For decades, Ethiopia has been the only major economy in Africa without a securities exchange, but this is set to change as the $156 billion economy gears up to launch securities exchange in the third quarter of 2024. Ethiopia Capital Markets Authority Director-General Dr Brook Taye spoke with Julians Amboko about opportunities in the budding capital markets.
If you look at many jurisdictions, the way capital markets develop is that we have the market growing first and then the regulator develops next to address the emerging legal and regulatory issues. In Ethiopia’s case, the regulator has had a significant head start. Sceptics argue that this creates room for potential regulatory overreach.
Our unique advantage is that we are a latecomer, and we can take advantage of understanding what has worked in different jurisdictions.
Ultimately, it boils down to one thing — an issuer will come to market if it makes sense, if the pricing is right. So, how do we make that work for Ethiopia? Whenever we design a directive or a regulation, we seek to understand what it will take for an issuer to come to the capital market and raise funding both on the debt and equity side versus them going to the private market.
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