The Ethiopian Capital Market Authority (ECMA) has granted a landmark license to the Ethiopian Securities Exchange S.C. (ESX), laying the foundation for the country’s first securities exchange platform. This significant milestone is expected to revolutionize Ethiopia’s financial landscape, paving the way for sustainable economic growth and broadening investment opportunities.
In a move hailed as transformative for the country’s economy, the Ethiopian Securities Exchange will serve as a regulated platform for businesses and individuals to access capital markets and trade securities. The ECMA also approved the establishment of an Over the Counter (OTC) market, offering companies that do not meet the stringent listing requirements of the main exchange an alternative venue to trade their shares.
Speaking at the announcement, Ms. Hana Tehelku, Director General of ECMA, emphasized the importance of this development, stating: “The licensing of our first securities exchange marks a transformative milestone in our journey to establish a vibrant capital market. This achievement signifies the foundation of a robust capital market, enabling businesses to access sustainable financing and providing investors with new opportunities to grow their wealth.”
Ms. Tehelku underscored ECMA’s commitment to fostering transparency, integrity, and innovation in Ethiopia’s financial ecosystem. By facilitating the launch of the Ethiopian Securities Exchange S.C. (ESX), the regulatory authority aims to build a modern, inclusive, and well-regulated capital market that contributes to Ethiopia’s shared vision of economic prosperity.
The Ethiopian Securities Exchange Share Company is now the sole entity authorized to operate securities trading in Ethiopia. Designed to address the country’s evolving economic needs, the ESX aims to attract both local and international investors while supporting businesses of all sizes in their growth journeys.
The OTC market license adds another layer of inclusivity, allowing smaller companies and those unable to meet the main exchange’s listing requirements to participate in the capital market. This dual-approach model aligns with ECMA’s broader goal of fostering financial inclusion and accessibility, particularly for small and medium-sized enterprises (SMEs).
The establishment of the Ethiopian Securities Exchange is part of Ethiopia’s larger macroeconomic reform agenda initiated five years ago. This agenda aims to modernize the country’s financial infrastructure and attract foreign investment by enhancing investor confidence and promoting economic growth. With the ESX now licensed, Ethiopia joins the ranks of African nations with operational securities exchanges, signaling its readiness to embrace global financial standards.
The ECMA has urged the public to ensure that securities transactions are conducted through the licensed exchange to protect their investments. As the regulatory body overseeing the Ethiopian capital market, the ECMA will continue to prioritize investor protection, robust regulatory frameworks, and strategic initiatives to build a sustainable financial ecosystem.
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