An Overview of Ethiopia’s National Bank New Strategic Plan 2023-2026

The National Bank of Ethiopia (NBE) has recently released its Strategic Plan for 2023–2026. This strategic plan aims to address the challenges faced by the Ethiopian economy and set a direction for the central bank’s activities. With a focus on stability, financial inclusion, and technological advancements, the NBE aims to create a favorable environment for economic growth and development.

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The strategy focuses on tackling the existing gaps and challenges in the market and achieving several goals, such as low and stable inflation, an increase in foreign exchange reserves, addressing the wide gap between official and parallel market rates, introducing a modern price-based system for monetary policy implementation, and establishing a well-functioning inter-bank foreign exchange market.

It also recognizes the need for building strong regulatory and supervisory systems for a sound financial sector, encouraging innovation in the financial sector to serve a broad range of end-clients and promote financial inclusion, fast, simple, and secure payment mechanisms, and digitization in the financial system, development of capital markets to broaden financing sources, and nurturing NBE’s internal capacities.

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Key initiatives include transitioning to a price-based monetary policy using interest rates, expanding the financial sector to include foreign investment, operationalizing the capital markets, and modernizing internal operations to enhance transparency and research capabilities.

The Strategic Plan has five objectives: price and external stability, financial stability, broadening financial inclusion, operational excellence, and enhanced governance systems.