After 50 years without a stock exchange, investors in Ethiopia are looking forward to hitting the trading floor once again.
What happened: Ethiopia is launching its first securities exchange since the era of Emperor Haile Selassie ended in the 1970s, part of a larger package of reforms aimed at liberalizing the country’s markets and attracting investment.
Catch up: Ethiopia’s last stock exchange was shuttered in 1974 when a military junta known as the Derg toppled Selassie and implemented strict state control over the economy.
- More recently, Prime Minister Abiy Ahmed has pushed forward reforms to open Ethiopia’s market, but a brutal and deadly civil war from 2020 to 2022 interrupted those efforts.
Why it matters: With a population of over 126 million, Ethiopia is Africa’s second-most populous nation, giving it the potential to transform into a major economic player on the continent — the current government sees opening a stock exchange as a key step to achieving that goal.
Yes, but: Ethiopia will likely need much more than a shiny new exchange to join the ranks of wealthy, or even middle-income, countries. The recent war cost an estimated US$28 billion, more than 5 million Ethiopians still depend on humanitarian food assistance, and its per capita GDP at current prices of just $1,100 is one of the lowest in the world.—TS