Ethiopia is in the middle of the biggest banking shake-up on the continent. In 2025 it opened its banking sector to foreign investors for the first time in about 50 years, through the Banking Business Proclamation 1360/2025. Open banking is not the immediate story here. The immediate story is a closed, state-dominated system being pried open, along with the data and capital rules that come with it.
For decades Ethiopia kept foreign banks out entirely. That changed with Proclamation 1360/2025 and National Bank of Ethiopia Directive SBB/94/2025, which from June 2025 allowed foreign banks to enter for the first time in roughly half a century. The framework permits up to five foreign banking licences over five years and caps foreign ownership of a bank at 49 percent. It is a deliberate, gated opening rather than a free-for-all, meant to bring in capital and competition while keeping control largely domestic.
The regulator is the National Bank of Ethiopia. Alongside the opening, it has moved to strengthen local banks first: the minimum paid-up capital requirement rises to 5 billion birr from July 2026, pushing consolidation and giving domestic banks a firmer base before foreign competitors arrive. For anyone thinking about data sharing, the detail that matters is Article 9 of the proclamation, a data-localisation rule that requires banking data to be stored inside Ethiopia. That single provision will shape how any future open banking or cloud-based model can be built here.
While the banks reorganise, most of the digital growth is in mobile money. Telebirr, launched by state-owned Ethio Telecom, scaled to tens of millions of users very quickly, and M-Pesa Ethiopia, run by the Safaricom-led consortium that entered the market, is building out a second large wallet. The Commercial Bank of Ethiopia still holds around half of all banking assets, so the system stays concentrated, but the mobile money layer is where new customers are being reached.
There is no open banking framework in Ethiopia, and it is not the priority. The sector is absorbing a once-in-a-generation structural change: new entrants, higher capital thresholds, consolidation, and a data-localisation regime that has to be worked through. Consent-based data sharing sits well behind those tasks. The groundwork that matters now is competition, capital, and the rules for where data can live, not APIs.
Ethiopia is worth watching precisely because the fundamentals are moving. A banking sector opening to foreign capital, a fast-growing mobile money market, and a clear data-localisation rule together decide the shape of any future open banking model. The country is not close to open banking, but the decisions being made now, especially on data and foreign participation, will set the terms when it eventually gets there.
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