The priciple of corporate governance in the Ethiopian financial sector- a commentary

The financial sector of every economy accounts to half or even two third of the economy of a country. Despite almost two decades of deregulation and privatization in Ethiopia, the private sector still lives in the state’s shadow and has relatively limited access to finance and markets. The private sector firms in Ethiopia usually have close ties with the state sector and prosper on the peripheral of the state sector. They are not only influenced by state sentiment but also have to budget their capital expenditure or production schedules accordingly. As a means to protect and ensure the expansion of the financial sector, states come up with the concept of corporate governance and other quality principles to the efficient management of the various segments of the financial sector. Among other problems, the reliance on corporate governance has been dictated by economic crisis and financial depreciation faced by states on numerous occasions, which in turn required states to develop the financial sector by assuring transparency and accountability in corporate governance. This article will discuss the major laws and principles of corporate governance enshrined in the Ethiopian financial sector.