Ethiopia Unveils Historic Stock Exchange, Redefining Its Financial Landscape
(EPICSTORIAN) – Ethiopia has officially inaugurated its first stock exchange named the Ethiopian Securities Exchange (ESX), marking a transformative step in its economic and financial landscape.
After years of advocacy and preparation, the ESX opened its trading floor on Friday, according to the country-based media, The Reporter. This historic milestone is set to reshape the nation’s economy, which has long struggled with limited access to finance.
Economists, investors, and financial experts have praised the move, calling it a game-changer for Ethiopia’s capital markets.
“The Ethiopian Securities Exchange will transform the financial ecosystem of our nation. It represents a giant leap towards economic liberalization,” said Prime Minister Abiy Ahmed during the inauguration ceremony.
Derg Regime Frustrated Efforts to Establish Ethiopia’s first Stock Exchange
Ethiopia, despite being one of Sub-Saharan Africa’s largest economies, has been without a secondary market since the socialist Derg regime abolished its rudimentary securities exchange. Efforts to establish a modern stock market gained momentum only after the 2018 political reforms, which opened the door to economic liberalization.
The Ethiopian Capital Market Authority, established during the reform period, spearheaded the development of institutional and legal frameworks for the stock exchange. Over two-and-a-half years of meticulous groundwork culminated in the delayed but successful launch of the ESX.
Tilahun Kassahun, CEO of the Exchange, highlighted the critical role of reforms in making the exchange a reality. “The economic and digital advancements of recent years, including the National ID system, laid the foundation for this historic launch,” he noted.
ESX Offers Trading Opportunities for Ethiopians
The ESX is designed to host a wide range of financial instruments, including shares, equities, and debt securities. Banks, state-owned enterprises (SOEs), and other eligible companies are expected to list on the exchange, offering unprecedented investment opportunities.
Wegagen Bank has already become one of the first entities to offer equity on the platform, sources revealed. Ethio Telecom’s 10% stake offering is also slated to debut on the ESX, alongside other state enterprises under the Ethiopian Investment Holdings (EIH).
Regulators have digitized existing equity and stock records to ensure real-time accessibility on the ESX platform. The exchange is Sharia-compliant, featuring products like sukuk, making it the third-largest Sharia-compliant stock exchange in Africa.
Potential for Economic Growth
Officials have ambitious goals for the ESX, targeting at least 90 initial public offerings (IPOs) in the coming years. This platform will enable over 400,000 shareholders in the banking sector to trade shares freely, potentially unlocking significant liquidity in the market.
“Our aim is to replicate the success of stock exchanges in Nigeria and Egypt, reaching those milestones in record time,” said Tilahun Kassahun confidently.
Debt securities, previously limited to treasury bonds issued by the National Bank of Ethiopia (NBE), will also be available for trading. This diversification is expected to attract domestic and international investors, further fueling Ethiopia’s economic growth.
An Unprecedented Ceremony
The launch ceremony, organized by the Office of the Prime Minister, was a private event attended by senior officials, including Prime Minister Abiy Ahmed. Media coverage was restricted, and attendees were prohibited from taking photos or videos.
In a social media post following the event, the Prime Minister stated, “In a historic milestone for our economic and financial landscape, we have officially rung the bell to launch the Ethiopian Securities Exchange. Invest in Ethiopia, a fast-growing economy with immense potential and a dynamic trajectory toward prosperity.”
He reassured potential investors, emphasizing the government’s commitment to ensuring the stock exchange’s success. “The government has giant state enterprises ready to drive this market. Serious preparations have been made to avoid any chance of failure,” Abiy added.
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With robust preparations, digitization, and regulatory frameworks in place, the Ethiopian Securities Exchange is poised to become a cornerstone of the nation’s economic transformation, one of the officials at the groundbreaking ceremony added.
