Ethiopia launched a secondary market for trading treasury bills and equities on Friday, a major step forward for its nascent securities exchange which launched earlier this year as part of a drive to liberalise the tightly controlled economy.
A secondary market allows investors to buy and sell securities from one another after they have been issued in the primary market.
Ethiopia, Africa’s second most populous country with around 130 million people, had a stock market in the 1960s and 1970s, but it was abolished by the socialist military government that overthrew the monarchy in 1974.
Wegagen Bank has listed 6,218,635 shares, while Gadaa Bank has listed 1,232,728 shares, becoming the first equities to be formally tradeable on the Ethiopia Securities Exchange (ESX).
“Today marks another milestone for ESX and stakeholders that worked hard for the past few years to deepen the Ethiopian capital market,” ESX Chief Executive Officer Tilahun Kassahun said.
State-owned telecom Ethio Telecom sold 10.7% of its shares in an initial public offering last October, but its listing on the ESX has been delayed.
More than 90 companies are expected to be listed on the ESX in the next decade, Tilahun said.
Ethiopia has registered some of the continent’s fastest economic growth rates for years.
Prime Minister Abiy Ahmed’s bid to open up the economy since he came to power in 2018 has attracted interest from several foreign companies, including Kenya’s Safaricom, which won the country’s first private telecoms licence in 2021.
However, Ahmed’s economic liberalisation campaign was interrupted by a two year war in the country’s northern Tigray region, which ended in 2022.
This month, the International Monetary Fund has approved the third review of Ethiopia’s $3.4 billion loan programme as the country continues debt restructuring talks.
(Reporting by Dawit Endeshaw. Editing by Hereward Holland and Mark Potter)