In a major development for Ethiopia’s financial sector, the Ethiopian Capital Market Authority has unveiled the country’s first investment bank. CBE Capital Stock Company and Wegagen Capital Investment Bank Stock Company have been granted licenses to establish these pioneering institutions, marking the beginning of a new era for investment banking in Ethiopia.

Alongside the establishment of these investment banks, the Authority has also approved the licensing of several other key players in the capital market. Ethio-Fidelity Securities Stock Company will serve as a Securities Market Operator, while HST Investment Advisory Services Private Limited and Equus Securities Investment Advisor Private Limited are now officially recognized as Securities Investment Advisors.

Mamo Mihret, Governor of the National Bank of Ethiopia and Chairman of the Capital Market Authority, highlighted the profound impact a well-developed capital market could have on Ethiopia’s economic trajectory. He stated, “A developed capital market is essential for the country’s economic growth and prosperity. It holds great potential, particularly in solving financial challenges in sectors like manufacturing, while also addressing the government’s budgetary needs.” Mihret also pointed out the role of the capital market in the privatization of state-owned enterprises, saying, “This development will empower society by enabling broader public ownership in state-owned enterprises.”

Hana Tehelku, Director General of the Capital Market Authority, expressed optimism about the arrival of these new players. She noted, “The expansion of services, from investment banking to securities transaction execution, will significantly diversify and strengthen the capital market.” Tehelku added, “Until now, the capital market was limited to just four licensed investment advisors. This expansion will provide broader access to essential services, enhancing investor confidence, promoting fairness, and offering better opportunities for raising capital.”

The entry of these new capital market service providers is crucial for creating a more diversified market in Ethiopia and for offering key services to the public. Services range from investment banking and advisory services to the execution of securities transactions. This expansion will bring new depth and efficiency to the market, opening the door to better capital-raising and investment opportunities. These new service providers are expected to enhance investor confidence, promote market fairness, and provide better tools for capital raising, making the market more accessible to both institutional and retail investors.

In particular, the entry of CBE Capital and Wegagen Capital Investment Bank into the sector is highly significant. Both institutions are majority-owned by two major commercial banks: Commercial Bank of Ethiopia and Wegagen Bank. Their entry into the capital market services sector is seen as a major step forward for the revival and growth of Ethiopia’s capital market. This move is made possible by the recent issuance of National Bank of Ethiopia Directive No. SBB/92/2024, which allows banks to hold up to 100% of shares in capital market service providers, marking a positive development in the country’s financial regulatory landscape.

The situation also highlights the growing role of women in Ethiopia’s financial sector, as two of the newly licensed firms—Wegagen Capital Investment Bank and HST Investment Advisory Services—are led by female CEOs.