The East African country of Ethiopia officially opened its own stock exchange on Friday. The solemn opening should herald a new phase in the liberalization process that Prime Minister Abiy Ahmed is pursuing. For the time being, only one company is listed on the Ethiopian stock exchange.
The opening of the stock exchange is part of a plan to attract investors to the African country, which is still recovering from a civil war. “This is a new beginning,” the Prime Minister declared when he symbolically rang the bell at the start of the first trading day. “We will make the capital market a success.” He also urged Ethiopians to “take risks.”
The financial news agency Bloomberg reports that only one financial institution – Wegagen Bank – is listed on the Addis Ababa stock exchange. There were no stockbrokers present on opening day. However, it is expected that the government company Ethio Telecom will make an introduction soon.
The Ethiopian stock exchange (ESX) intends to eventually grow to ninety listed companies and four million investors, says chairman Tilahun Kassahun. No timetable has been set.
The country’s last stock exchange closed half a century ago, after the fall of Emperor Haile Selassie in 1974 and the takeover of power by the Marxist-inspired Dergue regime that nationalized the economy.
The restart of the Ethiopian stock exchange has been postponed several times. This is partly the result of internal conflicts and the bloody war in the Tigray region (2020-2022), but is also due to problems that most African markets are struggling with. Many investors have been deterred by political instability, the lack of financial infrastructure and the small size of the stock markets.