The Ethiopian banking industry is open to foreign investment for the first time in half a century as lawmakers finally ratify the amended Banking Business Proclamation.
The bill was passed today with only three MPs voting in opposition following a lengthy discussion in Parliament today.
Among those who opposed the bill was Desalegn Chane (PhD), who argued the National Bank of Ethiopia (NBE) lacks the capacity to regulate foreign banks.
He fears liberalizing the industry would crowd out domestic banks and hurt small and medium businesses by funneling finance towards large conglomerates.
Desalegn also questioned what the move would mean for industry shareholders, particularly those who own stakes in recently formed third generation banks.
Central bank Governor Mamo Mihretu, however, brushed aside the concerns and stated the bill would enable the NBE to scale up its regulatory prowess.
