Addis Ababa, May 23, 2022: Ethiopia’s financial markets have been boosted by a series of announcements and commitments by Financial Sector Deepening (FSD) Africa, a specialist development agency working to strengthen financial markets across sub-Saharan Africa.
Launch of FSD Ethiopia and partnerships with Ethiopia Investments Holding enhances efforts to deliver beneficial development and financial outcomes for a stronger more resilient national economy.
The announcements were made as part of a week-long visit led by senior leaders from the UK-Aid funded agency in collaboration with partners.
These included the Ethiopia Ministry of Finance, Ethiopia Investments Holding, National Bank of Ethiopia, and the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI).
From progress in establishing a securities exchange to launching FSD Ethiopia and solutions to help the country’s insurance industry respond to climate change, the initiatives will enhance the strength and health of Ethiopia’s financial markets, building the foundations for a stronger more resilient national economy.
The announcements included:
- Establishment of the Ethiopia Securities Exchange: Ethiopia’s Ministry of Finance, the Ethiopian Investment Holdings and FSD Africa signed a cooperation agreement to establish the Ethiopian Securities Exchange (ESX).
- Once established, the ESX will become the 30th exchange on the continent. At least 50 companies, including banks and insurance companies, are expected to list at the launch of the exchange.
- Investors RoundTable: FSD Africa’s investment arm FSDAi held an investments roundtable in Addis introducing its work as a provider of early-stage, risk-bearing capital and as a catalytic investor, seeking to drive innovative models and products that can address gaps in Africa’s financial market.
- Launch of FSD Ethiopia: FSD Ethiopia, which will work to enable the development of the country’s financial sector. With funding from UKAID and the Bill and Melinda Gates Foundation, FSD Ethiopia will build on FSD Africa’s initial efforts to enhance the country’s financial sector.
- Ethiopian insurers endorse Nairobi Declaration on Sustainable Insurance: Insurance stakeholders in Ethiopia have thrown their support behind the Nairobi Declaration on Sustainable Insurance. The Nairobi Declaration on Sustainable Insurance is a continental commitment by African insurance industry leaders to support the achievement of the SDGs. The Nairobi Declaration brings together local and international insurance firms to promote the achievement of SDGs and make it easier for them to understand the commitment to support the achievement of the SDGs.
Commenting on the visit:
Mark Napier, CEO of FSD Africa said: “We are pleased to be collaborating with the Government of Ethiopia in this historic initiative that will accelerate the development of capital markets in Ethiopia.
Our assistance for establishing the Ethiopian Securities Exchange will leverage FSD Africa’s vast expertise and experience in developing capital markets infrastructure across Africa.
This support signals our long-term commitment to a thriving capital market that is deep, liquid, and efficient.”
H.E Ato Ahmed Shide, Minister, Ministry of Finance, said: “The establishment of a securities exchange, the first in our nation’s history, through such a public-private partnership will usher a new era for the Ethiopian financial industry and the economy.
Today’s cooperation agreement between the Ministry of Finance, EIH, and FSD Africa is a first concrete step towards realizing our vision.”
H.E. Mamo Mihretu, CEO, Ethiopian Investment Holdings, said: “The Ethiopian Securities Exchange will provide issuers and investors unique and unseen access to capital markets, promoting efficient capital allocation and utilization.
In support of Ethiopia’s ambitious economic development agenda, the exchange will ensure that much-needed capital is availed to businesses, entrepreneurs, and young innovators across Ethiopia.
For the first time in the history of our nation, all Ethiopians will have access to long-term finance to build sustainable businesses, create much-needed jobs and be a part of the country’s economic prosperity.”
Paul Walters, Development Director, British Embassy, Addis Ababa, said: A strong, competitive, and inclusive financial market is critical to economic development.
The UK is pleased to be a supporter of this through FSD Ethiopia. FSD Ethiopia’s important work should help create a financial system that brings inclusive economic growth, reduced poverty, and improved livelihoods.”
Dr. Yinager Dessie (PhD), Governor of the National Bank of Ethiopia, said: “We welcome the establishment of FSD Ethiopia as a reliable development partner, and we look forward to working together to address our priority areas of financial inclusion, capital market development and institutional capacity development,” he said.
Ermias Eshetu, CEO of FSD Ethiopia said: “FSD Ethiopia will be an important partner to support the Federal Government’s efforts to ensure the country’s economic growth is inclusive and facilitates the development goals.
With one of the world’s fastest growing economies, with the correct support and initiatives, a stronger and more inclusive economy has the potential to lift millions out of poverty and deliver long-term growth and prosperity,”
Mr. Belay Tulu, Director, Insurance, National Bank of Ethiopia commented: “We recognise the role of a thriving insurance sector in supporting steady economic growth.
Through the initiatives announced today, I have confidence that Ethiopia will be a regional leader in providing innovative insurance products and distribution channels, enabling wider insurance coverage across the country.”