Govt Keeps Financial Services Local in New Investment Rules

ADDIS ABEBA – Ethiopia approved new regulations that continue to reserve business opportunities in many sectors, including financial services, for local investors.

Banking, insurance, brokerage services, and legal consultancy remain off limits for foreign investors, according to the regulations published on the Ethiopian Investment Commission’s website. Exports of coffee, and media and security services are also exclusively for local investors.

The updated regulations are part of economic reforms by the government of Prime Minister Abiy Ahmed and include the privatization of state-owned enterprises such as sugar and cement companies.

Plans to sell a minority stake in the country’s telecommunications monopoly, Ethio Telecom, and the issue of two additional mobile licenses have attracted the interest of international carriers including Johannesburg-based Vodacom Group Ltd. and MTN Group Ltd.

International air transport service, which is dominated by state-controlled Ethiopian Airlines, public transport, and the import and export of power are among industries reserved for joint ventures with the government. Still, foreign investors working with a domestic partner are restricted to a 49% stake, according to the regulations that took effect on Sept. 2.

Several foreign banks have representative offices in the Horn of Africa country, including Equity Group Holdings Plc. of Kenya. Lease companies, such as a unit of New York-based Africa Asset Finance Co., which pledged to bring in equipment worth $600 million after being licensed in August, can also operate there.
By Samuel Gebre/Bloomberg

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