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For roughly 50 years — from the Derg-era nationalisations of private banks following the 1974 coup — Ethiopia's banking sector was constitutionally and statutorily closed to foreign ownership. Proclamation 592/2008 (the previous banking law) explicitly prohibited foreign ownership of domestic banks. Proclamation No. 1360/2025 repeals that framework entirely and replaces it with a tiered foreign-participation model.
Foreign entry pathways: 1. Subsidiary — a newly incorporated Ethiopian entity with a foreign parent holding up to the statutory cap; subject to full NBE licensing under the new Directive No. SBB/94/2025 (Requirements for Licensing and Renewal of Banking Business and Representative Office Directive). 2. Branch — a direct presence of a foreign bank without a separate legal personality in Ethiopia; subject to NBE branch-licensing requirements. 3. Representative office — limited to liaison and promotional activity; no deposit- taking or credit operations permitted. 4. Equity acquisition — direct share purchase in an existing Ethiopian licensed bank; a single foreign strategic investor is capped at 40% per bank, and aggregate foreign ownership across all investors at 49%, preserving majority-domestic ownership.
Capital requirements (implementing Directive SBB/94/2025):
rather than speculative entrants.
Supervision: The National Bank of Ethiopia (NBE) is the sole licensing and supervisory authority. The Governor retains discretion to deny or condition licences on prudential or public-interest grounds.
Legislative history:
timestamp and NBE publication is March 12, 2025.
about Ethiopia expansion. With ~130 million population and low banking penetration (~35% of adults), Ethiopia is among the largest unbanked pools in sub-Saharan Africa.
40% single-investor cap makes a control acquisition impossible but a strategic anchor stake in the large domestic banks (Commercial Bank of Ethiopia, Awash Bank, Dashen Bank) feasible.
run a domestically majority-owned subsidiary — mitigating dollarisation and sovereignty- of-credit-allocation concerns but limiting full-branch autonomy for large multinational banks.
Watch for subsequent NBE directives on (a) capital adequacy for foreign subsidiaries, (b) foreign-currency exposure limits, and (c) cross-border interbank settlement under the Ethiopian Payment System Proclamation 1168/2019.
Banking-sector liberalisation is structurally consistent with the programme's financial- sector conditionality (Article IV 2024: NBE instructed to relax SOE banking dominance).
foreign equity acquisition under the proclamation, or is it carved out via SOE policy?
public deadline announced as of May 2026.
to NBE licence.