Ethiopian PM launches country’s first-ever stock exchange

Ethiopia has officially launched its long-anticipated Securities Exchange (ESX), representing a significant milestone in the country’s ongoing economic reforms.

The inauguration was attended by Prime Minister Abiy Ahmed, who highlighted the importance of this initiative as part of Ethiopia’s strategy to liberalise its economy and attract private investment.

Situated in Addis Ababa, the exchange aims to modernise the financial landscape of Ethiopia and create new opportunities for capital generation.

The ESX is expected to enhance transparency, draw in international investors, and provide Ethiopian enterprises with the means to raise capital through share sales.

Approximately 90 companies, including state-owned entities like Ethio Telecom, are projected to join the exchange, with the telecom giant preparing for an initial public offering (IPO).

The establishment of the new stock exchange signifies Ethiopia’s re-entry into the capital markets, a sector that has remained inactive for decades since the closure of the former Addis Ababa Stock Exchange in the 1970s.

Through this initiative, Ethiopia aims to position itself as an appealing investment destination and stimulate economic growth by diversifying its funding sources.

In his address at the launch, Prime Minister Abiy Ahmed emphasised that the ESX would be instrumental in the country’s broader economic liberalisation efforts. “This exchange will assist us in diversifying our economy, attracting foreign investment, and empowering our private sector to compete on a global scale,” he stated.

Despite the enthusiasm surrounding the new stock exchange, experts have expressed concerns regarding potential challenges that may impede its success.

Financial analysts, including Mark Bohlund from Redd Intelligence, noted that while the launch is a promising development, issues related to liquidity and market depth could pose limitations.