Ethiopia Awards First Investment Banking Licenses, Aiming for Economic Transformation

Ethiopia has granted its first investment banking licenses to two local firms, marking a significant step in opening up its economy. The government aims to attract private capital to diversify its financial sector. Kenya's Safaricom and advisory firms are also interested in Ethiopia's liberalizing market.

Ethiopia announced on Friday that it had issued its inaugural investment banking licenses to two local entities, marking a significant move in Prime Minister Abiy Ahmed's strategy to open the economy to private investment.

The Ethiopian Capital Market Authority (ECA), a state-run regulator, awarded the licenses to CBE Capital and Wegagen Capital Investment Bank. CBE is Ethiopia's largest lender, while Wegagen recently appeared on the stock market. This development is seen as pivotal for creating a diversified capital market in the nation.

Since taking office in 2018, Abiy has been committed to liberalizing Ethiopia's previously restricted economy, attracting interest from international firms like Kenya's Safaricom, which obtained the first private telecoms license in 2021. The ECA also granted advisory and brokerage permits to three firms, expanding the scope of Ethiopia's economic liberalization efforts.

(With inputs from agencies.)