Ethiopia grants its first licenses for investment banking

Ethiopia announced on Friday that it has granted its first investment banking licenses to two domestic businesses, marking the most recent attempt by Prime Minister Abiy Ahmed’s administration to allow private investment into the country’s economy, which employs over 100 million people.

Units of lenders Wegagen Capital Investment Bank and CBE Capital were granted licenses by the state-run Ethiopian Capital Market Authority (ECA), according to a statement released by the ECA.

The largest lender in Ethiopia is CBE, a state-run company, while Wegagen just went public on the Ethiopian stock exchange.

“Pivotal to the creation of a more diversified and robust capital market in Ethiopia,” the statement continued, were the two licenses.

Abiy has been working to liberalize Ethiopia’s previously strictly restricted economy since taking office in 2018.

Foreign businesses have taken notice of these initiatives, notably Safaricom (SCOM.NR), a Kenyan company that opened a new tab and obtained Ethiopia’s first commercial telecom license in 2021.

Additionally, ECA announced that it had given three companies—Ethio-Fidelity Securities, HST Investment advising Services, and Equation Securities Investment Advisor—an advising and brokerage permit.

Ethiopia opened up additional industries, including financial services, and floated its own currency, the birr, as part of the liberalization process.