Addis Abeba — The National Bank of Ethiopia (NBE) said that it is on the verge of issuing banking licenses to foreign investors as part of the government's intention to open up the financial sector to global competition by issuing five licenses over the next five years.

Solomon Desta, Deputy Governor of the NBE, told the Ethiopian News Agency that local commercial banks should brace themselves for the upcoming intense competition. "The revision of the banking proclamation is nearing completion," said Solomon. "It will be tabled before lawmakers in a few months."

The deputy governor added that the banks should among other things revise their strategies and management systems, enhance their capital and prepare themselves for potential merger and working with other financial institutions.

Following approval by the Council of Ministers last November, the NBE implemented a policy outlining the guidelines for foreign firms' participation in Ethiopia's banking sector. Based on the policy, foreign investors would have several choices for entering the banking industry, including forming joint ventures with domestic players or establishing local subsidiaries.

Last week, the deputy governor also said that the government intended to allow foreign insurers to operate in Ethiopia. AS