On March 21, Ethiopia issued its very first investment banking licenses, marking a historic change in the country’s financial sector. The Ethiopian Capital Market Authority (ECMA) has granted licenses to CBE Capital SC and Wegagn Capital Investment Bank SC, both linked to large Ethiopian banks.
CBE CAPITAL, a subsidiary of the Ethiopia State Commercial Bank (CBE), has become the first sustained investment bank in the country’s public sector. Meanwhile, WeGGAGE CAPITAL, affiliated with WegenGEN BANK, officially entered as a player in the private sector, following the recent list of the Wegogn Bank on Ethiopian Securities Exchange (ESE) – the country’s first stock market, which should soon be launched.
The newly authorized companies will focus on the lifting of capital, mergers and acquisitions and investment advice, offering companies funding options beyond traditional bank loans. This decision is part of the broader economic liberalization plan of Prime Minister Abiy Ahmed, aimed at modernizing the financial system strongly controlled by Ethiopia.
The license of investment banks is largely considered as a critical step towards the integration of Ethiopia into the world capital markets. Hana Tehelku, Director General of ECMA, described this decision as a “historic step” and urged companies newly authorized to operate with “the greatest integrity and commitment”.
The initiative should attract foreign investments, increase financial stability and support the economic diversification of Ethiopia. The country, the seventh African economy with a GDP of $ 126 billion, has long been based on agriculture and public enterprises, but now seeks to develop a more competitive private sector.
Beyond economic liberalization, ECMA noted the growing role of women in the financial sector of Ethiopia, stressing that two of the newly authorized investment companies are led by CEO women. This reflects a push towards inclusiveness in an industry that has traditionally been dominated by men. The transition from Ethiopia to a market -oriented economy should reshape its financial landscape. The success of these new investment banks will be a key test for the country’s commitment to reform and economic modernization.