Nigeria’s Bourse Acquires 5% Stake in Ethiopia Securities Exchange

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The Nigerian Exchange Group (NGX) has made a significant move by acquiring an undisclosed stake in Ethiopia’s first-ever securities exchange, surpassing fundraising expectations.

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The Ethiopian Securities Exchange (ESX) aimed to raise $11.07 million last year to initiate operations, aligning with Prime Minister Abiy Ahmed’s agenda to modernize and liberalize the economy.”

We are thrilled to have exceeded our capital raise target and are encouraged by the strong investor confidence in the long-term prospects of both ESX,” stated Tilahun Kassahun, Chief Executive of ESX.

In the ownership structure of ESX, the Ethiopian government, through Ethiopian Investment Holdings (EIH) and its subsidiaries including Ethiotelecom and Commercial Bank of Ethiopia, will retain a 25% stake, while private and institutional investors will collectively hold a 75% stake.

NGX Group, along with FSD Africa and the Trade and Development Bank Group (TDB), has emerged as a key institutional investor, injecting capital into ESX to facilitate its operationalization.

These strategic foreign investments are crucial in transferring technical expertise, best practices, and fostering long-term strategic partnerships.

“Strategic foreign investments by TDB, FSD Africa, and [the] NGX Group are particularly important in allowing the transfer of technical know-how and best practices as well as other areas of long-term strategic value that we will explore,” Kassahun said.

With NGX’s extensive experience as one of Africa’s largest securities exchanges boasting a market capitalization of ₦58.66 trillion ($41.8 billion), ESX stands to benefit from technical support in structuring the exchange, refining trading regulations, and marketing strategies.

The collaboration has already yielded tangible outcomes, including the development of a comprehensive rule book to govern ESX’s operations.

Moreover, ESX successfully concluded its fundraising campaign with commitments from domestic investors, including 16 local banks, 12 insurance firms, and 17 private entities.

The exchange is poised to launch later this year, thereby enhancing Ethiopia’s attractiveness to foreign investors and stimulating economic growth in the populous Horn of Africa nation.

While Prime Minister Ahmed’s administration has made strides in liberalizing Ethiopia’s economy, state control remains prevalent, limiting private sector participation.

Notably, the absence of investment banks underscores the reliance on commercial banks for capital raising endeavors, signaling the need for further reforms to foster a more diverse and dynamic financial ecosystem.


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Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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