“We are open for business”: Launching Ethiopia’s first securities exchange

The problem

Ethiopia had long struggled with an underdeveloped financial sector. It had no securities exchange or formal capital market. The economy was driven by public investment, with state-owned banks as the main source of capital.

That meant companies struggled to raise long-term funds, and households and businesses had no formal way to invest savings. Public debt had increased from 39.6% of GDP in 2011 to 60% in 2018, and credit for the private sector was only around 16% of GDP – below the sub-Saharan average, and a domestic saving mobilisation of about10.9% of GDP, also significantly lower than the Sub-Saharan Africa average of about 20%, according to a 2024 World Bank report.

The country was struggling to create sustainable jobs and grow financial inclusion.

“We needed a way for the government and the private sector to raise long-term capital outside the banking system.” – Weynshet Zeberga, Director of the Monetary and Financial Analysis Directorate at the National Bank of Ethiopia

The solution

FSD Africa helped the government and National Bank embark on a major reform programme. In just four years, Ethiopia developed a functioning capital market ecosystem from scratch.

This was built around four new institutions:

• Ethiopian Securities Exchange (ESX)
• Ethiopian Capital Markets Authority
• Central Securities Depository
• Capital Market Tribunal

FSD Africa support started in  2020, helping NBE to establish a technical team. This support included providing input on new directives, assisting with recruitment, and organising study visits to other countries. We sponsored the training of over 600 Ethiopian professionals, enabling them to receive certification from the Chartered Institute for Securities & Investment, and we co-financed and deployed the Central Securities Depository, ensuring the market could operate effectively from day one.

“We didn’t have the capacity we needed – but FSD Africa addressed that gap.” – Assefa Sumoro, Senior Advisor at the Ethiopia Capital Markets Authority

The impact

The exchange opened in January 2025. Its first listing, Wegagen Bank, was oversubscribed, raising $26 million against a target of $11 million – thanks in part to a $1 million anchor investment from FSD Africa, which gave others the confidence to invest.

Our work has helped Ethiopia transform its economy. The newly functioning capital market will boost the country’s financial credibility, helping to mobilise domestic and foreign capital. It has also led to the upskilling of thousands of Ethiopians, and a more dynamic private sector will increase the likelihood of more sustainable jobs and greater financial inclusion.

“The launch was a message: ‘we are open for business’.” – Yodit Kassa, Chief Business Development Officer, ESX