NAIROBI, Jan 22 (Reuters) - South Africa’s Standard Bank aims to open a representative office in Ethiopia by the end of March, joining others eyeing a fast growing African economy although foreigners are barred from offering commercial banking services there.
The office will provide a foothold for the South African bank to build relationships with local businesses and develop market intelligence to help advise clients interested in investing in Africa’s second most populous country.
It will not offer commercial banking services, such as taking deposits or lending, as only Ethiopian state-owned or private institutions are allowed to run such operations.
“We are looking to open up a representative office, hopefully by the end of March this year,” Taitu Wondwosen, a senior vice president at Standard Bank who will become the representative, told Reuters.
“We go where our clients are. More and more of our clients are starting to ask about Ethiopia,” said Wondwosen, whose bank has operations across the continent. “It just makes sense to for us to start to get to know Ethiopia.”
Ethiopia, a market of about 96 million people whose agriculture-dependent economy has been growing at 8 percent or more a year, has been heavily investing in new roads, railways and power plants to attract manufacturers and other investors.
Foreigners are restricted from areas such as banking and telecoms, but Ethiopia offers attractions because of its new infrastructure and as labour and other costs in Asia and elsewhere rise.
Wondwosen said clients and potential investors had shown interest in manufacturing, such as the textile industry, construction and infrastructure work, as well as other areas.
Ethiopia put itself on the international investment map last year with a debut Eurobond, raising $1 billion. The 10-year issue in December was oversubscribed. The country is rated B1 by Moody’s and B by Standard & Poor‘s.
Wondwosen said Standard Bank would be interested in offering a broader range of services but added: “In the short term, we are under no illusion that it is going to remain closed.”
Others institutions with representative offices include Germany’s Commerzbank, pan African lender Ecobank , Export-Import Bank of India, National Bank of Egypt and Bank of Africa. (Editing by Vincent Baby)