The African Development Bank (AfDB) has approved a $400,000 technical assistance grant to support Ethiopia’s efforts to build a vibrant and inclusive capital market. The funding, sourced from the Capital Markets Development Trust Fund (CMDTF), will strengthen both the Ethiopian Capital Market Authority (ECMA) and the Ethiopian Securities Exchange (ESX).
This grant falls under the Ethiopia Capital Market Development Support Project, which aims to enhance market infrastructure, diversify financial products, and improve access to long-term financing.
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The Ethiopian Capital Market Authority (ECMA), established in 2021, serves as the country’s capital markets regulator. The grant will support ECMA in setting up a public disclosure platform, which will help companies share timely and reliable information with investors, shareholders, and other market participants. This is expected to boost investor confidence, improve transparency, and contribute to fairer price discovery.
The Ethiopian Securities Exchange (ESX), which began operations in June 2025, will use the grant to broaden its product offerings beyond traditional equity trading. The funding will help ESX introduce innovative financial instruments such as exchange-traded funds (ETFs), sukuks (Islamic bonds), and green bonds, positioning the exchange as a key player in sustainable finance.
Hana Tehelku, Director General of ECMA, welcomed the support:
“This grant reflects our shared vision with the African Development Bank for a vibrant and resilient Ethiopian capital market. The assistance will be crucial in attracting domestic and foreign investment, supporting economic growth, and expanding access to long-term finance.”
Tilahun Kassahun, CEO of ESX, added:
“The timing of this intervention is ideal. With the groundwork already laid for the capital market, this support will accelerate progress where it matters most—by bringing new opportunities for issuers and investors.”
Ahmed Attout, Director for Financial Sector Development at AfDB, highlighted the strategic importance of the project:
“This is CMDTF’s first project in Ethiopia and outside West Africa, marking a major milestone. It aligns with our vision of enabling countries like Ethiopia to become financial hubs capable of mobilizing capital efficiently and sustainably.”
The project builds on earlier AfDB initiatives that helped shape Ethiopia’s capital market, including the drafting of the Capital Market Proclamation in 2021, which legally established ECMA and ESX. It also reflects Ethiopia’s broader financial sector reforms aimed at unlocking new avenues for economic growth.
The Capital Markets Development Trust Fund, established in 2019 and managed by the AfDB, is a multi-donor fund aimed at deepening and diversifying capital markets across Africa. Its contributors include the Netherlands, Luxembourg, and Sweden. The Ethiopia project brings CMDTF’s active portfolio to $6 million across 16 countries, expanding its reach beyond its initial pilot phase in West Africa.
