After a 50-year hiatus, Ethiopia has officially launched the Ethiopian Securities Exchange (ESX), marking a significant milestone in the country’s financial sector and investors’ participation.
Ethiopian Prime Minister, Abiy Ahmed, who carried out the official launch of the ESX on Friday declared in astatement: “In a historic step for our economy and financial system, we have officially rung the bell to launch Ethiopia’s securities exchange.”
According to him, this move is expected to accelerate economic growth and create a more structured investment environment.
However, Business Metrics clarifies that contrary to many report since Friday when the ESX went live, this is not Ethiopia’s first securities exchange.
Ethiopia had an earlier form of a stock market in the 1960s, but it ceased operations following the nationalization policies of the Derg regime in the 1970s.
The ESX is, therefore, a revival of Ethiopia’s capital market rather than a debut stock trading floor for the country.
With Ethiopia experiencing rapid economic growth, the launch of the ESX is expected to facilitate capital raising, with the ESX providing Ethiopian businesses with an organized platform to issue stocks and bonds, helping them attract investors.
Hope Economic Boost
The ESX is also expected to encourage private investment as Ethiopian and foreign investors will now have more opportunities to participate in the country’s economic progress.
The ESX will also boost economic growth by improving liquidity, encouraging savings, and strengthening financial institutions.
The Ethiopian authorities are also counting of the Exchange to enhance market transparency through regulated trading and financial disclosures to increase investor confidence and corporate accountability.
Meanwhile, Ethiopia’s financial future looks promising, and Prime Minister Abiy Ahmed has urged investors to participate in the stock exchange.
“As Ethiopia lays the foundation for long-term financial stability and growth, we invite investors to seize this opportunity and help build a strong capital market,” he said.
With this launch, Ethiopia is taking a decisive step towards integrating with global financial markets and strengthening its financial ecosystem.
The success of the ESX will depend on active participation from businesses, investors, and financial institutions, paving the way for a more dynamic and resilient economy.
Economic Facts
With about 126.5 million people (2023), Ethiopia is the second most populous nation in Africa after Nigeria, and one of the fastest-growing economies in the region, with an estimated 7.2% growth in full year 2022/23.
However, it also remains one of the poorest, with a per capita gross national income of $1,020. Ethiopia aims to reach lower-middle-income status by 2025.
According to data from the United Nations, the economic growth of the country is projected at 6.7% during 2024–25 due to fiscal consolidation.
Although the UN had also forecast a slowdown in investment due to protracted debt restructuring negotiations, the return to the capital after 50 years may give fillip to economic performance of the country.
