The African Development Bank (AfDB) has approved a $400,000 grant to bolster Ethiopia’s nascent capital market ecosystem, marking a key milestone in the country’s push to liberalize its financial sector and attract long-term investments.
According to a statement on Thursday, the funding will be disbursed through the AfDB’s Capital Markets Development Trust Fund (CMDTF) and will support two key institutions: the Ethiopian Capital Market Authority (ECMA) and the Ethiopian Securities Exchange (ESX), which officially launched in January 2025.
The grant will support ECMA in building its regulatory infrastructure, including the development of a public disclosure platform aimed at enhancing market transparency and improving investor access to corporate information. It will also aid the ESX in diversifying its product offerings beyond equities to include exchange-traded funds (ETFs), sukuk (Islamic bonds), and green bonds.
“The support for ECMA’s infrastructure development and ESX’s capacity building and product diversification will be instrumental in attracting domestic and international investment,” said Hana Tehelku, director general of ECMA. “This will help propel Ethiopia’s economic growth and expand access to crucial long-term financing.”
The initiative comes as part of Ethiopia’s broader economic reform agenda, championed by Prime Minister Abiy Ahmed, to liberalise key sectors and improve financial inclusion. Over the past few years, the government has opened the telecoms sector to partial foreign participation, digitised public financial services, and begun laying the groundwork to allow foreign banks into the country.
Ethiopia’s capital market journey began with the passage of the Capital Market Proclamation in 2021. Since then, the government has established ECMA, licensed investment firms, and launched the ESX with its first listings—Wegagen Bank and Gadaa Bank—earlier this year.
Tilahun Kassahun, CEO of the ESX, welcomed the AfDB’s support, describing it as “timely.”
“The foundation has been laid in establishing Ethiopia’s market ecosystem,” he said. “It is now time to focus on interventions that bring tangible benefits for issuers and investors.”
The AfDB has played a key role in shaping Ethiopia’s capital market framework, including supporting the drafting of the Capital Market Proclamation. The latest grant aligns with the Bank’s broader strategy to develop resilient capital markets across Africa.
“This reflects our vision of enabling countries like Ethiopia to emerge as financial hubs,” said Ahmed Attout, AfDB’s director for Financial Sector Development.
The CMDTF, established in 2019 with funding from the governments of the Netherlands, Luxembourg, and Sweden, manages a $6 million active portfolio as of June 2025, spanning capital market projects in 16 African countries.
AfDB officials say the grant is expected to contribute to deeper capital markets, job creation, and long-term economic growth in Ethiopia, positioning the country as a rising player in the continent’s financial landscape.
