
Ethiopia has officially launched its first securities exchange in over five decades, marking a transformative moment in the country’s economic landscape. The Ethiopian Securities Exchange (ESX) opened on Friday with a single listing, Wegagen Bank, and plans to expand to include up to 90 companies within the next decade, according to ESX CEO Tilahun Kassahun. Prime Minister Abiy Ahmed, a driving force behind Ethiopia’s economic liberalization, led the launch and invited both local and foreign investors to explore opportunities in the growing market.
The ESX represents a step toward modernizing Ethiopia’s financial system and fostering a vibrant capital market. It is part of a broader initiative to open up Ethiopia’s traditionally state-dominated economy. Prime Minister Abiy Ahmed highlighted the potential of Ethiopia’s economic framework, referencing the country’s achievements, such as operating Africa’s largest airline and telecom company, and building the continent’s largest hydroelectric dam.
The securities exchange has been set up as a private-public partnership, with 75% of the ownership allocated to private investors and 25% reserved for public shareholding. Ethio Telecom, the state-owned telecommunications company preparing for an initial public offering, is widely expected to list on the exchange in the near future.
This move comes as Ethiopia seeks to create a platform for trading equity and debt instruments, offering opportunities for both domestic and international investors. The Ethiopian government has emphasized that the establishment of the exchange followed extensive research, institutional preparations, and legislative reforms to ensure its success.
Ethiopia’s economy, historically reliant on agriculture and exports like coffee and gold, has been undergoing reforms to attract foreign investment and diversify revenue streams. Last year, the government floated its currency, a decision supported by international financial institutions but criticized for contributing to inflation and higher costs of living. The establishment of the ESX is part of a series of liberalization measures, including opening the retail sector to foreign investors and granting Ethiopia’s first private telecom license to Kenya’s Safaricom in 2021.
Despite the launch, challenges remain. Ethiopia continues to grapple with security issues in regions like Amhara and Oromia, as well as recovering from a devastating civil war in the Tigray region. Kibur Gena, an Ethiopian economist, emphasized the importance of ensuring peace and stability to attract foreign investors. He also called for a gradual and strategic approach to building institutions and regulatory frameworks around the stock exchange.
Critics have raised concerns about the readiness of Ethiopian companies to meet international financial reporting standards. Mark Bohlund, a senior credit analyst, noted that Ethio Telecom is one of the few companies that might meet the requirements to attract foreign investors.
Nevertheless, Ethiopian investors have expressed optimism about the ESX, viewing it as an opportunity for local stakeholders to participate in the nation’s economic development. Henok Assefa, founder of Precise Consult, hailed the move as a way for Ethiopians to become true shareholders in major enterprises.
The establishment of the Ethiopian Securities Exchange signals the country’s commitment to creating a modern financial ecosystem while navigating the complexities of economic and political reform. Its success will depend on sustained efforts to build trust, stability, and transparency within Ethiopia’s growing economy.
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