On March 21, Ethiopia issued its first-ever investment banking licenses, marking a historic shift in the nation’s financial sector. The Ethiopian Capital Market Authority (ECMA) granted the licenses to CBE Capital S.C. and Wegagen Capital Investment Bank S.C., both linked to major Ethiopian banks.
CBE Capital, a subsidiary of the state-owned Commercial Bank of Ethiopia (CBE), became the country’s first public-sector-backed investment bank. Meanwhile, Wegagen Capital, affiliated with Wegagen Bank, officially enters as a private-sector player, following Wegagen Bank’s recent listing on the Ethiopian Securities Exchange (ESE)—the country’s first stock market, expected to launch soon.
The newly licensed firms will focus on capital raising, mergers and acquisitions, and investment advisory, providing businesses with financing options beyond traditional bank loans. This move is part of Prime Minister Abiy Ahmed’s broader economic liberalization plan, aimed at modernizing Ethiopia’s heavily state-controlled financial system.
The licensing of investment banks is widely seen as a critical step toward integrating Ethiopia into global capital markets. Hana Tehelku, ECMA’s Director General, described the move as a “historic milestone” and urged the newly licensed firms to operate with “utmost integrity and commitment.”
The initiative is expected to attract foreign investment, increase financial stability, and support Ethiopia’s economic diversification. The country, Africa’s seventh-largest economy with a GDP of $126 billion, has long relied on agriculture and state-owned enterprises but is now seeking to develop a more competitive private sector.
Beyond economic liberalization, the ECMA noted the growing role of women in Ethiopia’s financial sector, pointing out that two of the newly licensed investment firms are led by female CEOs. This reflects a push toward inclusivity in an industry that has traditionally been male dominated. Ethiopia’s shift toward a market-driven economy is expected to reshape its financial landscape. The success of these new investment banks will be a key test of the country’s commitment to reform and economic modernization.
