Ethiopia licenses first investment banks, expands capital market services

The Ethiopian Capital Market Authority (ECMA) has licensed five new capital market service providers, including Ethiopia’s first investment banks, in what it described as a “significant step” for the country’s financial sector. The licensing, granted on March 21, increases the total number of licensed service providers from four to nine, according to ECMA.

The newly licensed institutions include CBE Capital S.C. and Wegagen Capital Investment Bank S.C., both designated as investment banks. Additionally, Ethio-Fidelity Securities S.C. has been licensed as a securities dealer, while HST Investment Advisory Services PLC and Equation Securities Investment Advisor PLC have been approved as securities investment advisors.

ECMA stated that the licensing “marks a historic milestone” by introducing investment banks into Ethiopia’s financial sector, which had previously only included advisory firms. The authority said the new licensees are expected to “diversify and strengthen” the capital market by offering services such as securities brokerage, investment advisory, and capital raising.

The inclusion of investment banks, ECMA noted, follows regulatory reforms, particularly the National Bank of Ethiopia (NBE) Directive SBB/92/2024, which permits commercial banks to acquire full ownership of capital market service providers. ECMA said CBE Capital and Wegagen Capital, both affiliated with Commercial Bank of Ethiopia and Wegagen Bank, respectively, are the first institutions to operate under this directive.

Source: Addisstandard