The House of People’s Representatives, during its 11th regular session, reviewed and approved the National Bank Proclamation and the Banking Proclamation, paving the way for foreign banks to operate in Ethiopia.
National Bank Governor Mamo Mihretu emphasized that the National Bank Proclamation aims to stabilize the Ethiopian economy, ensure price stability, and maintain the soundness of the financial system. He highlighted the bank’s role in contributing to sustainable economic growth while modernizing and enhancing its regulatory capacity to adapt to evolving financial sector dynamics.
The approved proclamation defines the objectives, functions, and organizational structure of the National Bank, along with its relationship with the government and financial institutions. It further stipulates that if the government fails to repay a loan within one year, it may be ineligible for additional borrowing.
Additionally, the proclamation emphasizes the National Bank’s primary focus on price stabilization. It also grants the National Bank the authority to freeze funds or deposits suspected of being used for illegal activities for up to 10 days.
The Banking Proclamation, approved with a majority vote, will allow foreign banks and investors to enter Ethiopia’s banking sector. Officials noted that this move aligns with government policies to open the economy, attract investment, and stimulate economic growth.
Source: Fana BC and Sheger FM 102.1
