KEYIR NEWS - The governor of National Bank of Ethiopia, Mamo Mihretu, announced on Wednesday that he is leaving government service, bringing to a close a tenure marked by sweeping reforms in the country’s financial sector.
His departure raises questions about the next phase of the economic liberalisation, which has been a central feature of Prime Minister Abiy Ahmed’s administration since 2018.
Mamo, who was appointed governor of the National Bank of Ethiopia (NBE) in January 2023, confirmed his exit in a statement posted on X, formerly Twitter.
“I am leaving government after seven years in various roles, to pursue other passions and tackle new challenges,” he said.
It remains unclear whether his departure was voluntary or requested by the government.
During his time at the helm of the NBE, Mamo spearheaded key reforms intended to modernize the tightly controlled financial system. These included granting the central bank greater institutional independence, opening the financial sector to foreign banks for the first time in the country’s history, and negotiating external financing worth $10.5 billion.
The decision to allow foreign banks into Ethiopia represented a significant policy shift, aimed at injecting competition and efficiency into a banking industry long dominated by state and local private banks.
Supporters argued that the reform would bring capital, innovation, and expertise, while critics expressed concern about the vulnerability of domestic institutions.
Another major policy under Mamo’s leadership was the flotation of the Ethiopian birr. The move was designed to stabilize the currency and align Ethiopia’s exchange rate with market realities, but it also brought short-term pain, including inflationary pressures and rising costs of imported goods.
Mamo’s resignation comes as Prime Minister Abiy Ahmed’s government continues to push forward with economic liberalization. Since taking office in 2018, Abiy has sought to transition Ethiopia from a state-driven model to a more open and competitive economy.
Key elements of this agenda include the privatization of major state-owned enterprises, reforms in the telecommunications and logistics sectors, and efforts to attract foreign investment.
The central bank has been pivotal to this strategy, playing a balancing role between introducing reforms and managing the risks of inflation, debt, and foreign exchange shortages.
Analysts suggest Mamo’s departure could slow the momentum of some initiatives, depending on who is appointed as his successor and how committed the government remains to financial sector liberalization.
The Prime Minister’s office has not issued a statement regarding Mamo’s exit, fueling speculation about whether the decision was connected to internal disagreements over the pace and scope of reforms.
The economy remains under strain, grappling with high inflation, a shortage of hard currency, and the lingering effects of recent conflicts.
Mamo’s departure adds another layer of uncertainty at a time when Ethiopia is negotiating with international lenders, including the International Monetary Fund (IMF), for support to stabilize its economy.
His record of securing external financing has been seen as a critical achievement, and stakeholders will be watching closely to see if the country can maintain donor confidence in his absence.
For Mamo Mihretu, the resignation marks the end of seven years in government service, during which he served in multiple high-level positions before becoming central bank governor. While he did not disclose his next steps, he hinted at pursuing personal passions and new challenges outside government.
For Ethiopia, the focus now shifts to the appointment of a new central bank governor and whether the successor will continue Mamo’s reform trajectory. The coming months will be crucial in determining whether Ethiopia can sustain the momentum of economic liberalization while managing the immediate social and economic pressures facing its citizens.
As the country waits for clarity, Mamo leaves behind a mixed but significant legacy—one that reshaped Ethiopia’s financial landscape and set the stage for its integration into the global economy.
By Keyir News Staff Writer