Ethiopia now closer to getting own stock exchange

26 May, 2023 - 00:05 0 Views
Ethiopia now closer to getting own stock exchange

eBusiness Weekly

Ethiopia’s Ministry of Finance, the Ethiopian Investment Holdings and FSD Africa on Wednesday signed a cooperation agreement to establish the Ethiopian Securities Exchange (ESX).

Once established, the ESX will become the 30th exchange on the continent. At least fifty companies, including banks and insurance companies, are expected to list at the launch of the exchange.

The exchange is designed to provide a fundraising platform for small and medium-size enterprises, which are the backbone of the Ethiopian economy. The exchange will also offer a platform for the privatisation of Ethiopia’s state-owned enterprises.

In the past few years, the Ethiopian government has implemented several reforms to open the economy and the launch of a securities exchange will be a catalyst for attracting new investment from the private sector.

In a joint statement, the three parties said that through the Exchange, the Government of Ethiopia will be able to finance its budget deficits by issuing long-term bonds in local currency thereby reducing reliance on inflationary and foreign sources of budget financing.

Through the cooperation agreement, FSD Africa will fund technical support, legal advice, and the costs associated with getting the exchange operational.

“The establishment of a securities exchange, the first in our nation’s history, through such a public-private partnership will usher 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 H.E Ato Ahmed Shide, Minister, Ministry of Finance.

ASEA to link 7 African Capital Markets

Meanwhile, the African Securities Exchanges Association (ASEA) is moving closer to linking the African capital markets by facilitating cross-border trading and free movement of investments in Africa. Already, the African Exchanges Linkage Project(AELP) has onboarded 30 broker firms to facilitate cross-border trading.—Kenya Wallstreet


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