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World Bank Says Ethiopia Needs To Open Its financial sector

World Bank Says Ethiopia Needs To Open Its financial sector

Ethiopia needs to open its financial sector in order to maintain the fast economic growth the country has registered for the last ten years, the World Bank said.

“There are some necessary risks, and financial integration is a necessary risk. Ethiopia currently does not have a financial sector that has integrated with the rest of the world,” HispanicBusiness.com quoted Director for the World Bank’s 2014 World Development Report, Norman Loayza.

“Other countries that have been growing at the same rate as Ethiopia have been able to sustain the level of growth only by integration. The question is how you manage the integration and that is where some of the lessons from international experiences can be used,” he added

He also stated that with the high growth rate the country is registering each year, it is inevitable that there will be an internal force that will look for this integration.

Loayza said the solution to Ethiopia’s development problems is not on only focusing on the agrarian economy, but actually looking forward and recognizing that with time and with economic growth, the economy will become more diversified. “Then there is a role for both the government and private sector to facilitate that process of diversification,” he added.

Ethiopia was placed 127th out of 174 countries for ease of doing business, in a 2013 World Bank report, nut its economic growth has maintained at above 8 percent in recent years helping it leapfrog Kenya as the fifth largest economy in Africa.

I come behind South Africa, Nigeria, Angola and Egypt.

“I think part of the solution is in how you integrate and how quickly. Do you just open immediately without any control? According to the International Monitory Fund’s (IMF) advice, it is to keep some control, at least initially,” said Kyla Wethli , a 2014 World Development Report Core Team member.