The National Bank of Ethiopia on 28 November re-licensed Standard Bank's representative office as the first foreign financial institution under the revised Banking Business Proclamation, in what Addis Insight called Ethiopia's first concrete step toward opening its protected financial sector. This measured step permits the South African giant to keep operating its representative office (open since 2015) for client liaison, market research, and service promotion, but, as a representative office, it may not offer banking services or engage in financial transactions.
END OF DECADES-LONG ISOLATION
For decades, Ethiopia's banking system was reserved for domestic investors. The new proclamation shatters this barrier, authorizing foreign subsidiaries, branches, and representative offices while capping total foreign ownership at 49 percent—up to 40 percent from strategic investors in local banks. Authority for licensing representative offices has shifted from the Ministry of Trade and Regional Integration to the National Bank.
The NBE said Standard Bank was the first to complete the transition to its licensing regime. According to the NBE, representative offices may conduct market research, build relationships and promote opportunities, but are not permitted to offer banking services or engage in financial transactions.
Standard Bank, which Addis Insight described as Africa's largest banking group by assets, already operates a representative office in Addis Ababa.
NAVIGATING REGULATORY MAZE
The NBE's June 2025 directive SBB/94/2025 sets requirements for licensing and renewal of banking business and representative offices, covering entry through subsidiaries, foreign bank branches and representative offices. The National Bank said that bringing representative offices under its authority strengthens oversight, enhances transparency and aligns financial-sector governance with reforms aimed at increasing foreign investment.
Addis Insight noted that the move comes as Ethiopia navigates high inflation and foreign-exchange shortages.
MORE APPLICATIONS UNDER REVIEW
The NBE said it has begun re-licensing representative offices and is reviewing new applications under the updated framework.
When it issued the licensing directive in June 2025, the NBE said it expected the opening of the sector to foreign entrants to “help bring increased capital, competition, service delivery, efficiency, and inclusivity to the sector”.
WIDER REFORMS
Prime Minister Abiy Ahmed's administration has committed to opening the banking sector gradually, starting with representative offices, Addis Insight reported.
Ethiopia’s banking reforms are part of Prime Minister Abiy Ahmed’s broader economic transformation programme, which also includes currency reform, investment climate improvements, and liberalisation of sectors like telecommunications.