@ESX_Ethiopia – Ethiopian Business Review

The Institute of Foreign Affairs (IFA), in collaboration with the Ministry of Foreign Affairs, held a high-level conference on Tuesday at the Sheraton Hotel under the theme “Exploring New Avenues: Economic Diplomacy as a Mainstay of Ethiopian Foreign Policy.”

The forum brought together leading government institutions — including the Ministry of Finance, Ethiopian Securities Exchange, Ethiopian Investment Holdings, Ethiopian Investment Commission, and the Ministry of Foreign Affairs — to discuss how to align foreign policy with Ethiopia’s economic ambitions.

Central to the discussions was the Homegrown Economic Reform Agenda, launched in September 2019, which aims to liberalize and modernize Ethiopia’s economy. Panelists explored how the reform program is positioning the country to better integrate with the global economy and attract quality investments.

In his opening remarks, IFA Executive Director Jafar Bedru stressed the need to shift diplomatic efforts beyond traditional political frameworks. “Our diplomatic engagements must transcend conventional paradigms and adopt a proactive, business-oriented approach — one that prioritizes investment and trade facilitation,” he said.

Ambassador Workalemahu Desta, Political and Economic Diplomacy Advisor, MoFA, acknowledged that while Ethiopia’s economic and business diplomacy is making progress, it still falls short of matching the opportunities created by recent reforms. He noted the growing global demand for competitive investment destinations, emphasizing Ethiopia’s strategic potential.

“Globally, production and labor costs are soaring. Multinational companies are actively seeking low-cost, stable, and business-friendly environments — and Ethiopia is emerging as a top destination,” he said.

Ambassador Workalemahu also underscored Africa’s growing strategic importance, pointing to the African Continental Free Trade Area (AfCFTA) as a transformative platform. “AfCFTA is unlocking a vast market for investors across Ethiopia. Additionally, our membership in BRICS and the New Development Bank enhances our positioning within the evolving global economic order,” he added.

Dr. Tilahun Kassahun, CEO of the Ethiopian Securities Exchange (ESX), highlighted the need to diversify Ethiopia’s financial landscape to sustain economic growth. He emphasized that beyond traditional financing mechanisms, both local and foreign private investors require access to alternative financial instruments such as portfolio investments. He mentioned that amid the launch of the capital market in Ethiopia, the Ministry of Foreign Affairs must attract investments from abroad as the old technical way of investment has changed to easy and Central Securities Depository. “Beyond simply counting how many remittance accounts are opened, a new key performance indicator (KPI) should be how many CSD accounts are created,” he added.

He also revealed that the capital market is expected to integrate with the interbank lending system in the first week of July. Just six months after its launch, the interbank market has already facilitated over ETB 800 billion in transactions, with daily volumes reaching several ETB billion, he reported.

This comes on the heels of the launch of a Diplomatic Guide for the Homegrown Economic Reform Agenda, unveiled on Monday by the Ministry of Foreign Affairs in collaboration with the Ministry of Finance, the Ethiopian Securities Exchange, and Ethiopian Investment Holdings.

Wegagen Capital Investment Bank S.C., a subsidiary of Wegagen Bank, officially launched operations, becoming the country’s first private investment bank under the newly established capital market framework.

The inaugural ceremony, held at Hilton Addis Ababa, drew a distinguished audience, including Dr. Tilahun Ismael, CEO of the Ethiopian Securities Exchange (ESX), as well as executives from financial institutions, regulators, and invited guests.

Speaking at the event, Dr. Aklilu Wubet, Chairperson of the Board of Wegagen Capital, emphasized that the bank was formed with a paid-up capital of ETB 385 million, contributed by visionary institutions and individuals who recognize the strategic importance of investment banking in driving national economic growth.

Dr. Aklilu noted that Wegagen Capital is the first private investment bank to be granted an operational license by the Ethiopian Capital Market Authority (ECMA), issued on March 21, 2025. The bank was also the first trading member registered with the Ethiopian Securities Exchange (ESX) on May 14, 2025.

“One of the biggest challenges during formation,” Dr. Aklilu added, “was the scarcity of trained professionals in investment banking. To address this, we invested in capacity building, brought in international expertise, and conducted rigorous profitability analysis—all made possible with strong backing from NBE, ECMA, and ESX.”

