Ethiopia Launches Stock Exchange After 50-Year Hiatus
TLDR
- Ethiopia has opened a domestic stock exchange after a 50-year absence, starting with the IPO of state-owned Ethio Telecom
- The stock market's revival is part of broader economic reforms amid stabilized inflation at 23.95% in 2024
- Tilahun Kassahun, CEO of the ESX, envisions up to 50 company listings within five years, some via direct listings bypassing IPOs
Ethiopia has opened a domestic stock exchange after a 50-year absence, starting with the IPO of state-owned Ethio Telecom. The Ethiopian Securities Exchange (ESX) officially opens this Friday, aiming to attract local and international investors. The Ethio Telecom offering, managed by Ethiopia Investment Holdings, is expected to raise up to 30 billion birr ($234 million).
The stock market's revival is part of broader economic reforms amid stabilized inflation at 23.95% in 2024, down from over 30% in 2023. Despite progress, Ethiopia faces challenges, including ongoing tensions with Amhara militiamen and currency volatility.
Tilahun Kassahun, CEO of the ESX, envisions up to 50 company listings within five years, some via direct listings bypassing IPOs. The exchange, Ethiopia’s first since Emperor Haile Selassie’s era, aims to attract investment for long-term economic growth.
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Key Takeaways
Ethiopia’s reopening of a stock exchange signifies a critical step in economic reform and financial modernization. The Ethio Telecom IPO could catalyze broader investor interest, creating opportunities for local businesses to access capital. The ESX aligns with Ethiopia’s gradual GDP recovery, projected at 8% in 2024 after years of volatility. However, macroeconomic and political challenges persist. Experts point to the ongoing Amhara unrest and a volatile foreign exchange market as significant deterrents for foreign investors. Currency fluctuations and high inflation complicate planning for businesses and undermine confidence in Ethiopia’s economic stability.
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