The Government of Ethiopia has decided to amends laws to allow foreign investments in the country’s banking sector, reported Reuters citing the Prime Minister’s office.

The proposed policy was approved by the cabinet, which passed a draft resolution in this regard, according to state-affiliated news agency Fana.

The PM’s office, in a Facebook post, said: “Opening up banking to foreign investors would transform our country’s economy by boosting it to have a better link with the international market.”

By introducing private players in the banking sector, the government seeks to encourage competition, enhance foreign currency inflows and also generate more jobs.   

Since taking charge as Ethiopian Prime Minister in 2018, Abiy Ahmed has been working on open up telecommunications industry among other economic sectors to draw foreign investment.

Ethiopia, one of the key economies in sub-Sahara Africa, has been attracting    foreign investors in various sectors including telecommunications, transportation and aviation.

In 2021, the Ethiopian Government permitted a private telecom operator to compete with the state-owned Ethio Telecom.

Kenya’s Safaricom along with South Africa’s Vodacom, UK’s Vodafone and Japan-based Sumitomo, paid $850m for the licence.

In September 2021, Ethiopia’s Bank of Abyssinia (BoA) collaborated with Xpert Digital to implement Temenos Infinity to digitise its banking services and accelerate customer growth. Through the digital banking platform, BoA planned to revamp its retail mobile banking and SME digital banking services, to enable a unified, omnichannel experience.