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Ethiopian lawmakers have passed long-planned legislation to allow foreign banks to operate in the country.
The move is a key part of the government’s drive to attract more foreign investment.
Ethiopia has one of sub-Saharan Africa’s biggest economies and, with more than 120 million inhabitants, is the continent’s second most populous nation. Prime Minister Abiy Ahmed has sought to open up the country’s tightly controlled economy since coming to power in 2018.
The new law, passed by Parliament on Tuesday, allows foreign lenders to establish subsidiaries, open branches or representative offices, and buy shares in local banks. But it imposed a limit on foreign strategic investors, capping their ownership at 40% in any local bank.
The state-owned Commercial Bank of Ethiopia currently dominates the country’s banking sector.
