AfDB Backs Ethiopia’s Capital Market Leap with $400,000 Grant.

Wednesday, 17th September 2025.

by inAfrika Reporter.

Ethiopia’s ambition to build a vibrant capital market has taken a major step forward after the African Development Bank Group (AfDB) and the Ethiopian Capital Market Authority (ECMA) signed a $400,000 grant agreement to establish a public disclosure platform and launch new financial products at the Ethiopian Securities Exchange (ESX).

The funding, drawn from the Capital Markets Development Trust Fund (CMDTF), will support the Ethiopia Capital Market Development Support Project. It builds on the Bank’s earlier role in laying the legal groundwork for Ethiopia’s capital markets in 2021, and is designed to accelerate the sector’s transition from policy framework to active investment engine.

A central pillar of the project will be the creation of a public disclosure platform, enabling companies to release timely, accurate information to investors, shareholders, and market participants. By improving access to corporate data, the platform is expected to strengthen price discovery, reduce information asymmetry, and increase investor confidence—an essential ingredient for attracting long-term capital.

“This initiative reflects our shared vision for a vibrant and resilient Ethiopian capital market,” said Hana Tehelku, Director General of ECMA, at the signing ceremony in Addis Ababa. “The support for ECMA’s infrastructure development and ESX’s capacity building and product diversification will be instrumental in attracting domestic and international investment, propelling Ethiopia’s economic growth, and expanding access to crucial long-term financing.”

The project also aims to broaden the range of investment products available to Ethiopian and foreign investors. Planned instruments include exchange-traded funds (ETFs)—investment funds that trade like stocks on an exchange—sukuks, which are Sharia-compliant securities, and green bonds to finance environmentally sustainable projects.

Akane Zoukpo Sanankoua, the AfDB’s Capital Markets Development Manager, underscored the Bank’s broader goal: “The Ethiopia Capital Market Development Support Project’s broad objective is to contribute to the expansion of Ethiopia’s financial sector and economy by improving access to long-term financing for the public and private sector through capital markets. It reinforces the Bank’s commitment to building resilient capital markets that can mobilize domestic and international long-term resources while unlocking new financial opportunities.”

Also present at the signing was Sebastian Beyenburg, First Secretary at the Embassy of Luxembourg, representing the donors behind CMDTF. The Trust Fund—managed by the AfDB and funded by the Netherlands’ Ministry for Foreign Trade and Development Cooperation, Luxembourg’s Ministry of Finance, and the Swedish International Development Cooperation Agency—was created in 2019 to accelerate the deepening and diversification of capital markets across Africa.

As of September 2025, CMDTF has an active portfolio of $6 million spanning sixteen countries. Ethiopia marks its first project outside West Africa, signaling the Fund’s intent to broaden its reach across the continent.

With the groundwork of legal reforms already in place and the launch of a disclosure platform and new products on the horizon, Ethiopia is positioning its nascent capital market for a rapid evolution—from concept to a credible driver of domestic investment and international capital inflows.