Addis Ababa — The state-owned Ethiopian Commercial Bank (ECB), said it will open more branches in main towns of South Sudan including one in Upper Nile State going operational in weeks.
ECB was granted regulatory approval by the South Sudan government in January 2009 and shortly after it opened a branch in Juba under the name CBE-Southern Sudan Ltd. with an initial capital of 15 million US dollars.
Many foreign financial firms entered the region following the 2005 Comprehensive Peace Agreement that brought an end to over two decades of civil war between Sudan and South Sudan.
Foreign banks seem to dominate the banking industry in South Sudan. Before the country gained independence, there was only one bank operating to the 9 million estimated population of South Sudan.
Based in Juba town, CBE-Southern Sudan Ltd. has over 4,000 depositors most of them Ethiopians, Sudanese and Eritreans.
According to Ethiopian newspaper the Fortune, the bank has already dispatched 13 Ethiopian workers to South Sudan, with the branch in Malakal, South Sudan's second largest city is set to be opened next month.
Currently, there are only three banks functioning in Malakal, including two local banks the Nile Commercial and Ivory and Kenyan Equity bank.
CBE-Southern Sudan Ltd. also plans to open additional branches in Wau the capital of Western Bahr el Ghazal and Rumbek the capital of Lakes State in the next six months.
The Ethiopian Commercial Bank has up to 10,000 employees working at over 500 branches across towns in Ethiopia.
Last month, an Ethiopian private bank, United Bank said it will open its first branch outside Ethiopia in South Sudan's capital Juba. When opens, the United Bank, locally known as Hibret, will be Ethiopia's first private bank to break into the banking industry of South Sudan.
South Sudan has attracted investment and workers from around East Africa and further afield looking to cash in on opportunities in the world's newest nation.
This week leaked World Bank documents said that South Sudan's economy on the verge of collapse after the decision to stop oil production through Sudan, accusing Khartoum of steeling its crude over a transit fee dispute.
South Sudan's government relied on oil for 98% of its budget. The oil stand off is also severely affected Sudan's economy, which is struggling to readjust to loosing 75% of the country's oil-production when South Sudan seceded.
Khartoum insists on being paid $36 per per barrel that is exported and refined through its territory, while Juba says it will not pay more than $1.
The borders between the two have closed for trade for over a year and border fighting over contested oil areas brought Sudan and South Sudan close to brink if all out war in April.