Country

Overall project value

Proportion carried out by legal entity (%)

No of staff provided

Name of client

Origin of funding

Dates (start/end)

Ethiopia

USD 140,000

100

7

Ministry of Trade and Industry (MoTI)

World Bank

01/2007 – 04/2007

Detailed description of project

Type of services provided

The objective of the study was to assess the likely economic and social impact of liberalizing the financial sector in Ethiopia in the context of GATS, thereby supporting the accession of Ethiopia to the World Trade Organization by helping policymakers prepare to negotiate financial services commitments and prepare an Action Plan.  The study achieved this objective by assessing the range of potential impacts of opening the economy to trade in financial services, by identifying reforms which may help prepare the financial sector for reforms likely to emerge from GATS negotiations, and by improving communication between MoTI, which is coordinating WTO accession, and financial sector stakeholders.

Activities included:
  • Analysis of the current economic situation of the financial services sector, distinguishing between banking (including microfinance) and insurance services.
  • Analysis of the Government’s financial policy and recent reforms in order to identify its strategic aims regarding the financial sector and its role in the Ethiopian economy.
  • Description of the current legal and regulatory environment for financial services.
  • Direct impact of WTO accession on the Ethiopian financial services sector as a result of specific commitments in the financial services sector and the subsequent potential entry of foreign suppliers into the market;
  • Quantitative impact assessment (cross-country quantitative analysis of the impacts of financial liberalization on financial intermediation; investigation of the determinants of performance of Ethiopian banks);
  • Development of policy recommendations and an action plan for the implementation of financial sector reform policies that are recommended to be completed prior to WTO accession.
  • Economic analysis of financial services sector
  • Analysis of the Government’s financial policy and recent reforms
  • Description of current legal and regulatory environment for financial services
  • Analysis of impact of WTO accession on financial services sector
  • Quantitative impact assessment
  • Development of policy recommendations and action plan