National Bank of Ethiopia needs complete reform advises veteran economist

National Bank of Ethiopia needs complete reform


The former advisor at the National Bank of Ethiopia (NBE), who now calls the institution ‘money printing press’, urges the government to completely reform the regulatory body of Ethiopia’s financial sector.

Appointing someone with banking sector experience to lead NBE alone is not enough to solve the current financial and macroeconomic crisis in Ethiopia, according to Dr. Eyob Tesfaye, a veteran economist with over a decade experiences in state banks including NBE and the Commercial Bank of Ethiopia.

“The financial structure of the country has to be changed. It has to be structured in to meet what the Ethiopian economy demands. The policies have to be revised. And the institutions have to be run by independent professionals who are loyal to their conscious. They have to be clean from those white horses sitting in every office,” he said, on Tuesday at a forum organized by the Addis Ababa Chamber of Commerce and Sectorial Association in Addis Ababa.

Noting that his opinion does not necessarily reflect the views the organization he is currently working for – United Nations Capital Development Fund as senior program director, Dr. Eyob said that he is happy to openly talk now what he has been advising the decision makers, who didn’t listen to him while he was working at the NBE.

“NBE has been literally acting as money printing press. It was engaged in printing money to solve the macroeconomic problems caused by huge loan and aid. Since the economic growth is not creating jobs and the country is in shortage of foreign currency, the strategies should be revised and priorities should be identified. The macroeconomic situation of the country is spoiled. Privatization can’t take place under such a macroeconomic situation,” he said, stressing the need and urgency to resolve the current macroeconomic problems in Ethiopia.

Currently Ethiopia’s foreign loan has reached $26 billion.