The Ethiopian securities market is set to expand with the introduction of an over-the-counter (OTC) market, allowing eight securities to be traded outside the main listing requirements of the Ethiopian Securities Exchange (ESX). This move aims to provide an alternative trading platform for companies that do not meet the ESX's main listing criteria or have chosen a different route to access the capital market.
According to Yodit Kassa, CEO of the Ethiopian Securities Exchange, the OTC market will complement the main exchange as the country develops its capital market infrastructure and expands opportunities for businesses to access investment. The ESX currently has seven actively traded securities, comprising shares in one telecommunications company and six banks, with another security expected to enter the market soon.
The OTC market is designed to serve companies that fall outside conventional listing criteria or opt to trade through the alternative platform. This framework is expected to broaden participation in Ethiopia's developing securities market. Although the specific eight securities joining the OTC platform have not been named, the ESX is working to build trading in government debt securities and other financial instruments.
The ESX currently lists approximately 48 active government Treasury bill securities covering maturities of 28, 91, 182, and 364 days. However, Yodit acknowledged that an active secondary market for these instruments has yet to develop. The exchange's next challenge is encouraging investors to trade them on the secondary market after initial issuance.
Developing the secondary market for Treasury bills would allow holders to sell securities before maturity, improving liquidity, enhancing price discovery, and laying the groundwork for longer-term debt issuance. Yodit outlined the exchange's approach to expanding the debt market, aiming to progressively build the market in terms of those products and see long-term debt issuance.
The exchange has also recorded progress in other segments of the financial market. Ethiopia's interbank money market has facilitated transactions between commercial banks for nearly two years, while a foreign exchange market was launched in January 2026 with support from the National Bank of Ethiopia.
The ESX currently has nine trading members, including licensed investment banks and broker-dealers. Across the broader capital market, approximately 20 to 25 licensed entities are supporting market activities, including trading and transaction advisory services. This expansion of market participants is expected to bolster the exchange's efforts to attract issuers, investors, and intermediaries as Ethiopia continues to build its capital market foundation.
Key points
- The Ethiopian Securities Exchange is set to accommodate eight new securities through an over-the-counter (OTC) market.
- The OTC market aims to provide an alternative trading platform for companies that do not meet the ESX's main listing criteria.
- The ESX is working to build trading in government debt securities and other financial instruments.
