Ethiopia is still not ready to open up its market for foreign banks, Prime Minister Ato Hailemariam Desalegn has said throwing into disarray plans by Kenyan lenders to venture into the country.
The Ethiopian leader was ironically speaking at a breakfast hosted by Equity Bank at the Intercontinental hotel in Nairobi just after the bank chief executive James Mwangi sought the Ethiopian leader's support to venture into the country.
Desalegn was responding to local business community's inquiries on available opportunities in Ethiopia following the signing of an inter-governmental pact for Special Treatment Agreement for Kenyan traders going to Ethiopia.
But according to the Ethiopian PM, banking is not part of the agreement signed between him and President Kibaki on Tuesday. "Liberalising the banking sector would make credit expensive for business and slow down growth momentum, and that is why we have state our own Development Bank of Ethiopia to create a balance," the PM said.
Ethiopia has sustained 11 per cent growth rates for a number of years now and hopes to keep it going through regional co-operation with regional countries.
The PM landed in Kenya on his first foreign visit since he ascended to top leadership of Ethiopia to succeeded Meles Zenawi who died a few months ago.
While urging Kenyan business community to venture into Ethiopia, the PM said opportunities are mainly in agricultural production, agro-processing and manufacturing.
Ethiopia offers a variety of incentives for investors including serviced-leased land, collateral-free loans, duty-free importation of capital goods alongside tax holidays of up to seven years. Kenya and Ethiopia have already agreed on axle-load requirement for trucks transiting to and from either side of the border.
Tourism sector operators will however have to wait for an agreement before Ethiopia allows issuance of visas in Nairobi for foreign tourists in Kenya wishing to visit the northern neighbor.
Desalegn said a committee will be formed to link with Kenyan tour operators to formulate a co-operation deal as Ethiopia learns the tricks from the more advanced Kenyan tourism players.
The two countries have resolved to accelerate activation of trade agreements and find new areas of commercial co-operation as individual countries, regional bloc and corporate investments.
In the services sector, the Ethiopian leader said cities are in dire need of five-star hotels because currently one has to book a month in advance to get accommodation in Addis Ababa.