Assessing the Adequacy and Clarity of Ethiopia's Legal Framework for Bank Mergers and Acquisitions

Abstract As Ethiopia undergoes significant economic reforms, bank mergers and acquisitions (M&A) have become crucial for strengthening its financial sector. However, the success of such transactions depends on a robust and clear legal framework. This critical review assesses the adequacy and clarity of Ethiopia's existing legal and regulatory framework for bank M&A. Employing a qualitative research methodology, this study combines a doctrinal analysis of primary legal sources (e.g., Banking Business Proclamation, Commercial Code) with an empirical analysis of semi-structured interviews and survey data from 27 experienced professionals in the Ethiopian banking and legal sectors. The research reveals significant deficiencies, including a lack of detailed procedural guidance, ambiguous provisions for minority shareholder protection, and insufficient clarity on the jurisdictional interplay between the National Bank of Ethiopia (NBE) and the competition authority. These findings show that legal uncertainty impedes M&A processes and deters investment. The study concludes that while the framework is currently undefined and inadequate, a comparative analysis with peer African nations (Kenya, Tanzania, South Africa) provides clear, actionable blueprints for reform. Targeted recommendations are offered to enhance the predictability, transparency, and efficiency of the M&A regime, fostering a more conducive environment for financial sector consolidation in Ethiopia.