Ethiopia prepares to open doors to outside investors

Ethiopia is preparing to introduce its local currency securities exchange platform next year, and as part of that preparation, it plans to loosen its prohibitions on foreign involvement in its domestic financial markets.

Over the past two years, the nation has allowed foreign companies to participate in its banking and telecommunications sectors, enabling Kenyan banks KCB and Safaricom to establish operations.

Only natives and Ethiopian expatriates are permitted to engage in or run enterprises in other industries, which has severely curtailed the amount of foreign participation in the nation’s financial markets.

Following the opening of the banking and telecommunications sectors, Ethiopia is currently working on liberalizing “many other different sectors,” according to Brook Taye, director-general of the Ethiopian Capital Markets Authority (ECMA), who was speaking to media.

“There is a very progressive and forward-looking approach that the entire economic policy of the country is being governed in the past five years, which has resulted in very significant improvements,” Dr. Taye stated on Wednesday during a press conference held on the sidelines of the Africa Financial Industry Summit in Lome, Togo.

Regardless of having one of the biggest economies in Africa, Ethiopia still lacks a stock market platform, and the majority of equity and stock transactions take place directly between investors and companies.

Despite the absence of an exchange, there are already 350,000 equity investors in Ethiopia’s 30 banks and 18 insurance firms, suggesting that the time is right for the establishment of a bourse. Taye, Dr. stated. –Business Insider Africa