ADDIS ABABA – Apart from expansion of branches and services, Ethiopian banks need to exert maximum efforts to merge their human, material and technological capital that would help them to become active players in the global banking industry, the expert noted.
Approached by the Ethiopian Press Agency (EPA), an economist and investor, Zemedeneh Nigatu said that merger of Ethiopian banks can help them enjoy transforming, advance country’s economic system though they need to discuss matters in detail and bridge gaps to take the right track.
Zemedeneh further said that as Ethiopian banks have small capital and relatively sluggish running system, they could hardly compete in the world market single-handedly, thus they need to come together to gain financial power and economic capacity.
“State of merging for banks is of significantly useful to investment and rapid growth beyond homeland. Prior to opening market chance to the foreign financial sectors, the government must encourage the available 17 banks to merge together so as to help them have ample capacity to compete with world financial sector and record further development in the nation.”
As to him, since having a middle income country in 2030 requires modernization and strong financial capacity, Ethiopia needs to build strong, up-to-the-minute and competent banking sector.
Another strategy in which foreign banks can work with Ethiopian counterparts that he mentioned is using joint venture. If they cannot be merged, it will be difficult for banks to get profit and avoid bankruptcy.
Therefore, the government should play great role in designing applicable policy to the banks in that regard.
Merging Ethiopian banks and making their financial power swell helps the nation register double digit economy thereby achieving the set target as well as transforming the banking industry.
Also, Ethiopian banks should open branches abroad specifically where a large Ethiopian community is residing and to attain such a gigantic mission, the banks should be big and well developed by entertaining viable means, the businessperson commented.
BY MISGANAW ASNAKE
The Ethiopian 20 February 2022