Ethiopia’s commercial banks to raise savings by 30 percent

Copyright : APA

The National Bank of Ethiopia is set to make all commercial banks raise their savings by 30 percent over the coming five years. The bank announced the plan on Friday while unveiling its five-year strategic plan Friday in Addis Ababa.

The plan envisaged raising the contribution of domestic savings to 29.5 percent at the end of the country’s second five-year Growth and Transformation Plan (GTP-II) period to be realized over the coming five years.

The national bank recently ordered private commercial banks to raise their savings by 30 percent, which currently stands at $18 billion.

In addition to boosting their financial capacity, the banks should double their branches by registering 25 percent annual growth. Currently, there are 2,868 branches across the country, Vice Governor of the National Bank of Ethiopia, Yohannes Ayalem told APA.

Yohannes said insurance companies are also expected to increase their premium by 30 percent.

Ethiopia secured $15.4 billion from export in the past five years but spent $60.9 billion to import goods. The five-year strategic plan focuses on balancing the difference between export and import trade.

Currently, the country has $3.2 billion reserve that is enough to import goods for two and half months. The five year plan envisaged raising the reserve for three months.