Aiden Kiprop 
The National Bank of Ethiopia (NBE) Governor, Mamo Mihretu
- Ethiopia Opens Banking Sector to Foreign Investors;
The National Bank of Ethiopia (NBE) issued a directive on June 25 paving the way for foreign banks and investors to participate in the country’s banking industry.
NBE said the move marked the latest stage in the country’s progress towards financial liberalisation and was effective immediately.
It noted that the new Directive is the result of extensive consultations conducted over the past year with a wide range of stakeholders, whose inputs have been given due consideration.
“The new directive was formally known as Directive No SBB/94/2025 or Requirements for Licensing and Renewal of Banking Business and Representative Office Directive,” read part of the statement.
NBE said this new Directive follows the recently passed Banking Business Proclamation that provided the required legislative framework.
The new Licensing Directive allows for the first time the participation of foreign investors including banks or other strategic investors in the Ethiopian banking system.
The Directive provides for several modalities through which foreign entrants may join the banking sector, including, among others, by setting up subsidiaries, foreign bank branches, or Representative Offices.
In addition, the new Directive shifts the licensing and supervision of Representative Offices to the NBE for the first time.
The NBE expects that the opening up of the sector to foreign entrants will help bring increased capital, competition, service delivery, efficiency, and inclusivity to the sector, all of which should deepen Ethiopia’s financial sector and contribute to improved growth.
“The NBE is pleased to declare that the Ethiopian banking sector is hereby open for foreign participation and that applications by foreign banks and investors can be submitted to NBE from today onwards,” NBE said in a statement.
