May 18/2022 /ENA/ A cooperation agreement for the establishment of Ethiopian Securities Exchange (ESX) was signed by Ethiopian Investment Holdings (EHI), Ministry of Finance, and Financial Sector Deepening Africa (FSD Africa) today.
The Ethiopian Securities Exchange is designed to provide fundraising platform for small and medium-size enterprises and offer a platform for the privatization of Ethiopia’s state-owned enterprises.
On the occasion, Finance Minister Ahmed Shide said the Government of Ethiopia has embarked on developing capital markets as part of the Homegrown Economic Reform program.
According to him, the ESX will be established as a share company by the government in partnership with the private sector, including foreign investors.
“The establishment of a security exchange through such a public-private partnership will usher a new era for the Ethiopian financial industry and the economy as a whole. Today’s cooperation agreement between the Ministry of Finance, EIH, and FSD Africa is the first concrete step towards realizing our vision,” the minister stated.
Ethiopian Investment Holdings CEO, Mamo Mihretu said the National Bank of Ethiopia has made strides towards realizing capital market, though a lot remains to be done.
EHI is a strategic investment arm of the Government of Ethiopia and the objective is to contribute key development goals through professional management of public assets and best international practices and good corporate governance principles, he added.
“With the signing of this cooperation agreement, EHI is officially assuming the responsibility of building on what has been accomplished so far and taking the next step of fostering a public-private partnership to launch the Ethiopian Securities Exchange.”
Furthermore, the CEO stated that ESX will provide issuers and investors unique and unseen access for capital markets, promoting efficient capital allocation and utilization in the economy.
Financial Sector Deepening Africa (FSD Africa) Chief Executive Officer, Mark Napier said that his organization is pleased to be collaborating with the Government of Ethiopia in this historic initiative that will accelerate the development of capital markets in Ethiopia.
The CEO pointed out that the missing piece in African countries is capital markets and the program’s assistance for establishing the ESX will leverage FSD Africa’s vast expertise and experience in developing capital markets infrastructure across Africa.
“I hope the exchange will be very open to ideas from all over Africa and indeed the wider continent. Because many exchanges have gone before you and experimented with development path,” Napier stressed.
ESX will provide a medium of exchange between investors and those who require capital to build and expand business.