Central Bank Reform Drive Earns Ethiopia Global Recognition for Market Infrastructure Transformation

Addis Ababa, March 17, 2026 (FMC) — National Bank of Ethiopia has accelerated financial sector reforms, transitioning to an interest rate-based, inflation-targeting monetary policy and implementing a market-oriented foreign exchange regime since 2024.

The central bank’s efforts have received international acclaim, with Ethiopia winning the “Payments and Market Infrastructure Development – Wholesale Award 2026” from Central Banking following a major overhaul of the country’s financial market infrastructure.

Governor Eyob Tekalign said the recognition reinforces the drive to strengthen market systems, enhance monetary policy transmission, and support sustainable economic growth under the Homegrown Economic Reform Agenda.

At the heart of the reforms is a modern Central Securities Depository (CSD), designed to strengthen open market operations, deepen the treasury market, and support broader capital market development. Complementing this is the Tsega portal, a retail-focused platform aimed at expanding financial inclusion across Ethiopia.

The initiatives are part of Ethiopia’s broader economic reform program, which emphasizes modernization and liberalization. Officials noted that developing a vibrant capital market has been a central component of the strategy.

Legal foundations were established under Capital Market Proclamation No. 1248/2021, which created the Ethiopian Capital Market Authority and enabled the launch of the Ethiopian Securities Exchange in January 2025.

The CSD is a cornerstone of modern financial systems, providing secure custody of securities while managing post-trade processes such as clearing, settlement, ownership transfer, and reporting.

Despite resource limitations, the NBE implemented the system within 18 months, showcasing rapid development of technical expertise and operational capacity. The platform has been described as one of the fastest and most successful implementations of its kind under challenging conditions.

To ensure optimal design, the central bank consulted international counterparts, including the National Bank of Georgia and the Central Bank of Kenya. Ethiopia’s CSD was modelled on Georgia’s integrated framework, which unifies public and private market operations.

Experts noted that the project required extensive coordination among regulators, financial institutions, investors, and technology providers, highlighting its complexity beyond technical implementation.

The system enables full dematerialisation of securities, replacing paper-based instruments with digital issuance and trading, while supporting delivery-versus-payment settlement in central bank money within seconds. It also integrates with trading and payment systems.

Following its rollout, the Ministry of Finance shifted to issuing government securities via competitive public auctions, attracting strong demand and increasing participation from non-bank and retail investors.

The platform currently serves more than 3,000 active traders, alongside multiple issuers and financial institutions. According to the central bank, enhanced liquidity management and more attractive treasury bill rates indicate that the system is contributing to the effectiveness of monetary policy implementation.

The Tsega portal, launched in late 2025 and currently in beta testing, is expected to further expand access to capital markets, particularly for retail investors, advancing financial inclusion nationwide.

With financial support from Financial Sector Deepening Africa, these reforms are strengthening market integrity, improving efficiency, and reducing operational risk, aligning Ethiopia’s financial system with international best practices.