Stock Market in Ethiopia

Countries on the African continent have strengthened their capital markets and contributed significantly to maintaining their economic balance and increasing their productivity. A well-trained modern information technology and strong legal control is required.

The lack of a capital market will deprive our country of many opportunities and our country, Ethiopia, is now rebuilding this long-suspended capital market, making it easier for people and organizations to make a profit. This underlying market can be traded in foreign currency or in dollars

Stock Market in Africa

Many African countries own capital markets. The Nairobi Stock Exchange, established in 1954, is in its infancy. It is worth mentioning that the proclamation to start the capital market in Ethiopia was approved by the House of Peoples’ Representatives a year ago. This type of market has not yet been introduced in Ethiopia, and this new capital market system can transform and transform the country in a modern way. In order to start a capital market, it is important that companies have a strong organization, financial system, transparency and board.

The people who run the institution are elected by the Prime Minister. The sale of treasury bills competitively, the reform of the National Bank of Ethiopia; Improvements in trade law, new corporate accounting, and a willing government are the key to starting a capital market. Ethiopia is not new to such a market. Studies show that there was an Ethiopian stock market around 1956, although not widely known. Then, in 1965, there was a stock market called the Addis Ababa Stock Exchange. But these stock markets are less organized; The supply and coverage of the untrained workforce was so low that they were not considered important at the time. Licensing: It is an institution that promotes a fair, transparent and effective market.

Stock Market in Ethiopia

With the establishment of this market, it is expected that the investment will be easier as investors will have easy start-up capital and expansion capital. There are also opportunities to escape as a country due to the lack of a capital market. However, one of the many benefits of the sector is that the launch of the capital market will enable it to generate the necessary capital for investment projects, increasing the country’s productivity. This will increase the per capita income of citizens, increasing their chances of growing new entrepreneurs and many small businesses.

Increases the country’s Gross Domestic Product. Encourages domestic savings and increases remittances, facilitates capital market consolidation when public enterprises want to privatize, and allows the public to participate fairly in the procurement process. Turning the country’s monetary policy into an interest-based monetary policy, the National Bank of Ethiopia and other banks will be able to move the capital market rather than save the unemployed. Instead, it creates stability. In 2005/6, the government was asked to set up a capital market, but the government said it was not a priority at the time. The shortage of manpower for the capital market is one of the problems, but it does not stop the market from being established. The government also has a role to play in regulating. Once the market is independent, the government will have a role to play in controlling the market. It allows the government to raise funds for infrastructure development in the capital market.