Ethiopia’s Capital Market: Entering a New Chapter as PM Abiy Officially Rings Bell to Launch ESX

ddis Ababa January 10/2025 (ENA)—The highly anticipated Ethiopian Securities Exchange (ESX) has now been officially launched, considered as an important move to see a vibrant capital market ecosystem in the East African nation.

In the early hours of Friday afternoon on 10^th January 2025, Prime Minster Abiy Ahmed has officially rung the bell to launch Ethiopian Securities Exchange.

“In a historic milestone for our economic and financial landscape, we have officially rung the bell to launch the Ethiopian Securities Exchange - the first stock exchange for our country,” the Prime Minister stated at the occasion.

This bell has been marking a historic milestone in Ethiopia’s economic transformation and becoming a revolutionary step for Ethiopia’s financial sector.

Historically, it was the era of Emperor Haile Selassie when the effort to establish capital market started. Unfortunately, the capital market introduction endeavors had been aborted and it wouldn't come to fruition due to the socialist regime, the  Derg came to power.

Thus, the ESX, which has received regulatory approval from the Ethiopian Capital Market Authority (ECMA), is now the country’s sole platform for securities trading through aligning with the broader macroeconomic reforms of Ethiopia.

As this new stock market is part of Prime Minister Abiy’s aspiration, the official launching of ESX would accelerate the country’s ongoing efforts to modernize its financial systems and support sustainable economic growth.

And many are describing the measure as a game-changer for Ethiopia and the region as well as the African continent at large.

Ethiopia is the third largest economy in Sub Saharan Africa, with a projected growth rate of 8.45% for the coming year. This impressive trajectory positions Ethiopia amongst the fastest growing economies in the region, driven by ambitious economic reforms, strategic investments and an increasingly vibrant private sector.

A key milestone in this journey is Ethiopia's recent establishment of its capital market, particularly Ethiopian Securities Exchange. Practical response has tremendously marked a significant step towards modernizing the country's financial sector by driving economic transformation and attracting investments.

It is imperative to mention here the Prime Minister Abiy Ahmed’s speech what he has given confident to global and domestic investors to engage in this sphere. He called them to invest in Ethiopia—a fast-growing economy with immense potential and a dynamic trajectory toward prosperity.

Currently, the African continent’s policy makers are increasingly recognizing the importance of setting up domestic capital markets, particularly to propel economic development and to finance priority sectors. Most importantly, capital market is also being prominent in agenda 2063 where, as part of efforts to increase domestic resource mobilization and expansion of capital markets across the continent.

Evidently, Ethiopia as the seat of the continental organ, African Union and the anchor nation, has been undergoing that process of setting up the Ethiopian capital markets.

And recently, the country has proved its leading role through officially ringing the bell to the launch of Ethiopian Securities Exchange.

In her recent interview, Director General of Ethiopian Capital Market Authority (ECMA), Hana Tehelku the capital market really resonates with the current government's idea of private sector led economic development. For her, this has been happening through resilient capital market, resilient economy, sustainable economy, a financial inclusion, because capital market is a great tool of financial inclusion.

As a result, she Sid Ethiopian Securities Exchanges was established by public-private partnership (PPP) and that shows the commitment of the government to establish the capital market. On the other hand, this demonstrates the confidence of the private sector with prospect of the capital market in Ethiopia, hana revealed.

All in all, the launch of the ESX has now become a groundbreaking in Ethiopia’s broader vision of becoming a regional financial hub. It is also a critical step in attracting foreign investment, and promoting the development of a dynamic capital market that supports businesses, individuals, and the nation’s prosperity aspiration.