In a landmark development for Ethiopia’s financial sector, the Ethiopian Capital Market Authority (ECMA) has granted licenses to five new capital market service providers, including the country’s inaugural investment banks. This move signifies a pivotal step in the nation’s ongoing economic reforms aimed at liberalizing and diversifying its financial landscape.
The newly licensed institutions encompass:
- CBE Capital S.C.: An investment banking arm affiliated with the Commercial Bank of Ethiopia, the nation’s largest state-run lender.
- Wegagen Capital Investment Bank S.C.: An investment bank recently listed on Ethiopia’s stock market.
- Ethio-Fidelity Securities S.C.: Licensed as a securities dealer.
- HST Investment Advisory Services PLC and Equation Securities Investment Advisor PLC: Both approved as securities investment advisors.
The introduction of investment banks into Ethiopia’s financial ecosystem is anticipated to diversify and strengthen the capital market by offering services such as securities brokerage, investment advisory, and capital raising. This initiative aligns with regulatory reforms, notably the National Bank of Ethiopia’s Directive SBB/92/2024, which permits commercial banks to fully own capital market service providers.
Notably, the leadership of these newly licensed firms reflects a trend toward inclusivity, with two institutions—Wegagen Capital Investment Bank S.C. and HST Investment Advisory Services PLC—being led by female CEOs. This development underscores the increasing role of women in Ethiopia’s financial sector.
Established in 2021, the ECMA continues to play a critical role in setting up Ethiopia’s capital market infrastructure, licensing service providers, and preparing the legal framework necessary for a functional securities exchange. The authority’s efforts are integral to the broader financial sector reform aimed at creating a robust and dynamic capital market in Ethiopia.
