The Ethiopia Stock Exchange is set to begin trading Friday after a five-decade gap, in its latest step to lure investors to a nation that’s struggling to control regional strife as it recovers from a civil war.
Ethiopia Investment Holdings, which controls 40 state-run companies, is selling shares in Ethio Telecom to raise as much as 30 billion birr ($234 million) in an initial public offering.
The company’s debut, along with the government’s plan to list other firms, will herald the start of the new bourse, according to Tilahun Kassahun, chief executive officer of the Ethiopian Securities Exchange, which opens on Friday.
Africa’s most-populous nation after Nigeria also changed rules so that investments in the capital market are “treated favorably” to allow investors repatriate funds easily, Tilahun said in an interview.
The biggest move by the government was to end half a century of control over the currency. That unlocked $20 billion in financing from the World Bank and the International Monetary Fund.
Still, the country had just $1.5 billion of reserves as of March, according to the IMF.
Ethiopia had a stock market for 14 years until 1974, when Emperor Haile Selassie was overthrown by the nation’s military and share trading abolished.
The new institution aims to list as many as 50 companies in the next five years, Tilahun said. Some will join the bourse via a so-called listing by introduction — which does not involve an IPO — though how many is not yet clear.
Nigerian Exchange Group Plc (NGX Group), recently announced a significant investment in the Ethiopian Securities Exchange (ESX).
By partnering with ESX, NGX Group aims to support the development of a vibrant and resilient financial ecosystem in Ethiopia, fostering increased investor participation and capital formation.
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