Addis Ababa, May 9, 2024 (FBC) – National Bank of Ethiopia (NBE) Governor Mamo Mihretu expressed his hope that Ethiopia would very soon have a more open, diversified, and competitive financial system that fosters innovation, inclusion, and operates in line with international best practices.
The governor made the above remark in his opening speech to the 7th East Africa Summit in Addis Ababa today.
“We hope to see very soon, a more open, diversified, and competitive financial system that fosters innovation, inclusion, and operates in line with international best practices.”
According to him, such a fundamentally transformed financial sector will bring with it many new elements.
Mamo pointed out that among the new areas where work is ongoing to realize the transformation is a policy shift that allows reputable foreign investors to operate in Ethiopia, bringing fresh capital, innovative products, and global best practices.
“We expect consumers to benefit from this reform; but also the system as a whole since everyone involved will need to step up their game and what would be a more competitive and dynamic playing field,” he stated.
And beyond the openness to foreign investors, Ethiopia’s financial sector is also being fundamentally transformed by the imminent launch of capital markets. In this regard, the governor said the Ethiopian Securities Exchange (ESX) is expected to become operational later this year.
With this a totally new ecosystem of financial firms, investment banks, advisory companies, brokerage firms, and mutual funds would emerge very shortly.
Moreover, with a blunt focus on SMEs, growth-stage companies, and crowd-funding platforms, “we expect the ESX to benefit from its late-comer advantage and offer a more inclusive and encompassing exchange that has been the norm so far in many African countries,” the governor said.
Thirdly, Mamo pointed out that Ethiopia’s financial sector reforms are taking place alongside its entry into the BRICS Plus grouping that promises to unlock potentially significant new economic partnerships and funding avenues.
“Access to larger capital pools, diversified investment opportunities, and collaborative developmental projects are just a few advantages we foresee as part of our BRICS membership.”
The governor believes that shifting alliances and the emergence of new grouping such as the BRICS Plus will bring opportunities, especially for the financial sector.
All of these global shifts necessitate a robust and responsive financial framework within our regional economies to cope and manage these shocks effectively, he emphasized.
In the Ethiopian context and by the very nature of its role and responsibilities, the National Bank of Ethiopia is very closely involved in navigating such shocks and their associated complexities, per ENA.
“Rather than just reacting to external and internal shocks, we are instead actively setting an ambitious and hopeful agenda focused on financial stability, inclusion, and modernization.”
Beginning in late 2023, the National Bank of Ethiopia has set, for instance, a new strategic plan that aims to build upon the positive trends and successes of recent years.