On March 29, 2024, the Ethiopian Securities Exchange (ESX) concluded its share sales, signaling a significant milestone in the country’s capital market landscape. In this network, the Ethiopian Investment Holdings (EIH), representing the sovereign wealth fund, secured 25 percent of the shares, while the remaining 75 percent were allocated to private entities.

Announcing the achievement, ESX revealed that the raised capital surpassed initial expectations following the opening of the investment market to shareholders. Tilahun E. Kassahun, CEO of ESX, confirmed the successful completion of the share sales, highlighted by Amhara Bank emerging as the largest private shareholder on the Securities Exchange after purchasing substantial shares.

“We were entrusted with the task of securing 25% of the capital from the government, with the remainder sourced from the private sector. We have successfully met our capital requirements,” stated Kassahun.

ESX, established as per the capital market proclamation 1248/2021, is set to commence operations by the year’s end. Amhara Bank’s significant share acquisition positions it as a major stakeholder in the Ethiopian Securities Investment Market, with a substantial holding of 90.6 million birr.

Several prominent financial institutions, including Zemen, Siinqee, Awash, and Global Bank of Ethiopia, along with insurance companies like Zemen, United, and Lion Insurances, have also participated by acquiring shares.

Amhara Bank’s announcement places it as the sixth private bank to hold a significant share in the Ethiopian capital market, further enhancing the market’s depth and diversity. The stock market’s objective to sell subscription shares worth a billion birr upon its formation underscores the growing investor interest and confidence in Ethiopia’s burgeoning capital market.

The successful completion of ESX’s share sales marks a pivotal moment in Ethiopia’s economic landscape, heralding increased participation from both public and private sectors in driving financial growth and stability.

BGI Ethiopia Distributor Association, representing 36 members, has raised concerns over BGI’s breach of their two-decade-long contractual agreement. The association asserts that despite a signed two-year contract last July, BGI has violated the terms by introducing new distributors without their consent.

Sintayhu G/Selassie, President of the BGI Distributors Association, confirmed the contractual breach, citing BGI’s deployment of new agents in contravention of the agreement. BGI’s CEO, Herve Milhade, announced a new strategic plan aimed at market competitiveness, including revamping the distribution system. Distributors are invited to continue under the new terms, with restructuring threatened for non-compliance.

Despite BGI’s investment of six billion birr, distributors claim a drastic decline in sales, from forty-two percent to twenty-four percent in the past year alone, resulting in significant losses. The Distributor Association, comprising 36 members and employing 4,000 workers, seeks adherence to the original contractual terms amidst ongoing negotiations with BGI.

The Commercial Bank of Ethiopia (CBE), a government-owned financial institution, warns other banks about their dependency on CBE’s stability. It urges them to refrain from engaging in illicit activities affecting the industry without directly naming anyone. CBE’s president, Abie Sano, emphasizes that other banks’ survival is tied to CBE’s, stating that “the loss of CBE will be a loss for the country.” He also addresses a recent system malfunction on March 15, 2024, where a significant amount of money was lost due to a glitch, affecting mainly university students.

Despite recovering a portion of the lost funds, CBE expects reimbursement from those involved in the unauthorized withdrawals. Over 9,000 individuals have returned the money, while others have been publicly identified for failing to do so. The bank aims to resolve the issue by March 30th. CBE, established in 1963, dominates half of the banking market with 40 million account holders and assets exceeding 1.3 trillion birr, reporting a net income of over 17.4 billion birr in the 2022/23 financial year.