The Council of Ministers approved a new policy on September 3, 2022, that allows foreign investors to access Ethiopia’s banking sector. The Ethiopian government’s announcement of its new policy is due to Ethiopia’s foreign currency shortage and low access to the international finance sector. International banking companies will finally be able to enter the Ethiopian market. This is expected to create competition between local banks and foreign banking sectors. The impact of the new opening sector is different in many countries. Local banks are expected to step up their games to survive the coming competition to stay in business.
The Ethiopian government has been reviewing and approving proclamations throughout this year. The country has been working to increase investment opportunities in various sectors, including telecommunications, Fintech firms, and more. Last year, the government allowed Safaricom, a telecommunication company, to enter the country’s telecommunication sector, creating a competitive environment for further improvement in the telecom sector. The newly drafted policy is the same as why Safaricom entered the country: to improve the nation’s economy and its link to the global market by increasing the country’s cash flow.