New Financial Era Begins as Nation Launches Historic Securities Exchange

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Ethiopia's Financial Sector Reaches a New Milestone

Ethiopia has taken a significant step forward in its financial sector by officially listing and starting the trading of Government Treasury Bills on the newly established Ethiopian Securities Exchange (ESX). This event marks a turning point for the country, signaling a new era of market-based financing, increased transparency, and broader investor participation. These developments are the result of years of strategic reforms under the Homegrown Economic Reform Agenda.

During the ceremony, Finance Minister Ahmed Shide highlighted the importance of this achievement. He emphasized that the success was the outcome of long-term reform efforts, policy coordination, and the commitment of both the government and the private sector. The listing of government securities on the ESX is seen as a crucial step in modernizing the government's financial system and reinforcing the reform initiatives that have been in place for the past six years.

Investors have long awaited this development, and the minister noted that it brings credibility and opens up new investment opportunities. The move also enhances the government's ability to address budget deficits in a market-driven, non-inflationary manner, which supports national development and helps manage long-term financial supply.

National Bank of Ethiopia (NBE) Governor Mamo Mihretu stressed the vital role of the capital market in driving economic growth. He stated that the capital market should grow alongside other sectors and serve as an alternative source of finance for the country's development. The ESX, he added, will contribute to price stability and help enhance the effectiveness of monetary policies while modernizing operations.

The launch of the ESX represents the culmination of seven years of reform efforts, according to Finance State Minister Eyob Tekalign. While individual reforms may have appeared separate, today’s event shows that they are now producing tangible results. The shift to market-based borrowing, even at potentially higher interest rates, was a deliberate decision to move away from monetary financing of the treasury and promote sustainable economic growth in a healthy macroeconomic environment.

Eyob confirmed the government's commitment to zero monetary financing for the treasury, a policy that has contributed to record export numbers and substantial reserves. The Ethiopian Capital Market Authority (ECMA) Director-General Hana Tehelku described the milestone as a reflection of the authority's dedication to building a transparent, inclusive, and robust capital market that fosters sustainable economic growth.

Since its establishment in 2022, ECMA has played a key role in laying the legal and regulatory foundations for the capital market. It has issued important directives on securities issuance, investor protection, market conduct, and the licensing of market participants, creating a strong framework for market operations.

The ESX, formed as a public-private partnership under the Capital Market Proclamation No. 1248/2021, has developed a secure and modern trading platform capable of handling both debt and equity instruments. Since October 2024, it has also been facilitating inter-bank money market operations in collaboration with the NBE and commercial banks.

ESX CEO Tilahun E. Kassahun described the first listing of government securities on the ESX as the beginning of a new chapter for Ethiopia's promising debt market. The ceremonial bell-ringing marked the official start of securities trading on the ESX, representing a major step in Ethiopia’s journey toward establishing a dynamic and inclusive capital market.

This launch is a pivotal advancement in building a resilient financial system that will support Ethiopia’s economic transformation for future generations.