For more than five decades, Ethiopia has held a doubtful discrimination in being the second swollen nation in Africa and one of the fastest growing economies without a stock market.
On January 10, the brand was re -launched the Ethiopian Stock Exchange (ESX). For Prime Minister Abi Ahmed, the bell ring was to celebrate the opening of ESX is an important occasion and another feather in his philosophy in economic liberalization.
To date, ESX has one list, by Wegagen Bank. Optimistic exchange at least 100 lists in the next ten years. It will work as a channel to privatize state -owned companies, ranging from Ethio Telecom, and capital collection. To encourage the lists, the government offers tax incentives and alleviating organizational bottlenecks.
ESX re -launch after cash reforms such as opening the banking sector for foreigners and Forex.
“ESX provides a powerful platform for raising capital at much lower costs,” says Maris Pragma Consultant Consultant Meriz Vikirihans.
Ethiopia has worked without a strong mechanism for a fair access to capital and liquidity, according to FSD Africa, which helped create ESX. It was clear that banks were unable to lend effectively to each other due to the lack of a trading platform between banks. This highlighted the shortcomings in liquidity management and high interest rates for borrowers, especially small and medium companies.
Treating cheap and long -term financing restrictions will be a change in the game for companies. By creating a platform for primary offers, rights issues, private places, corporate bonds and other innovative financial tools, this means that companies will be able to attract capital from a wide range of investors from retail and local and foreign institutions.
Also, dynamic injection in the debt market will witness less credit deception in the local market. Currently, local debt shares in Ethiopia are $ 40 billion, and 59 % of total public debt. This indicates that the government was a great factor in the congestion of the private sector from the credit market, in the process of inciting high interest rates.
