Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector
Ethiopia’s financial sector has, over the past decade, been operating under a financial repression framework used by the government for managing its monetary and foreign exchange policy, and financing of large infrastructure projects and state-owne...
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/302351592971524908/Ethiopia-Financial-Sector-Development-The-Path-to-an-Efficient-Stable-and-Inclusive-Financial-Sector http://hdl.handle.net/10986/34065 |
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okr-10986-340652021-05-25T09:54:50Z Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector World Bank STATE-OWNED BANKS BANKING SECTOR FINANCIAL REGULATION GOVERNMENT BOND MARKET EQUITY MARKET FINANCIAL INCLUSION FINANCIAL PAYMENT SYSTEM FINANCIAL TECHNOLOGY FINTECH ANTI-MONEY LAUNDERING MICROFINANCE CREDIT INFORMATION SYSTEM Ethiopia’s financial sector has, over the past decade, been operating under a financial repression framework used by the government for managing its monetary and foreign exchange policy, and financing of large infrastructure projects and state-owned-enterprises (SOEs). Instruments used under this framework include the central bank financing of the government, a state-dominated banking sector, mandatory financing of priority projects and directed credit, administered interest rates, a captive domestic market for government debt, high liquidity and capital requirements, and strict foreign exchange controls. Over time, the framework has led to the build-up of large macro-financial imbalances; these include a system of fiscal dominance, pressures on inflation, the overvaluation of the Birr, a chronic shortage of foreign exchange, the lack of development of the financial system, a credit allocation skewed toward the public sector, and an overall risk of malinvestment. This report was prepared as part of a technical assistance engagement and was based on a request from the National Bank of Ethiopia (NBE) as an input to support their development of a financial sector modernization roadmap to meet the overall government reform plans. The report provides an insight on operations and challenges in Ethiopia’s financial sector and proposes a framework to help open and transform the current system to meet the country’s future market-oriented growth plan. The report is organized along the NBE Roadmap framework which is aligned across three pillars: (i) financial stability and safety net; (ii) long-term finance and financial markets; and (iii) access to finance and financial inclusion. Opening of the financial sector constitutes a cross-cutting theme. 2020-07-09T16:03:45Z 2020-07-09T16:03:45Z 2019-12 Report http://documents.worldbank.org/curated/en/302351592971524908/Ethiopia-Financial-Sector-Development-The-Path-to-an-Efficient-Stable-and-Inclusive-Financial-Sector http://hdl.handle.net/10986/34065 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Other Financial Sector Study Africa Ethiopia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
STATE-OWNED BANKS BANKING SECTOR FINANCIAL REGULATION GOVERNMENT BOND MARKET EQUITY MARKET FINANCIAL INCLUSION FINANCIAL PAYMENT SYSTEM FINANCIAL TECHNOLOGY FINTECH ANTI-MONEY LAUNDERING MICROFINANCE CREDIT INFORMATION SYSTEM |
| spellingShingle |
STATE-OWNED BANKS BANKING SECTOR FINANCIAL REGULATION GOVERNMENT BOND MARKET EQUITY MARKET FINANCIAL INCLUSION FINANCIAL PAYMENT SYSTEM FINANCIAL TECHNOLOGY FINTECH ANTI-MONEY LAUNDERING MICROFINANCE CREDIT INFORMATION SYSTEM World Bank Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| geographic_facet |
Africa Ethiopia |
| description |
Ethiopia’s financial sector has, over
the past decade, been operating under a financial repression
framework used by the government for managing its monetary
and foreign exchange policy, and financing of large
infrastructure projects and state-owned-enterprises (SOEs).
Instruments used under this framework include the central
bank financing of the government, a state-dominated banking
sector, mandatory financing of priority projects and
directed credit, administered interest rates, a captive
domestic market for government debt, high liquidity and
capital requirements, and strict foreign exchange controls.
Over time, the framework has led to the build-up of large
macro-financial imbalances; these include a system of fiscal
dominance, pressures on inflation, the overvaluation of the
Birr, a chronic shortage of foreign exchange, the lack of
development of the financial system, a credit allocation
skewed toward the public sector, and an overall risk of
malinvestment. This report was prepared as part of a
technical assistance engagement and was based on a request
from the National Bank of Ethiopia (NBE) as an input to
support their development of a financial sector
modernization roadmap to meet the overall government reform
plans. The report provides an insight on operations and
challenges in Ethiopia’s financial sector and proposes a
framework to help open and transform the current system to
meet the country’s future market-oriented growth plan. The
report is organized along the NBE Roadmap framework which is
aligned across three pillars: (i) financial stability and
safety net; (ii) long-term finance and financial markets;
and (iii) access to finance and financial inclusion. Opening
of the financial sector constitutes a cross-cutting theme. |
| format |
Report |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| title_short |
Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| title_full |
Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| title_fullStr |
Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| title_full_unstemmed |
Ethiopia Financial Sector Development : The Path to an Efficient Stable and Inclusive Financial Sector |
| title_sort |
ethiopia financial sector development : the path to an efficient stable and inclusive financial sector |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/302351592971524908/Ethiopia-Financial-Sector-Development-The-Path-to-an-Efficient-Stable-and-Inclusive-Financial-Sector http://hdl.handle.net/10986/34065 |
| _version_ |
1764480261907546112 |