Native Ethiopians Need to Bridge a Transition to Liberalization
Last week, the National Bank of Ethiopia issued a new directive-Manner of Relinquishing Shareholding of Foreign Nationals of Ethiopian Origin in a Bank or Insurer. This is an enforcement mechanism of its rule that no foreign nationals or organisations, in full or in part, own shares or establish banks or branch offices or subsidiaries of foreign banks in Ethiopia. Such a move has come following a circular last year that demanded the banks identify their shareholders who have citizenship other than Ethiopia and submit the list to law enforcement agencies.
The new directive states the potential criminal liability that will be imposed. It continues tightening the rope around the neck of the banks and foreign nationals of Ethiopian origins to drop out of their engagement in financial institutions at any level, irrespective of the proportion of shares owned by the foreign nationals. The statistics are tricky at any point, as the situation is volatile with shareholders having a chance of changing their citizenship any time and the banks and the regulatory bodies having no chance of tracing the change. Gross estimation ownership of shares by foreign nationals in the banking and insurance industry stands less than one percent, insignificant in the loose implementation of the rule.