Economists and financial analysts have renewed calls for greater autonomy of the National Bank of Ethiopia (NBE) following the appointment of Eyob Tekalign (PhD) as its governor on September 19, 2025.<\/p>\n
The Prime Minister has brought in Eyob from the Ministry of Finance to succeed Mamo Mihretu as the 11th NBE governor. Mamo\u2019s resignation earlier this month to \u201cpursue other passions\u201d was the subject of much speculation.<\/p>\n
Sources contend the resignation followed disagreements with the PM on the implementation of IMF-backed reforms, particularly surrounding the issue of central bank autonomy and ending the practice of direct borrowing.<\/p>\n
Eyob leaves his post as a state minister of Finance to take the helm at NBE. He holds a postgraduate degree in political economy from the University of Maryland and a master\u2019s in international policy and business from George Washington University. He served as head of the National Planning Commission before joining the Ministry of Finance under the administration of Abiy Ahmed.<\/p>\n
Abdulmenan Mohammed (PhD), a seasoned financial analyst keeping a close eye on the Ethiopian finance sector, sees the appointment as an example of the executive\u2019s unchecked power over the central bank.<\/p>\n
\u201cThe governor should not be appointed by the executive; otherwise, the central bank risks being reduced to an institution that merely executes the agenda of the government,\u201d he told The Reporter<\/em>.<\/p>\n He stressed that genuine independence must be enshrined in law, as is the practice in many other countries. That is not the case in Ethiopia. The recently amended proclamation governing the NBE, as well as its predecessors, stipulate that the governor and the board of directors are directly accountable to the Prime Minister.<\/p>\n \u201cThey may claim operational independence, but real independence is absent,\u201d Abdulmenan said.<\/p>\n He also questioned Eyob\u2019s appointment, pointing out that the new governor has long been part of the government\u2019s executive structure\u2014as a member of the macroeconomic committee, a state minister of finance, and a member of Parliament representing Nekemte.<\/p>\n \u201cHe is not even remotely independent,\u201d Abdulmenan argued.<\/p>\n Looking back, he recalled that Ethiopia once appointed central bank governors with strong banking backgrounds, including Leikun Birhanu, Dubale Jale, Tadesse Gebrekidan, Tefera Degefe, and Legesse Tenkir.<\/p>\n \u201cBut in the past two decades, there has been a growing tendency to appoint politicians as governors, regardless of their banking experience,\u201d he said.<\/p>\n Abdulmenan observes that Eyob lacks direct banking experience.<\/p>\n \u201cHe worked at the Ethiopian embassy in the US and later became state minister of finance after the current Prime Minister came to power. Although he studied economics and worked at the Ministry of Finance, this does not necessarily mean he has specialized knowledge of financial economics, which is a highly technical field,\u201d he explained.<\/p>\n On monetary issues, Abdulmenan acknowledged that the new proclamation bans direct advances from the NBE to the government. Yet, he emphasized that the bank\u2019s ties with the executive branch remain strong.<\/p>\n \u201cThe NBE still influences interest rates and could pursue policies that stimulate an economic boom ahead of elections, directly benefiting the ruling party,\u201d he warned. \u201cState banks could also receive preferential treatment in supervision, and discount facilities could be used to channel cheap loans into government-favored sectors.\u201d<\/p>\n He also raised concerns about fiscal dominance, noting that Eyob\u2019s transition from the Ministry of Finance to the NBE blurs the line between fiscal and monetary policymaking.<\/p>\n \u201cNormally, fiscal and monetary policies are coordinated, but this raises fears that monetary policy will be subordinate to fiscal needs,\u201d he cautioned.<\/p>\n Still, he acknowledged Eyob\u2019s extensive involvement in Ethiopia\u2019s ongoing debt restructuring process as a useful asset.<\/p>\n Teshome Abebe (Prof.), an economist at Eastern Illinois University in the US, echoed Abdulmenan\u2019s call for central bank autonomy.<\/p>\n \u201cUnless the NBE is administered under an independent committee, there is always a risk that a single individual could order money printing or arbitrarily adjust interest rates\u2014both of which are disastrous policy decisions,\u201d he told The Reporter<\/em>.<\/p>\n Teshome argued that the success of the new governor will depend largely on institutional independence.<\/p>\n \u201cIn a market-led economy, central bank independence is essential. Without it, policies will inevitably be politicized, leading to unintended economic consequences,\u201d he said.<\/p>\n The expert recommended that the NBE be led by a committee of experienced experts with an independent economic perspective.<\/p>\n \u201cIf such a structure is in place, the bank will be able to build much-needed trust in the economy,\u201d he concluded.<\/p>\n In contrast, the president of a private bank expressed his optimism about Eyob\u2019s appointment.<\/p>\n \u201cI expect the national financial reform to be implemented strongly under Eyob, given his role in the macroeconomic team,\u201d said the executive, speaking anonymously. \u201cHe is likely to encourage healthy competition among banks, which could bring positive results for the economy.\u201d<\/p>\n The bank president acknowledged that central banking is new territory for Eyob but expressed confidence in his leadership qualities.<\/p>\n \u201cThe reforms are not personal initiatives but nationwide policies. The key issue is execution capacity, and I believe Eyob has that,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":" Economists and financial analysts have renewed calls for greater autonomy of the National Bank of Ethiopia (NBE) following the appointment of Eyob Tekalign (PhD) as its governor on September 19, 2025. The Prime Minister has brought in Eyob from the Ministry of Finance to succeed Mamo Mihretu as the 11th NBE governor. Mamo\u2019s resignation earlier […]<\/p>\n","protected":false},"author":72,"featured_media":47091,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"editor_plus_copied_stylings":"{}","ngg_post_thumbnail":0,"footnotes":""},"categories":[1960,13],"tags":[],"class_list":{"0":"post-47090","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-latest-news-in-ethiopia","8":"category-latest-ethiopian-political-news"},"acf":[],"_links":{"self":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts\/47090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/users\/72"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/comments?post=47090"}],"version-history":[{"count":0,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/posts\/47090\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/media\/47091"}],"wp:attachment":[{"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/media?parent=47090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/categories?post=47090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thereporterethiopia.com\/wp-json\/wp\/v2\/tags?post=47090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}