On Tuesday, December 22nd, Ethiopia’s Council of Ministers approved plans for the establishment of a national stock market. The Ministry of Finance had submitted a bill in June to create a stock market authority and the National Bank of Ethiopia (which is a part of the Ministry of Finance) had also announced a draft; it is unclear which has been passed or whether the two bills are one and the same.
Regardless, the Prime Minister’s Office (PMO) expects the move to ease Ethiopia’s economic woes by lessening the dependency on foreign currency and investment.
The bill introducing the capital trading market has now been sent to the House of People’s Representatives for final approval before implementation. If the law passes without hindrance officials expect logistical details to be worked out by the end of 2021.
The PMO also affirmed the multiple avenues of economic sustainability afforded by a stock exchange market. The benefits of the market are expected to include alternative saving means for individuals, alternative and enhanced financing resources for companies, improved corporate and investment databases, and several others.
Due to Ethiopia’s heavy investment in the Banking and Insurance sectors banks and insurance companies are expected to benefit immensely from the creation of the market. The ability of banks and insurance companies to stabilize their cash flows is in turn expected to stabilize the macro-economy of the nation and drive the aims of the mass reforms being rolled out nationwide.
Money Web, New Business Ethiopia, Reuters