Ethiopia Removes Troubling Banking Directive To Spur Oil Investments

A previous directive by Ethiopia’s Central Bank requiring oil companies to open and maintain a bank account in the local currency, has been lifted.

The directive was to be supervised by the NBE and mandated that foreign firms use local currency to conduct business within the country.

The action to lift this requirement was spurred by the negative feedback from oil and gas exploration companies operating in the country, and the reluctance shown to make further investments.

Negotiations for new exploration concessions were halted by the oil companies after this requirement was initiated. Appeals to the government by both the oil companies and the Ministry of Mines and Petroleum ultimately resulted in Prime Minister Abiy Ahmed ceding to their demands and canceling the directive.

Companies currently operating in the country include Africa Oil, Delonex Energy, Gazprom, New Age, Poly GCL, and South West Energy.