Deutsche Bank eyes entry into Ethiopia

ETHIOPIA – The continuation of economic reform in Ethiopia after elections which were postponed to 2021 could open the door for Deutsche Bank, Kees Hoving, one of the bank’s new co-CEOS for Middle East and Africa told The Africa Report.

“Enhanced political stability subsequent to the election may lead many international institutions including Deutsche Bank to play a more active role in the country,” said Hoving.

The country is currently facing many challenges but has significant growth potential once the privatization strategy has fully kicked off,” he added.

Hoving and Loïc Voide were appointed co-CEOs for the Middle East and Africa in September and both will be based in Dubai.

Ethiopia whose banking sector remains closed to foreign investment has seen one of the world’s fast-growing economy of the last decade.

 Average annual growth in real terms has been 9.6% with over 75% of the country’s population of 112 million under the age of 34 with analysts saying that years of sustained growth are creating a burgeoning consumer class.

“The country is currently facing many challenges but has significant growth potential once the privatization strategy has fully kicked off”

Kees Hoving – co- CEO, Deutsche Bank Middle East & Africa

Deutsche Bank has been in close contact with Ethiopia for many years, says Hoving.

The bank was also chosen by Ethiopia to manage a sale of Eurobonds in 2014.

Hoving added that the bank has the ability to confirm letters of credit with somebanks in Ethiopia to enable corporate customers to trade.

There have been tentative signs of a liberalization with a law passed in 2019 to allow banking-sector investment from the diaspora.

 Last year also saw the first financial services license for a foreign company given to US-owned equipment finance firm Ethio Lease.

Still, high tariffs, infrastructure deficit and the difficulty of doing business remain constraints, say analysts.

“In Africa, the bank will continue to look for opportunities to support our international and local clients in addition to the development of local African economies and it might be easier if Africa had its own chief executive on the ground” he added.

 Dubai’s strategic location prompts Deutsche Bank to manage its African business from the United Arab Emirates, adds Hoving.

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