By Kassahun Chanie
During the 36th regular session of parliament, Ethiopia's Prime Minister Abiy Ahmed (PhD) addressed concerns, stating that the country's financial sector has demonstrated robust growth and improved stability across several metrics. Premier Abiy emphasized that Ethiopian banks need to enhance their capabilities to remain competitive with international banks.
Responding to inquiries from members of parliament regarding the federal government's performance report for the 2016 fiscal year and current challenges, the Prime Minister highlighted significant advancements in international indicators. He noted that the stability observed in the financial sector is a key indicator of the positive impact of the government's efforts to address Ethiopia's macroeconomic issues.
PM Abiy reported that the percentage of non-performing loans in Ethiopia stands at 4.5%, compared to the global average of 5%. He stressed the importance of allocating 80% of revenue to the private sector as crucial for the sector's revitalization.
The Prime Minister provided several statistics to illustrate the sector's growth:
- The number of banks has increased from 17 to 32.
- Bank profits for the current year are over 24% higher than the previous year.
- Bank branches have grown from 5,400 to over 12,800.
- Savings accounts have increased from 38 million to over 100 million.
These figures, according to PM Abiy, indicate that many citizens and institutions are entering the banking industry.
Additionally, the Premier noted that 47 million people are currently utilizing mobile money transfer services. He also mentioned that the government is working on initiatives to allow international banks to operate in Ethiopia, including developing operational frameworks.
In light of this, Abiy urged Ethiopian banks to boost their operational and human resources, technological capabilities, and accessibility to thrive in an increasingly competitive market. He concluded by stating that foreign banks will open offices in Ethiopia, aiming to enhance the industry's competitiveness and modernization.