Ethiopia Rings In ‘New Era’ With Launch Of First Stock Exchange In Over 50 Years

The exchange’s ownership structure mandates that up to 25% of the shares be held publicly, while the remaining 75% is reserved for private investors.

Ethiopia made history on Friday with the launch of its first securities exchange in over five decades.

The Ethiopian Securities Exchange (ESX) debuted with a single listed company, Wegagen Bank, marking a significant milestone in the country’s economic liberalization efforts.

The socialist military government abolished the securities exchange in 1974.

After ringing the launch bell, Prime Minister Abiy Ahmed tweeted, “Invest in Ethiopia — a fast-growing economy with immense potential and a dynamic trajectory toward prosperity.”

The ESX is expected to operate from 9AM to 3PM, and its chief executive, Tilahun Kassahun, anticipates that 90 companies will join the exchange within the next decade.

Ethiopia Investment Holdings (EIH), which controls 40 state-run companies, will play a crucial role in developing the market. The state-run company is already offering shares for the Ethio Telecom offer.

“Today marks the beginning of a new era for Ethiopia, where capital can flow freely to unlock opportunities,” Kassahun said at the opening ceremony.

In April 2024, the ESX established October 2023, concluded its capital-raising exercise, achieving more than double the funds needed to commence operations.

Through a public-private partnership, the ESX has the EIH as its founding shareholder, representing the government’s interests.

As of April 2024, key investors included entities such as FSD Africa, the Trade and Development Bank Group (TDB), and the Nigerian Exchange Group Plc (NGX Group).

Also, 16 domestic private commercial banks, 12 private insurance companies, and 17 other private domestic investors have also invested in the exchange.