Ethiopia Issues First Investment Banking Licenses as Economic Reforms Pick

Ethiopia has issued its first investment banking licenses, marking a major step in the government’s push to open up the economy after decades of state control.

The move is part of a wider strategy to attract private sector participation in key industries, following similar reforms in telecommunications.

The Ethiopian Capital Market Authority granted licenses to CBE Capital S.C. and Wegagen Capital Investment Bank S.C., allowing them to offer investment banking services, including securities underwriting and financial advisory.

CBE Capital is affiliated with the state-owned Commercial Bank of Ethiopia, the country’s largest lender, while Wegagen Capital is linked to Wegagen Bank.

Ethiopia’s banking sector remains dominated by state-owned institutions, with private banks largely restricted in their operations.

The introduction of investment banking is expected to deepen financial markets, enhance capital access for businesses, and create competition in a sector long controlled by government policy.

The economic liberalisation drive has already transformed the telecom industry.

In 2021, Ethiopia ended Ethio Telecom’s monopoly by awarding a private telecom license to a consortium led by Kenya’s Safaricom.

Safaricom Ethiopia launched operations the following year, introducing competition that has led to improved mobile services and lower prices.

Ethio Telecom has since expanded its offerings, including growing its mobile money platform, Telebirr, which now has over 51 million users and handles transactions worth trillions of birr annually.

gandae@businessdayafrica.org