Ethiopia seems to be on the final lap in the creation its securities exchange after its initial finalization announcements in 2020. The Ministry of Finance of Ethiopia, the new state enterprise Ethiopian Investment Holdings (EIH), and FSD Africa signed a cooperation agreement to establish the Ethiopia stock exchange(ESX). Fifty companies including insurance companies and banks, are expected to list at the launch of the exchange.

“The establishment of a securities exchange, the first in our nation’s history, through such a public-private partnership will usher in a new era for the Ethiopian financial industry and the economy as a whole. Today’s cooperation agreement between the Ministry of Finance, EIH, and FSD Africa is a first concrete step towards realizing our vision,” said Ahmed Shide, Minister of Finance after the signing ceremony.

FSD Africa, a 35 million pound financial sector development program based in Nairobi, through the signed agreement, will fund almost all aspects to ensure the full functioning of the exchange.

Ethiopia has not had any operational capital markets for a long time in spite of it being among the biggest five economies in Sub-Saharan Africa. Since the abolition of Addis Ababa Share Dealing Group which existed almost half a century ago by the then military government, successive attempts to put in place a capital market have bore little fruit until now.

“The Ethiopian Securities Exchange will provide issuers and investors unique and unseen access to capital markets, promoting efficient capital allocation and utilization. In support of Ethiopia’s ambitious economic development agenda, the exchange will ensure that much-needed capital is availed to businesses, entrepreneurs, and young innovators across Ethiopia. For the first time in the history of our nation, all Ethiopians will have access to long-term finance to build sustainable businesses, create much-needed jobs and be a part of the country’s economic prosperity,” said Mamo Mihretu, CEO, Ethiopian Investment Holdings

Created in 2012, Financial Sector Deepening Africa (FSD Africa) is a regional platform and market facilitator that applies a combination of expertise, research and resources to address financial market failures. It has the mandate to work across sub-Saharan Africa on issues that relate to both finance for growth and financial inclusion

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