Ethiopia’s plans to launch a stock market are taking shape, after the Ethiopian Securities Exchange (ESX) announced it had surpassed its capital-raising phase by over 200%.
- •ESX was founded in October 2023 and is set to be the country’s first fully fledged securities market.
- •Its founding shareholder is an investment arm of the Ethiopian government.
- •ESX initially aimed to raise US$11.07 million, but it announced on Thursday that it had obtained US$ 26.6 million.
The ESX kicked off in November 2023 with roadshows in Addis Ababa, Nairobi, and London. Among the 48 investors who subscribed to its capital raise include Ethiopia’s investment holding company, FSD Africa, The Nigerian Exchange Group (NGX), Trade and Development Bank, 16 domestic banks, and 12 insurance companies. The public sector will own a quarter of the bourse’s shareholding while private shareholders will take up the remaining 75%.
“Strategic foreign investments by TDB, FSD Africa, and NGX Group are particularly important in allowing the transfer of technical knowhow and best practices as well as other areas of long-term strategic value that we will explore,” Tilahun Esmael Kassahun, CEO of the ESX, said on Thursday.
Ethiopia’s Market Reforms
The strong investor interest in the ESX is driven by Ethiopia’s plans to either fully or partially privatise some of its state-owned enterprises, as part of plans to open up the country’s economy to foreign investments.
The country’s ongoing market reforms, which saw Safaricom set up its first subsidiary outside of Kenya in the country, have attracted local and foreign investors. But the reforms have been hampered by concerns about Ethiopia’s macroeconomic stability amidst major security issues.