Ethiopia Opens Doors to Investment Banking: Licenses Issued in Reform Drive

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Ethiopia has granted its first investment banking licenses to two local companies, marking an important achievement in the country’s economic liberalisation efforts led by Prime Minister Abiy Ahmed.

The Ethiopian Capital Market Authority (ECA), the regulatory body for state finances, revealed on Friday that it has awarded licenses to CBE Capital and Wegagen Capital Investment Bank, which are affiliated with the Commercial Bank of Ethiopia and Wegagen Bank, respectively. This initiative is crucial for fostering a more varied and resilient capital market in Ethiopia, which has a population exceeding 100 million. CBE is the largest state-owned bank in the country, while Wegagen recently made its debut on Ethiopia’s emerging stock exchange.

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The ECA highlighted that these licenses are vital for developing a more diversified and robust capital market. Since assuming office in 2018, Abiy Ahmed has focused on liberalising Ethiopia’s previously tightly controlled economy, attracting foreign investors like Kenya’s Safaricom, which obtained Ethiopia’s first private telecom license in 2021. Additionally, the ECA has issued advisory and brokerage licenses to three firms: Ethio-Fidelity Securities, HST Investment Advisory Services, and Equation Securities Investment Advisor. This announcement coincides with Ethiopia’s ongoing efforts to float its currency, the birr, and broaden access to previously restricted sectors, including financial services.