Fie Insights

Role of capital markets in developing economies Capital markets are key drives of economic growth as they help facilitate the demand and supply of credit. Through the capital markets governments and the private sector can access funding for infrastructure financing or large capital expenditures in the case of large corporations. Capital markets can also be...

Financial sector liberalization committee & Council of Ministers Draft Policy In early 2022, the Ethiopian government set up a committee that would be responsible for replacing the current financial services code with a new one that allows more liberalization; specifically, one that allows for the entry of foreign banks. This was in response to banks...

The Ten-Year Growth Plan (Master Plan) Ethiopia developed the ten-year development plan (2020/21 – 2029/30) that aims to position the country as the ‘African Beacon of Prosperity’.  This is a successor to the five-year growth and transformation plan-II (GTP II) and it focus on six strategic pillars that include: Private sector leadership in the economy....

Risk free rates (RFRs) represent the cost of borrowing that a borrower would incur without the lender taking into consideration the counterparty risk level of the borrower. They indicate the return that investors should get on zero risk investments and are used by the financial markets as a benchmark upon with risk premiums are added....

The LIBOR rate was believed to be a true reflection of the markets’ cost of borrowing funds independent of government interference. However, investigations by regulators and journalists after the financial crisis revealed that LIBOR had been manipulated by the banks themselves and at times from influence of regulators. Banks had an interest in keeping the...

Digital technology and the adoption of the internet continues to bring in structural changes to all segments of the economy; and the financial services space has not been spared. Traditional banking processes have been completely transformed, with the relevance of banking halls in the future being questioned. Banks have jumped on the digitization trend by...

Cross boarder payments are crucial to enable movement of goods and services between the transacting parties. One of the major segments in finance that facilitates this is correspondent banking. Correspondent banking is a context where one bank provides services in a particular region to another bank that may not have physical presence within that area....

In 2019, intra African trade was valued at $69 billion accounting for 15% of Africa’s total trade in that year. The Africa Continental Free Trade Agreement (AfCFTA) aims to boost intra African trade. One of the tools that the AfCFTA have come up with in collaboration with Afreximbank to facilitate free flow of money between...