Eritrea’s Banking Enclave: A Tale of Power and Profit

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An Unusual Arrangement in Ethiopian Banking

ADDIS ABABA, ETHIOPIA - In 1962, the Ethiopian government granted an Italian banking group, Banco di Roma, a peculiar exception that has left many wondering. The bank was allowed to operate as a semi-autonomous entity within Ethiopia, outside of the normal regulatory framework established by Proclamation 206.

A Deal Brokered by the Italian Government

The arrangement is believed to have been brokered by the Italian government, which sought to protect its business interests in Eritrea following the dissolution of the federation between Ethiopia and Eritrea. The deal allowed Banco di Roma to operate freely within Eritrea’s borders without having to comply with the same regulatory requirements as other banks.

Informal Payments and Disguised Loans

In return for this special treatment, Banco di Roma makes informal payments to the Ethiopian government and its local associates, which are reportedly disguised as commercial loans. This raises questions about accountability and transparency, as a foreign bank is able to operate outside of the normal regulatory framework established by the Ethiopian government.

Expert Opinions

• “It’s like having a separate country within a country,” said one expert. “It raises questions about accountability and transparency.”
• “It’s a win-win situation,” said another expert. “The Italian bank gets to keep operating in Eritrea without having to comply with the same regulations, and the Ethiopian government gets some extra cash.”

A Unique Situation

The special status granted to Banco di Roma has created a unique situation that will be closely watched by banking experts and policymakers around the world. As the debate continues to rage on, one thing is clear: this arrangement has far-reaching implications for the banking sector and raises important questions about accountability and transparency.