Ethiopia’s Capital Market Ecosystem Set for Growth with AfDB Backing

On Jul 2, 2025 591

Addis Ababa, July 2, 2025 (FMC) — Ethiopia’s efforts to build a modern capital market have gained momentum, with the African Development Bank (AfDB) approving a $400,000 technical assistance grant to support key institutions driving the country’s market development.

The grant, provided through the Bank’s Capital Markets Development Trust Fund (CMDTF), will strengthen the Ethiopian Capital Market Authority (ECMA) and the Ethiopian Securities Exchange (ESX) under the Ethiopia Capital Market Development Support Project. It is the first CMDTF-funded initiative in Ethiopia and a major step in the Fund’s expansion beyond West Africa.

At ECMA, the funding will support the creation of a public disclosure platform to improve access to corporate information for investors and promote market transparency and fair price discovery. The ESX will use the support to diversify its offerings by introducing exchange-traded funds, sukuks, and green bonds.

“This grant reflects our shared vision with the AfDB for a vibrant and resilient capital market,” said ECMA Director General Hana Tehelku. “It will help attract long-term investment and expand access to finance.”

Tilahun Kassahun, CEO of the ESX, noted that the support comes at a crucial time. “The foundations have been laid. It is now time to implement interventions that deliver real impact for issuers and investors,” he said.

AfDB Director for Financial Sector Development Ahmed Attout stated that the project reinforces the Bank’s commitment to strengthening capital markets that can mobilize domestic and international financing. “This marks a milestone as the CMDTF’s first engagement in Ethiopia,” he said.

The project builds on AfDB’s prior support for Ethiopia’s financial sector, including the drafting of the 2021 Capital Market Proclamation, which established ECMA and ESX.

The CMDTF was launched in 2019 with funding from the governments of the Netherlands, Luxembourg, and Sweden. As of June 2025, it manages a $6 million active portfolio across 16 African countries.