Mamo Mihretu, the Ethiopian NBE Bank Chief, addressed the 2024 East Africa Finance Summit on Thursday. The two-day 7th East African Finance Summit began in Addis Ababa under the theme “Exploring New Frontiers: Shaping the Future of Financial Landscape & Unlocking Opportunities for Collaboration in East Africa”. The annual summit brought together various players in the financial sector in East Africa.
The Addis Ababa University and i-Capital Africa Institute have jointly organized the summit in collaboration with various organizations. The summit will explore developing investment opportunities as well as potential areas of collaboration for players in the sector.
Ethiopian National Bank head Mamo Mihretu in his address talked about the global and regional dynamics affecting Ethiopia’s financial sector, the policy and regulatory responses by NBE, especially in the context of New Strategy Plan and Ethiopian agenda to prepare for the constantly evolving increasingly digital world of finance.
He mentioned the U.S. Federal Reserve’s aggressive interest rate hikes over the past two years which influenced global borrowing costs including for emerging markets. “The Fed’s rate hikes have reduced foreign investor appetite for African country sovereign bonds leading to a total collapse of such private capital funding until just a few months ago. And even when such markets re-opened, it has come at a much higher cost”, he said.
He claimed that sharp drop in official lending by traditional international donors was putting great pressure on domestic debt markets and leading to the use of highly inflationary forms of financing.
He blamed Covid-19 for sharp rise in government debt across the developed and developing world, a disruption in global supply chains, as well as a more aggressive use of trade and industrial policies to address domestic interests. He termed the emergence of new groupings such as the BRICS as leading to creation of risks and opportunities, especially for the financial sector.
In the second part of his speech, Mamo Mihretu NBE Bank chief shed light on NBE’s New Strategy Plan which began in late 2023. He said the plan aims to build upon the positive trends and successes of recent year.
He said that the Ethiopian financial sector has witnessed tremendous growth in terms of access to finance, mix of products provided, and adoption of digital technologies and modern risk management systems. Services such as mobile banking, mobile wallets, internet banking as well as new digital savings and credit schemes are all increasingly becoming the norm rather than the exception.
Mentioning the financial sector’s growth in recent years he said”, —as of early 2024—a total of 121 financial institutions, with assets of 3.4 trillion, deposits of 2.4 trillion, and loans of 2.3 trillion are operating”.
He summed up by saying, “our new Strategy Plan recognizes the need to further accelerate and deepen many of these trends, while also re-orienting NBE’s policy priorities towards the key central bank responsibilities of maintaining price stability and financial stability”.
At the end of his speech, Mamo Mihretu talked about the Ethiopian Stock Exchange (ESX) which is expected to be made operational later this year. He said the ESX will lead to creation of investment banks, advisory companies, brokerage firms, and mutual funds.
He touched on recent decisions made by the Ethiopian government to open the economy for foreign investors. Last month, Ethiopian government allowed foreigners to invest in Retail, Wholesale, Export and other sectors. The foreigners can own real estate as well.
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Ethiopian Stock Exchange about to become a reality
More Govt propaganda to fool the West. The reality on the ground for the majority of us is continued hyperinflation, guzumping cost of living and high taxes. No Growth. Expenditure on vanity projects and conflict has pushed us back decades!
lowering the cost of living is the biggest challenge