Ethiopia’s Stock Exchange Opens, Anchoring Africa’s Newest Capital Market
Africa · Eastern
Key Facts
—Launch. The Ethiopian Securities Exchange (ESX) formally began trading on 10 January 2025, the country’s first stock market in over 50 years.
—First listing. Wegagen Bank became the inaugural listed company, with a government target of up to 90 listings within a decade.
—Ownership. The exchange is a public-private partnership, with sovereign wealth fund Ethiopia Investment Holdings holding 25 percent and private investors 75 percent.
—IMF backing. The ESX forms part of a reform package linked to a four-year US$3.4 billion Extended Credit Facility arrangement with the IMF.
—Regional partner. Nigeria’s NGX Group is a strategic foreign investor, bringing operational expertise from one of Africa’s more mature exchanges.
The Ethiopian Securities Exchange has begun trading in Addis Ababa, ending the country’s half-century absence from listed equity markets and signalling a fundamental reordering of how capital flows into Africa’s second-most populous nation.
A stock exchange after fifty years of waiting
Ethiopia had been the largest country in the world without a stock exchange ever since the old Addis Ababa market ceased operations following the 1974 overthrow of Emperor Haile Selassie. That changed on 10 January 2025, when Prime Minister Abiy Ahmed inaugurated the Ethiopian Securities Exchange in the capital, with Wegagen Bank as the sole initial listing.
The legal foundation was laid in June 2021 with the Capital Market Proclamation, which established the Ethiopian Capital Market Authority as the sector regulator. By mid-2026, analysis from Singapore’s Nanyang Technological University counted five companies on the ESX, including four banks and the partially privatised state telecoms giant Ethio Telecom.
ESX management has publicly targeted 50 listings within five years and around 90 within a decade. The bourse is structured across three market segments—equities, debt, and a money market alternative board—designed to accommodate everything from blue-chip banks to small and medium-sized enterprises.
The money and power behind the Ethiopian Securities Exchange
The ESX is a public-private partnership in which the state, through the US$38 billion sovereign wealth fund Ethiopia Investment Holdings, retains a legally mandated 25 percent minimum stake. The remaining 75 percent is held by domestic banks and insurers alongside foreign strategic investors, most prominently Nigeria’s NGX Group.
The exchange had raised 275 million birr (roughly US$4.8 million at prevailing rates) from state-owned enterprises and UK-funded FSD Africa by mid-2024, and secured over 95 percent of a planned 1 billion birr capitalisation target shortly before launch. A pilot money market platform processed around 100 billion birr in short-term interbank transactions within its first weeks of operation in late 2024.
The National Bank of Ethiopia has simultaneously built a new Central Securities Depository and launched a retail portal called Tsega to democratise access to government bonds. These pieces form an integrated financial infrastructure that did not exist in Ethiopia three years ago.
Why Addis Ababa is liberalising now
The ESX is the financial centrepiece of Abiy Ahmed’s Home-Grown Economic Reform Programme, which aims to shift Ethiopia from a state-dominated, credit-rationed model toward private-sector-led growth. For decades, Ethiopian firms relied almost exclusively on retained earnings, bank loans, and state funding, with banks themselves funded overwhelmingly by deposits.
Fiscal pressures have accelerated the timeline. World Bank diagnostics have flagged rising public and state-owned enterprise debt, foreign-exchange shortages, and persistent double-digit inflation as structural vulnerabilities that a functioning capital market can help address by providing alternative funding channels and supporting gradual privatisations.
Parliament passed a landmark law in December 2024 opening the banking sector to foreign entrants for the first time, and the central bank has shifted to an interest-rate-based, inflation-targeting regime with a more flexible exchange rate. Nigeria’s United Capital Group received the first foreign investment banking licence in June 2026, a direct signal that the reforms are moving from legislation to practice.
The great-power contest and the BRICS thread
Ethiopia’s capital-market opening sits at the intersection of competing financial architectures. The IMF and World Bank have anchored the reform process with a four-year US$3.4 billion Extended Credit Facility, and one business summary notes that the broader package unlocked roughly US$20 billion in multilateral financing.
