Wegagen, CBE Nab First Investment Banking Permits

The Ethiopian Capital Market Authority (ECMA) has approved licenses for five businesses to operate as capital market service providers (CMSPs).

• CBE Capital SC and Wegagen Capital Investment Bank SC have acquired investment banking licenses.
• HST Investment Advisory Services PLC and Equation Securities Investment Advisor PLC join the expanding Ethiopian financial sector as investment advisors.
• Ethio-Fidelity Securities SC nabs the first securities dealer license.

The licenses were approved during a ceremony on Friday, marking a significant milestone in the journey towards the operationalization of the country’s first capital market—the Ethiopian Securities Exchange (ESX).

Expanding Ethiopia's Capital Market

This new batch of licenses brings the total number of authorized capital market service providers to nine.

The ECMA continues to introduce new legislations and process license applications for additional service providers essential for establishing a functional capital market ecosystem.

Initially, the first four licenses were granted to investment advisors, but the inclusion of investment banks and a securities dealer marks a transformative moment for Ethiopia’s financial sector.

Significance of Investment Banking Licenses

The licensing of CBE Capital and Wegagen Capital Investment Bank is particularly notable, as both institutions are significantly owned by two major commercial banks:

• Commercial Bank of Ethiopia (CBE) (state-owned)
• Wegagen Bank

A central bank directive introduced in July 2024 allows banks to:

• Acquire up to 100% equity shares in a capital market service provider.
• Limit ownership in an insurance firm to not more than 5% of the firm’s subscribed capital.
• Own up to 10% of a non-banking business (excluding insurance).

ECMA's Commitment to a Robust Capital Market

“The licensing of these five new capital market service providers is a clear sign that Ethiopia is on track to create a functional, diverse, and well-regulated capital market that will drive the country’s economic growth. The Ethiopian Capital Market Authority remains committed to providing the support and regulatory framework necessary for the continued success of the capital market and its participants.”

The ECMA also reaffirmed its dedication to fostering a market that:

✅ Encourages innovation
✅ Attracts investments
✅ Contributes to sustainable economic development

With the growing number of licensed CMSPs and continuous enhancement of regulatory frameworks, Ethiopia is positioning itself as an attractive destination for both local and international investors.