Ethiopia has one of the most diversified economies in the world. However, the country has not adequately exploited its rich potential in these sectors yet. One of the hindrances in its failure to tap its diverse sectors is the fledgling knowledge in the finance industry.
The finance sector is an all-round field that touches all the economic sectors, agriculture, manufacturing, service, etc. Advancement in the finance sector will no doubt help to boost the performance of all these sectors. Therefore government and stakeholders need to give due attention to build up knowledge and expertise in the finance sector.
For many decades the banking and insurance sector in the country were not open to the private sector. Therefore, the country used to be confined to the services of few government run banks. The private sector started to operate in the country’s finance industry only about three decades ago and were struggling to survive in the business under various challenges.
Now that the country is implementing macro-economic reform that attempts to carry out a large-scale transformation of the country’s economy with due attention to reforming the finance sector. Accordingly, the government has liberalized the banking sector for foreign companies and ended up all the necessary preparations to allow their operation. This is a milestone in the country’s financial industry as it opens the domestic sector for competitive service, better skills and experience, as well as source of capital, among others.
By stimulating the growth of the banking sector, the reform can support the finance sectors contribution to the growth of the other economic sectors. The role it plays is not limited to providing finance but also guiding them to properly utilize the funding, become profitable and expand their businesses.
In this regard the government institutions and the private sector that are participating in the ongoing Second Finance Forum for the Investor Series should also consider the need to build deeper knowledge and experience in the finance sector.
The attention to be given to the finance sector is going to pay back in many folds as it can spur the increased performance of the major economic sectors of the country. For instance if we look at the performance of the country’s economy during the 12 month period since the implementation of the macroeconomic reform, we can see that the export sector has revived significantly in terms of the amount of foreign currency earned.
Reports presented during the ongoing second Finance Forum indicate that the country’s earning from export in the previous fiscal year was USD 24.7 Billion, which grew to 32.1 billion following the macro economic reform (about 25% growth).
This is an encouraging step to go and capitalize on. As mentioned above nurturing the finance sector and its actors is mandatory to fill gaps created in the past and build up on existing successes.
Yet ensuring the sustainability of this growth is unthinkable without conserving the knowledge, skills and experiences that enabled to achieve it. Then all existing actors and new comers to the industry would be able to enjoy a well-built financial knowledge system that enables them to succeed. It will also make the country more preferred by both local and foreign investors.
THE ETHIOPIAN HERALD WEDNESDAY 23 JULY 2025
