Kehali organizes its first Ethiopian banking forum

Kehali Strategic Advisory Services PLC, a recently established private companmy in Ethiopia, organized its first Ethiopian Banking forum in the capital, Addis Ababa.

The Forum was aimed to provide a platform where knowledgeable and experienced financial services industry professionals and leaders was held on May 21, 2022 at the Economic Commission for Africa conference center, according to the press statement shared by the organizer.

“…he forum created a platform where industry experts and stakeholders shared knowledge and experience’s as well as established business relationships to their mutual benefit. The forum was held in light of the recent announcement that the Ethiopian banking sector’s opening-up to foreign banks is immanent. In addition, the National Bank of Ethiopia has also recently mandated that all banks, insurance companies and microfinance institutions fully digitize their operations,” it said.

The statement stated that bank executives, industry experts along with other stakeholders discussed the future of the banking sector, business fundamentals, regulatory framework and competitive environment, the strategic implications/options for foreign banks seeking to enter the Ethiopian market, the partnership / competitive opportunities possible between local and foreign banks as well as the the benefits to the full range of consumers of banking products/services among others.

“Financial sector liberalization is expected to open the door to building Ethiopia’s financial infrastructure, a critical missing link in the development and growth of a large and vibrant private sector that can propel Ethiopia’s economic growth and development. It will change the Ethiopian economy by rebalancing the role of the state and the private sector, it will enable the optimal flow and allocation of domestic capital and pave the road for foreign portfolio investment which accounts for much of global investment flows.”

“Today, Ethiopia is one of a handful of countries in the world to not allow foreign banks and other financial market institutions to operate in their economies. In Ethiopia, the lack of appropriate capital is constraining the growth of profitable companies and businesses,” according to the statement.

“It is blocking entrepreneurs from taking risks and investing in potentially profitable and productive opportunities for local and export markets. Furthermore, financial inclusion and the development and availability of personal and consumer finance is well below comparable African and developing country levels.”

“Banking sector liberalization is a great first step in addressing these issues. Establishing a Capital Markets Authority and introducing such financial institutions, products and services as a stock exchange, investment banking, investment funds and the like is also another great step in the process of financial sector liberalization. Opening-up the insurance industry to foreign players should also not be neglected. Finally, however, without exchange rate liberalization, the economy’s foreign currency shortage will not be resolved and the potential benefits of financial sector liberalization will be severely diminished,” the statement said.

“The organizer Kehali is a strategic advisory firm which aims to fill an important gap in Ethiopia’s financial infrastructure – investment banking advisory services. Accurate, timely and credible business and economic information, analysis of market landscapes and business information, and key insights are necessary to optimally channel the economy’s capital and investment flows,” it said

“This critical piece of financial infrastructure provided by investment banking firms is a core component of market-based financial systems. In developed free market economies, investment banks provide the business, market and economic advisory services which drive informed investment flows.”

“The event included presentations on the strategic implications of the new financial sector developments, a talk from First Bank of Nigeria LTD on the opportunities of the financial sector in Ethiopia, as well as digital solutions from the world’s leading provider of such solutions – Whale Cloud – a subsidiary of Alibaba Group,” it said.

This forum also announced a major new collaborative initiative in the process of being formed between the Artificial Intelligence Institute and Whale Cloud to provide world leading digital solutions in Ethiopia and, amongst other things, address the technological challenges and opportunities facing Ethiopian banks, insurance companies and microfinance institutions,” according to the statement.