AfDB Approves $400,000 Grant to Boost Ethiopia’s Capital Market Development

The African Development Bank (AfDB) has approved a $400,000 technical assistance grant aimed at accelerating the growth of Ethiopia’s emerging capital market. The funding, sourced from the Capital Markets Development Trust Fund (CMDTF), will support critical infrastructure and capacity-building efforts at the Ethiopian Capital Market Authority (ECMA) and the Ethiopian Securities Exchange (ESX).

The grant, part of the Ethiopia Capital Market Development Support Project, is expected to enable the ECMA to establish a public disclosure platform that ensures timely and transparent communication between companies and investors, fostering fair price discovery and improved decision-making.

At the same time, ESX will receive support to expand its product offerings to include exchange-traded funds (ETFs), sukuks (Islamic bonds), and green bonds—tools seen as crucial for attracting diverse investor groups and deepening financial inclusion.

Hana Tehelku, ECMA Director General, hailed the collaboration as a “shared vision for a vibrant and resilient Ethiopian capital market,” while ESX CEO Tilahun Kassahun emphasized the timeliness of the intervention, noting Ethiopia’s recent progress in establishing the capital market ecosystem.

AfDB Director for Financial Sector Development Ahmed Attout said the project represents a “milestone” as the first CMDTF initiative outside West Africa, underscoring the Bank’s broader goal of mobilizing long-term capital and creating resilient financial systems across the continent.

The CMDTF, launched in 2019 with funding from partners such as the Netherlands, Luxembourg, and Sweden, now has a $6 million active portfolio across 16 African countries.

This latest project builds on the AfDB’s earlier involvement in Ethiopia, including support for the landmark 2021 Capital Market Proclamation, which laid the legal groundwork for the ECMA and ESX.