Ethiopia’s parliament has finally passed the legislation opening up the country’s banking sector to foreign players on December 16.
The landmark law passed the 547-seat parliament with only two votes against, after heated debate between an opposition MP and the Governor of the National Bank of Ethiopia.
Brushing aside the fears expressed by the opposition members of parliament on possibilities that the weaker, much smaller local banks would be swallowed up by the giant foreign banks, Central Bank Governor Mamo Mihretu argued that increased competition would benefit local lenders.
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The banking law, maintains a 40 percent cap on foreign ownership of banks.
With a market share of 58 percent, the state-owned Commercial Bank of Ethiopia (CBE) currently dominates the local banking sector.
