Ambassador Mufti Raises Concerns Over New Banking Bill That Could Open Doors to Foreign Influence - Ethio Eyewitness News

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Ambassador Mufti Raises Concerns Over New Banking Bill That Could Open Doors to Foreign Influence

Addis Ababa, Ethiopia — During a recent session of the House of People’s Representatives, Ambassador Dina Mufti voiced significant concerns regarding a proposed legislative change in Ethiopia’s banking sector. The bill in question, commonly referred to as the “Banking Bill,” aims to revise existing laws to allow foreign investors to own up to 49% of domestic commercial banks. This move could potentially reintroduce external economic influences to the nation.

Ambassador Mufti, addressing the lawmakers, cautioned that the bill might inadvertently lead to a form of economic neocolonialism. He highlighted that many African countries, including Ethiopia, which have historically fought to shed colonial domination, risk falling back under foreign sway due to such policy changes. “We must ensure that our banking sector is not only competitive but also sovereign,” Mufti stated, emphasizing the importance of maintaining control over economic pillars.

The bill, forwarded by the Council of Ministers to Parliament, is part of a broader push to modernize Ethiopia’s banking regulations. For the first time since the imperial era, it proposes allowing well-established and financially sound foreign banks to either fully or partially own local banks, or to establish branches and representative offices within the country.

Key provisions of the draft include a cap on foreign ownership at 49%, up from an initial 30% when first proposed in 2022. Additionally, the National Bank of Ethiopia (NBE) may grant special approvals for complete acquisitions under certain conditions, aimed at attracting strategic investments and resolving issues within distressed banks.

The draft also delineates between “foreign strategic investors” and “nonstrategic foreign investors,” with shareholding limits set at 40% and 7% respectively, with foreign juridical persons allowed up to 10%.

Ambassador Mufti’s remarks underscore a deep-seated caution among Ethiopian officials as they navigate the path between economic liberalization and national autonomy. The current banking law, under review for the past 16 years, had traditionally restricted sector participation to Ethiopian nationals to shield it from foreign dominance.

As the bill progresses through legislative scrutiny, it promises to redefine Ethiopia’s financial landscape, potentially boosting the sector’s global competitiveness. However, as Ambassador Mufti’s comments reflect, ensuring that this openness does not compromise the nation’s economic independence remains a paramount concern.

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