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Ethiopia Banking & Financial Services Q4 2018

Ethiopia Banking & Financial Services Q4 2018

Key View:

Ethiopia is set to maintain its status as one of Sub-Saharan Africa's strongest performing economies over the comingyears, which will feed through into robust growth for its commercial banking and insurance sectors. From a relatively low base, weexpect both sectors to steadily increase penetration. The expansion of the country's trade, industrial and construction sectors willcreate formal employment opportunities and bolster the ranks of the country's middle class, who, in turn, will increasingly demandfinancial services. The Ethiopian government's recent policy shift in mid-2018 to allow private and foreign investment in two of itskey state-owned entities, the state telecoms company Ethio Telecom and air carrier Ethiopian Airlines, suggests upside risks forfurther economic reforms in the quarters ahead. While liberalisation of the banking and financial services sectors remains a sensitiveissue for government, the new central bank governor has indicated that a working group has been formed about reforms in theseareas and potential exists for liberalisation in these areas over the coming years. The year 2018 has already seen significant interestexpressed by various Kenyan banks and mobile money operators to enter the market, reports indicate that they are working withseveral Ethiopian banks to launch such products in the country in the future. We do emphasise that despite these positivedevelopment and expected robust sector growth, Ethiopia's commercial banking and financial services sectors will continue toconstitute a very small portion of the country's total nominal Gross Value Added (GVA) in USD terms over the medium term. Thestringent regulation still in place and the outsize role of incumbent public firms will constrain private firms operating in the banking


Key View
SWOT
Banking
Banking Snapshot
Forecast Scenario
Forecast Tables
Competitive Landscape
Regulatory Environment
Insurance
Insurance Snapshot
Competitive Landscape
Regulatory Environment
Asset Management
Asset Management Snapshot
Stock Exchanges
Stock Exchanges Snapshot
Competitive Landscape
Regulatory Environment
Macroeconomic Forecasts
Ethiopian Growth Outlook Positive But Beset By Risks
Macroeconomic Forecasts
Ethiopia
Banking & Financial Services Methodology

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