he can invest.

“The financial sector is one of the most lucrative and well managed, it’s a safe investment outside real estate.”

He left Ethiopia in 1980 when he was eight and returned in 2001 holding Canadian citizenship.

Abiy’s government is also opening up other key sectors of the economy to foreign investment. It plans to offer two telecoms licences to foreign firms, which have been jostling to start operating in one of the world’s last major closed telecom markets.

Ethiopia’s population is young and growing rapidly, and the economy has been expanding at a near double-digit annual rate for more than a decade.

However, Abiy’s reformist drive has been threatened by long-simmering ethnic rivalries that have burst into the open in recent weeks, through sporadic acts of violence.

2 Responses to Ethiopia opens up banking sector to its diaspora

  1. I hope diaspora Ethiopians are not stupid enough to buy Ethiopian bank shares as they were forced by EPRDF to sell their previous bank shares for less.

    Tewodros Awlachew
    August 2, 2019 at 10:24 am
    Reply

  2. 10 years ago there were only 66 billion birr notes printed. In the last 10 years addititonal 732 billion birr notes were printed, making Ethiopia the highest currency printer in the world for the years 2009 – 2019 .

    If Abiy Ahmed is for justice , he should at once change Ethiopia’s birr notes with new with new birr currency. In the last ten years 732 billion birrs were printed by Woyane thugs and burried under the matreesses of EPRDF thugs.

    Prinitng new birr notes will force the EPRDFites to bring out the birr they burried under their matresses. All these coups , killings of Amaras , economic sabotages , displacements , terrors and so on are funded by money EPRDF printed in the last ten years.

    Abiy Ahmed should prove that he is not in the pockets of the EPRDF thugs by changing birr notes with new birr notes.

    Melaku Kebede Biru
    August 6, 2019 at 12:07 pm
    Reply

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