Ethiopia has officially opened its banking sector to foreign investors in a bid to attract overseas capital and expertise into its financial system.
According to a statement issued on Wednesday by the National Bank of Ethiopia (NBE), international banks and investors can now apply for licenses to operate in the country.
“NBE (National Bank of Ethiopia) is very pleased to declare that the Ethiopian banking sector is hereby open for foreign participation and that applications from foreign banks and investors can be submitted to NBE from today onwards.”
For the first time, Ethiopia has opened its banking sector to foreign investors, marking a significant milestone in the country’s tightly regulated financial sector.
This move follows the passage of a long-awaited law, approved in December 2024, allowing foreign investors and banks to establish subsidiaries, open branches or set up representative offices, and acquire shares in local banks.
While specific regulatory obligations and licensing timelines remain unclear, the central bank emphasised that the framework is designed to ensure transparency, stability, and adherence to domestic regulatory guidelines, ultimately supporting the development of Ethiopia’s financial landscape.
Ethiopia’s decision to open its banking sector to foreign banks and investors provides an opportunity for banks and foreign investors, especially Nigerian banks, to expand their operations, aligning with their regional expansion moves.
With Nigerian banks like FirstBank and Access Bank actively pursuing regional expansion, this development presents an opportunity to extend their reach into one of Africa’s most populous and underbanked countries.
