Ethiopia Lifts Restrictions on Bank Investments for Diaspora, Postpones Addis Ababa Elections
By Staff Reporter
July 31, 2019 (Ezega.com) -- The House of People Representatives has lifted restriction for Ethiopian diaspora and Ethiopian origin with foreign nationality to invest in their country's banking sector.
It is recalled that those Ethiopians with foreign nationality were not allowed to participate in the country's financial sector due to failure of the national bank to monitor foreign banks.
In its urgent session on Wednesday, the house, however, approved a bill providing for Ethiopians with foreign nationality to invest in the banking business as part of government's move to make them part of the development of the country's financial sector and nation building.
The changes, which will allow members of the Ethiopian diaspora to buy shares in local banks and start lending businesses, are part of a raft of economic reforms initiated by Prime Minister Abiy Ahmed when he came to power last year.
The reforms are partly aimed at boosting the country's foreign exchange reserves, which had dropped precariously low in recent years.
"The law will enable Ethiopian-born diaspora to take part in the economic growth of the country," said Lemlem Hadgo, chair of the Revenues, Budget and Finance Committee at the Ethiopian parliament.
Ethiopia's banking sector, which is closed to foreign investment and is still one of the most tightly state-controlled in Africa. It is dominated by the oldest and most profitable local banks.
Abiy's government also plans to open up other key sectors of the economy to foreign investment. It intends to offer two telecoms licences to foreign firms, which have been jostling to start operating
in one of the world's last major closed telecom markets.
Ethiopia's population is young and growing rapidly and the economy has been expanding at a near double-digit annual rate for more than a decade.
However, Abiy's reformist drive has been threatened by long-simmering ethnic rivalries that have burst into the open in recent weeks, through sporadic acts of violence that have left dozens of people dead
The Ethiopian parliament on Wednesday also approved a resolution providing for the postponement of elections for council members for the cities of Addis Ababa and Dire Dawa by another year.
Election for members of the Addis Ababa and Dire Dawa city councils was supposed to take place last year. However, it was postponed to this year due to security concerns. The current postponement is the second one for another year, meaning these two cities will be ruled by unelected officials for two years in a row.
The resolution tabled recommends that the elections should take place together with the upcoming general elections planned for May 2020.
Lack of sufficient time was cited as the main reason for the postponement of the elections.
Although it was originally reported that the by the National Electoral Board of Ethiopia (NEBE) was behind the move, NEBE has stated that it is the Ethiopian government which is behind the proposed change in election plans for the two cities. NEBE has asked the government to correct the record.
Works carried out to reorganize the board, prepare draft bills, and recruit members of NEBE took more time, the government had stated.
According to the resolution passed by the parliament, the current councils of both cities will continue until the upcoming general elections are held.
This is expected to anger various groups who question the legitimacy of the current Addis Ababa city administration. Prominent among these groups is the Baladera Council, an organization fighting to preserve the autonomy of Addis Ababa city and requesting statehood for Addis Ababa city.
The parliament also approved bills amending customs and land expropriation and provision of land based on actual price for people whose houses to be removed for public use.