Ethiopia has officially moved closer to liberalising its banking industry, but with limits. The National Bank of Ethiopia (NBE) has issued a draft directive that caps total foreign ownership in local banks at 49 percent, signalling a cautious but strategic shift in one of Africa\u2019s most protected financial markets.<\/p>\n
\n \u201cAggregate shareholding by foreign nationals and foreign-owned Ethiopian organizations in a bank, other than a foreign bank subsidiary, shall be limited to forty-nine (49%) of the total subscribed shares of a bank,\u201d the NBE stated.\n <\/p>\n
\n The central bank described the reform as strengthening Ethiopia\u2019s financial stability and competitiveness.\n <\/p>\n
\n \u201cPromoting a strong and viable banking sector in Ethiopia is crucial for macro-economic stability and growth,\u201d it said, adding that foreign investors \u201cbring strategic value\u2026 through strengthening capital, improving efficiency and technology, transferring knowledge and improving governance.\u201d\n <\/p>\n
Balancing growth with protection<\/p>\n
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\n The draft directive also underscores the need for a robust regulatory framework to ensure \u201cthe safety and soundness of the banking sector.\u201d\n <\/p>\n
\n If enacted under the new Banking Business Proclamation No. 1360\/2025, the directive could finally open Ethiopia\u2019s doors to long-anticipated foreign participation.\n <\/p>\n