The Ethiopian Parliament approved, a few weeks ago, a proclamation allowing, for the first time, the entry of foreign players into the country’s banking sector. This reform now authorizes foreign banks to establish subsidiaries, open branches or representative offices, and acquire shares in local establishments.
However, foreign participation remains regulated: ownership of public banks will be capped at 49%, and no individual investor will be able to hold more than 40% of a bank’s shares. The senior management of establishments may include foreign nationals, but the boards of directors must include Ethiopian citizens, according to the local press.
Since the announcement of this opening, several international banking establishments, notably those in Morocco, have expressed their interest in this promising market. This reform comes as Ethiopia, the second most populous country in Africa, seeks to strengthen its financial sector, which currently has 32 banks with a combined capital of 290 billion birr (2.3 billion USD).
Moroccan banks, such as Attijariwafa Bank and Banque Centrale Populaire (BCP), could take advantage of this prospect to strengthen their presence in East Africa from 2025, we learned from informed sources. Already active in many sub-Saharan countries, these institutions have proven expertise in supporting developing economies and could contribute to the structuring of an Ethiopian banking sector that is still largely underdeveloped.
For Morocco, this possible expansion is part of a broader strategy of economic affirmation on the African continent, driven by the royal policy of South-South cooperation. The Ethiopian opening thus constitutes a strategic gateway for Moroccan banks, which could play a key role in financing infrastructure and the development of local SMEs, while reinvigorating bilateral economic relations between Rabat and Addis Ababa.
However, this ambition comes with challenges. Moroccan establishments will have to adapt to a still fragile economic environment and meet the strict regulatory requirements imposed by Ethiopia. Competition from regional banks and international players could also limit their room for maneuver, sources close to the matter told Barlamane.com. This opening of the Ethiopian banking market represents, nevertheless, a major step in African financial integration, offering Moroccan banks the opportunity to consolidate their position as regional pioneers and support the economic growth of South Africa. ‘East.
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