Experts Call For Independent NBE As Eyob Takes Governor’s Seat

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’s resignation earlier this month to “pursue other passions” was the subject of much speculation.

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.

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’s 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.

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’s unchecked power over the central bank.

“The 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,” he told The Reporter.

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.

“They may claim operational independence, but real independence is absent,” Abdulmenan said.

He also questioned Eyob’s appointment, pointing out that the new governor has long been part of the government’s executive structure—as a member of the macroeconomic committee, a state minister of finance, and a member of Parliament representing Nekemte.

“He is not even remotely independent,” Abdulmenan argued.

Looking Back, He Recalled That Ethiopia Once Apfoined Central Bank Governors with Strong Banking Backgrounds, including Leikun Birhanu, Dubale Jale, Tadesse Gebrekidan, Tefera Degefe, and Legesse Tenkir.

“But in the past two decades, there has been a growing tendency to appoint politicians as governors, regardless of their banking experience,” he said.

Abdulmenan observes that Eyob lacks direct banking experience.

“He 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,” he explained.

On monetary issues, Abdulmenan acknowledged that the new proclamation bans direct advances from the NBE to the government. Yet, he emphasized that the bank’s ties with the executive branch remain strong.

“The NBE still influences interest rates and could pursue policies that stimulate an economic boom ahead of elections, directly benefiting the ruling party,” he warned. “State banks could also receive preferential treatment in supervision, and discount facilities could be used to channel cheap loans into government-favored sectors.”

He also raised concerns about fiscal dominance, noting that Eyob’s transition from the Ministry of Finance to the NBE blurs the line between fiscal and monetary policymaking.

“Normally, fiscal and monetary policies are coordinated, but this raises fears that monetary policy will be subordinate to fiscal needs,” he cautioned.

Still, he acknowledged Eyob’s extensive involvement in Ethiopia’s ongoing debt restructuring process as a useful asset.

Teshome Abebe (Prof.), an economist at Eastern Illinois University in the US, echoed Abdulmenan’s call for central bank autonomy.

“Unless 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—both of which are disastrous policy decisions,” he told The Reporter.

Teshome argued that the success of the new governor will depend largely on institutional independence.

“In a market-led economy, central bank independence is essential. Without it, policies will inevitably be politicized, leading to unintended economic consequences,” he said.

The expert recommended that the NBE be led by a committee of experienced experts with an independent economic perspective.

“If such a structure is in place, the bank will be able to build much-needed trust in the economy,” he concluded.

In contrast, the president of a private bank expressed his optimism about Eyob’s appointment.

“I expect the national financial reform to be implemented strongly under Eyob, given his role in the macroeconomic team,” said the executive, speaking anonymously. “He is likely to encourage healthy competition among banks, which could bring positive results for the economy.”

The bank president acknowledged that central banking is new territory for Eyob but expressed confidence in his leadership qualities.

“The reforms are not personal initiatives but nationwide policies. The key issue is execution capacity, and I believe Eyob has that,” he said.