By Eyasu Zekarias
The National Bank of Ethiopia (NBE) has announced a significant shift in the country’s economic landscape, revealing that 90% of the wealth generated and collected by the banking sector now comes from the private sector. This marks a departure from previous years when government investments and state-owned enterprises dominated the economy.
Governor Mamo Mihretu emphasized the dramatic changes that have taken place over the past six years, stating, “The economy was largely funded by government agencies and government projects, but now it has changed dramatically.” He attributed this transformation to increased private sector engagement and the need for a robust financial system to support it.
Despite these positive developments, concerns have been raised by private sector investors regarding their access to loans. The NBE has stated that complaints from these investors are often unfounded, urging them to ensure that their documentation meets the necessary requirements for borrowing.
Investors have expressed frustration over the challenges they face when applying for loans, citing issues such as insufficient documentation and lack of collateral. Many have argued that these obstacles hinder their ability to secure financing for their ventures, particularly in export trade.
Mamo highlighted the importance of enhancing the capacity of the private sector as a key aspect of foreign policy, noting that a previously non-existent system has now been established, leading to tangible changes in the economy. He emphasized that the NBE is committed to supporting this growth by facilitating better access to financial resources for private investors.
The NBE’s focus on the private sector aligns with the government’s broader economic reforms aimed at increasing productivity and foreign exchange earnings. However, stakeholders are calling for further improvements in the loan application process to ensure that private sector players can effectively contribute to the economy.