Yinager Dessie (PhD) (left), governor of the National Bank of Ethiopia (NBE), met with private business players at the bank’s premises, off Sudan Avenue, on July 19, 2018. The Governor, who was recently appointed to the post after a three-year stint at the National Planning Commission, focused on the challenges of access to finance  when he met with business leaders and members of the banking community including Zafu Eyesuswork (right), current chairperson of United Bank’s board of directors and former president of both the national and city chambers.

Lack of access to resources, including land and finance, and a weak tax administration system gained traction during the discussion. The issue of access to finance was attributed to constraints imposed by government policies and regulations that have limited the ability of banks to give credit.  The absence of alternative means of raising funding such as a capital market, the forex crunch and corruption in the allocation of credit and foreign currencies were also discussed.

Past efforts by the government to help the private sector become more competitive were raised, as well as initiatives to encourage financial inclusion and lease financing. Initiatives such as supplier’s credit, introduced to relieve the forex crunch, were criticised, however, for prioritising exporters while failing to meet the foreign currency needs of manufacturers that can contribute to import substitution.

There have been repeated calls from multilateral institutions, such as the International Monetary Fund (IMF) and the World Bank, for the government to relax the economic regime in Ethiopia and allow the private sector more space. They have called for the phasing out of the NBE bills that private banks have to buy on every loan that is disbursed and more comprehensive reforms such as the liberalisation of the financial sector.

Yinager highlighted that the government is ready to make reforms and promised that there would be amendments to regulations that have obstructed growth in the private sector.

Published on Jul 21,2018 [ Vol 19 ,No 951]



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