At the same time, Ethiopia remains a flagship partner in China’s Belt and Road Initiative, with heavy Chinese financing in rail, industrial parks, and telecoms over the past decade. In May 2026, Addis Ababa ended the monopoly of the state-owned Commercial Bank of Ethiopia on issuing China-bound export permits, a move that expands trade with China through a more open banking sector while potentially diversifying Ethiopia away from reliance on Chinese state banks.
For Latin American and other Global South readers, the ESX story echoes the privatisation-through-listing playbook seen in Brazil, Mexico, and South Africa in earlier decades. Ethiopia joined the BRICS bloc in 2024, and the exchange creates a regulated channel for Brazilian, Indian, and Chinese institutional capital to access Horn of Africa assets without navigating opaque bilateral deals—a theme we track closely in our Africa: The New Scramble pillar.
Regional hub or captive market?
By establishing the ESX, Ethiopia enters soft-power competition with established African financial centres in Nairobi, Johannesburg, and Cairo. The equity participation of NGX Group suggests an emerging pan-African capital-market network that could, over time, compete with London or Dubai for equity flows from the continent.
Yet the risks are substantial. Broad money grew 39.3 percent year-on-year as of February 2026, and base money expanded over 43 percent, stoking inflation that can erode investor confidence.
The ESX launched with a single listing and no brokers, and analysts warn that shallow liquidity has undermined other African exchanges.
Political fragility remains the wild card. Ethiopia is still emerging from the brutal Tigray conflict of 2020–2022, and the government is explicitly selling the exchange as part of a strategy to rebuild national cohesion by broadening public ownership of state assets.
Whether that bargain holds will determine if the ESX becomes a genuine Horn of Africa financial hub or a tightly managed platform dominated by a handful of domestic banks.
What to watch next
The Ethio Telecom partial privatisation and listing is the near-term bellwether. A successful IPO with broad retail and institutional participation would set valuation benchmarks for future state-owned enterprise offerings and deepen the market’s liquidity pool.
The entry of foreign banks and brokerages will be the second critical test. The first foreign investment banking licence has already been issued, and the presence of international intermediaries will determine whether the ESX can attract portfolio flows beyond a narrow circle of domestic institutional investors.
Finally, the macroeconomic trajectory matters enormously. If the central bank can maintain its inflation-targeting discipline and the flexible exchange rate holds, Ethiopia could offer one of the more compelling frontier-market stories of the late 2020s.
If not, the exchange risks becoming a symbol of reform ambition that outran implementation.
Connected Coverage
Frequently Asked Questions
What is the Ethiopian Securities Exchange and when did it launch?
The Ethiopian Securities Exchange (ESX) is Ethiopia’s first stock exchange in over 50 years, formally inaugurated on 10 January 2025 in Addis Ababa by Prime Minister Abiy Ahmed. It is a public-private partnership designed to host equities, government and corporate bonds, and money market instruments, with an initial target of 50 listings within five years.
Why did Ethiopia wait so long to open a stock exchange?
Ethiopia’s previous stock market ceased operations after the 1974 revolution that overthrew Emperor Haile Selassie, and the country subsequently adopted a state-dominated economic model. The launch of the ESX is part of Prime Minister Abiy Ahmed’s broader liberalisation drive, backed by the IMF and World Bank, to shift toward private-sector-led growth and reduce reliance on bank lending and state funding.
Can foreign investors buy shares on the Ethiopian Securities Exchange?
Yes, the ESX is designed to accommodate foreign portfolio investment, and Ethiopia has simultaneously opened its banking sector to foreign entrants for the first time. Nigeria’s NGX Group is already a strategic shareholder in the exchange itself, and the first foreign investment banking licence was issued in June 2026, though investors should monitor the pace of regulatory development and the stability of the newly flexible exchange-rate regime.
Read More from The Rio Times