Business
Ethiopia: Infrastructure boom attracting continental banks into the country’s closed financial sector
Peter Biwott, the trade and development manager at the Kenya National Chamber of Commerce, said that Ethiopia’s public investment and a growing consumer base is attracting foreign investors.
“The country has boasted an average gross domestic product (GDP) growth of 10 percent since 2010. Its heavy public investments in agriculture, energy and transport are set to boom, and these financiers are angling for a slice of this pie,” he said.
Sterling Capital analyst Eric Munywoki said that Kenyan banks are looking for opportunities to grow outside their traditional markets. “Some of these banks are big on trade financing, and they could be looking at this market for that specific purpose. There is room for growth there,” he said.
The entry of these banks into the market could also offer some relief to local lenders that have struggled under the heavy state restrictions on private credit. Banks in Ethiopia charge an additional 27 percent when they lend money to the private sector. This has been draining their capital.
Foreign banks eyeing Ethiopia’s markets, however, have enough capital to fund investors for these projects.
Private equity firms are also now looking at the opportunity to enter this market.
Source: The EastAfrican
