The Ethiopia Capital Market Authority (ECMA) announced it will begin "issuing investment bank licenses starting February 12th." This will mark the "first time" such licenses have been granted in Ethiopia.
Speaking at a press briefing in Addis Ababa, ECMA Director-General Brook Taye said the regulator has spent the last six months developing over 10 guidelines to "govern the new investment banks." Several private companies, including banks, have already expressed interest in "applying for licenses."
ECMA Director-General Brook Taye noted the ECMA has also been in discussions with five other government development institutions and two foreign banks about potential "licensing."
“The licensing process will be open to both domestic and international investors, provided the applicant meets Commercial Code requirements and ECMA guidelines,” Brook said.
Regarding share sales by potential new "licensees," Brook acknowledged some previous advertising on this front has been "exaggerated or misleading."
The ECMA's recent announcement about initial public offerings aims to provide "accurate information" as Ethiopia's capital markets emerge, according to the Director-General.
Recognizing the shortage of experienced local talent, Brook says the ECMA will either recruit experienced foreigners or train recent graduates to "build internal competency" over time.
The goal is to "harmonize international best practices" with the developmental needs of Ethiopia's "nascent market."
The move to license investment banks marks a "major step" in Ethiopia's efforts to develop its financial sector and mobilize more long-term capital.
