According to Professor Israel Kodiaga, an Economist and Director General for African Affairs at Global Unification International, the Ethiopian Securities Exchange (ESX), as it is now known, represents a significant step in the government’s efforts to liberalise the economy and build a robust capital market ecosystem. This is the first Stock Exchange Ethiopia has had since the fall of Emperor Haile Selassie in 1974.

 Ahmed described the launch of the ESX as a key achievement that will drive economic growth, attract investment, and promote financial inclusion for Ethiopians. The initiative is part of broader reforms aimed at moving the country from state-controlled systems towards a more market-oriented approach, positioning Ethiopia alongside other growing economic powers on the African continent.

Kodiaga called the launch of the ESX a “watershed moment” for Ethiopia, noting that the country had not had a Stock Exchange for over 50 years. Historically, Ethiopia has operated under centralised economic policies, but the opening of the ESX signifies a shift towards market liberalisation, offering significant opportunities for growth. Companies can now raise capital by issuing shares, which can be used for expansion, innovation, and development.

“The Stock Exchange opens up investment opportunities for both domestic and international investors,” said Kodiaga. “This will attract foreign direct investment, stimulate economic activity, and allow Ethiopians to acquire equity and participate in the country’s development.” He further emphasised that the Stock Exchange will benefit small and medium-sized enterprises  by providing access to previously unavailable capital, thereby encouraging entrepreneurship, economic diversification, and financial literacy.

Kodiaga also noted that the ESX is not just a financial platform but part of a broader economic liberalisation process. “Ethiopia has learned the hard way that a closed economy is unsustainable in the modern world,” he explained. “The launch of the Stock Exchange is an important step towards dismantling these controls and integrating Ethiopia into the global financial system.” The ESX is expected to reduce the risks associated with fraud, increase market efficiency, and improve transparency, thereby boosting investor confidence. With a stronger regulatory framework in place, Ethiopia is positioning itself as an emerging market, attracting global investors and enhancing its financial infrastructure.

The closure of ESX more than 50 years ago was a result of significant political and economic changes. Following the fall of Emperor Haile Selassie in 1974, Ethiopia adopted a highly centralised, militarised government, which controlled most sectors of the economy and isolated the country from the global market. Kodiaga explained that Ethiopia’s decision to reopen the Stock Exchange signals a broader political shift. “It took time for the government to realise that liberalisation and market openness are essential for long-term economic growth,” he said.

The ESX is uniquely tailored to the country’s specific industries, including agriculture, banking, and telecommunications. Kodiaga highlighted that these sectors are expected to benefit most from the new platform. “Agriculture is one of the most significant sectors for Ethiopia,” he said. “Telecommunications, with companies like Safaricom entering the market, will also thrive. Additionally, the country’s growing electricity sector, including the Grand Ethiopian Renaissance Dam, will play a major role as Ethiopia begins selling power to neighbouring countries.”

The timing of the ESX’s launch is particularly significant as Ethiopia continues to target specific industries for growth. The Stock Exchange provides a platform for businesses in agriculture, banking, telecommunications, and energy, offering tailored solutions that align with Ethiopia’s development needs and aspirations.

The establishment of the ESX marks a transformative moment in the nation’s history. It provides new opportunities for investment, growth, and financial inclusion, while playing a pivotal role in the country’s broader economic liberalisation. As Ethiopia moves forward with its reforms, the ESX will serve as a key driver of the country’s economic development and its integration into the global market.

With sectors like agriculture, telecommunications, and energy now positioned to benefit from the new platform, Ethiopia’s economic future looks promising. The Stock Exchange is not just a symbol of change, but a tangible step towards unlocking the country’s full economic potential.

--ChannelAfrica--