Brutawit Dawit Abdi, CEO of Wegagen Capital, highlighted the bank’s mission to set a new benchmark in the financial industry. “As Ethiopia’s pioneering private investment bank, Wegagen Capital carries the responsibility to lead with integrity, innovation, and impact,” she said. “Our formation stems from the pressing need to support capital market growth and fuel national development.”

She outlined the bank’s offerings, which include a full suite of investment banking services tailored to government institutions, public enterprises, corporations, and high-net-worth individuals. Services range from strategic advisory on mergers and acquisitions to capital raising through securities, IPO underwriting, trading and brokerage services, and intermediation between issuers and investors.

Dr. Tilahun Ismael reaffirmed the importance of institutions like Wegagen Capital in building Ethiopia’s capital market ecosystem. “Capital formation is everyone’s responsibility,” he stressed. “We must demystify the concept of capital markets for ordinary Ethiopians, foster a culture of saving, and build the trust necessary to attract foreign investment.”

Wegagen Capital operates independently from Wegagen Bank with its own corporate governance, management, and operational structure. This separation allows the firm to serve as a neutral investment partner for banks and institutions seeking capital market solutions.

The Ethiopian Securities Exchange (ESX) has joined forces with FSD Africa and FSD Ethiopia in a landmark partnership aimed at strengthening Ethiopia’s capital markets.This partnership, announced following ESX’s successful launch, signals a coordinated commitment to deepen the financial sector by mobilizing technical, financial, and strategic resources across the three organizations.

Under the agreement, ESX aims to list more than 50 companies across its main and growth markets while establishing a dedicated platform for government and corporate bonds, including Sharia-compliant instruments such as Sukuks. The partnership will also focus on issuer support, investor education, product development, and institutional capacity building to ensure ESX operates at international standards.

The collaboration brings together technical expertise, financial resources, and strategic oversight from all three entities. ESX will lead project management and implementation, while FSD Ethiopia and FSD Africa will provide funding and advisory support. A dedicated ESX Market Development Committee will coordinate efforts to drive sustainable market growth.

Tilahun Esmael Kassahun, CEO of ESX, underscored the significance of the partnership, stating, “Developing a strong and transparent securities exchange is a milestone in Ethiopia’s financial history.” He emphasized that the initiative will broaden funding options for businesses while equipping investors with the knowledge to engage confidently in the market.

Hikmet Abdella, CEO of FSD Ethiopia, highlighted the transformative potential of the collaboration, noting that robust capital markets are critical for economic growth. “By working together, we are creating a sustainable financial system that will support businesses and provide investment opportunities for individuals and institutions participating in Ethiopia’s economic expansion,” she said.

Mark Napier, CEO of FSD Africa, reinforced the broader continental vision behind the partnership. “Building robust capital markets is essential to unlocking Africa’s economic potential,” he said. Napier pointed to Africa’s vast pool of domestic institutional capital—valued at over USD2.3 trillion—as a key driver for sustainable growth, adding that the collaboration with ESX aligns with FSD Africa’s mission to make finance a transformative force across the continent.

The National Bank of Ethiopia (NBE) and the Ethiopian Securities Exchange (ESX) have signed a landmark Memorandum of Understanding (MoU) to enhance the governance and transparency of Ethiopia’s interbank money market using the ESX trading platform.

H.E. Mamo Mihretu, Governor of NBE, emphasized the crucial role of this initiative in modernizing financial markets, improving liquidity, and strengthening monetary policy transmission.

Since its launch in October 2024, the platform has facilitated transactions exceeding 377 billion ETB, marking a significant leap in Ethiopia’s financial sector development. The agreement sets the foundation for enhanced cooperation, risk mitigation, and market integrity, ensuring that the interbank money market operates with efficiency and confidence.

As Ethiopia deepens its financial sector reforms, this collaboration is expected to enhance market confidence, promote transparency, and drive financial stability, positioning Ethiopia as an emerging player in regional capital markets.

Key Government Institutions Convene to Reinforce Economic Diplomacy as Pillar of Ethiopian Foreign Policy

Ethiopia Welcomes Its First Private Investment Bank as Wegagen Capital Launches

ESX Partners with FSD Africa and FSD Ethiopia to Boost Capital Market Growth

NBE and ESX Forge Strategic Partnership to Strengthen Ethiopia’s Interbank Money Market