Home Business Ethiopia Reopens Stock Market After 50-Year Hiatus, Wegagen Bank Leads the Way

Ethiopia Reopens Stock Market After 50-Year Hiatus, Wegagen Bank Leads the Way

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Ethiopia has taken a significant step towards modernizing its economy with the reopening of its stock market after a 50-year absence.

The Ethiopian Securities Exchange (ESX) officially launched on Friday last week, marking a historic moment for the country.

Wegagen Bank becomes the first company to be listed on the revived exchange.

The relaunch of the stock market is a key component of Prime Minister Abiy Ahmed’s efforts to liberalize the Ethiopian economy.

The previous stock market operated in the 1960s and 70s but was shut down by the socialist regime that took power in 1974.

Despite facing challenges like armed conflicts and concerns about the pace of economic liberalization, Ethiopia has experienced rapid economic growth in recent years.

Prime Minister is reported to have implemented a series of reforms, including opening the telecom sector to private investment.

Notably, Kenya’s Safaricom secured the first private telecom license in 2021.

The government aims to attract a significant number of companies to the ESX, including the state-owned telecom giant, Ethio Telecom, which is preparing for an initial public offering (IPO).

However, analysts believe that limited companies currently meet the stringent financial reporting and liquidity requirements to attract substantial foreign investment.

Despite these challenges, the establishment of the ESX is seen as a crucial step towards fostering a more dynamic and open economic environment.

It is expected to unlock new opportunities for growth and development, providing Ethiopian businesses with access to capital and investors with avenues to participate in the country’s economic expansion.

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