Ethiopian Private Banks Under Pressure to Merge

Ethiopian private banks complain that the government is forcing them to merge. In a complaint to the National Bank of Ethiopia (NBE), the private banks said the currency reform made in July this year has negative impact on their foreign currency accumulation.

In July, the Ethiopian government introduced macro economic reforms, foreign exchange market was liberalized and private banks were allowed to buy and sell foreign currency.

Private banks have sought explanation from the NBE on the instruction that banks should merge in order to compete with foreign banks. The officials of the National Bank have said that local private banks are not bound to necessarily merge and no law fixes the number of banks that must operate in the country.

In a speech a few weeks ago, Ethiopian Prime Minister Abiy Ahmed also suggested that local banks should merge to create a few strong banks. Ethiopia has opened its banking sector to foreign banks. In coming months, foreign banks from Africa and Middle East are likely to enter Ethiopian banking sector.

NBE Shares Economic Impact of Ethiopian Foreign Exchange Reform

Amount Allocated for Ethiopian University Students’ Food Expense Raised

Ethiopia Prepares to Sell Electricity to South Sudan & Tanzania