Officials at National Bank of Ethiopia await the Prime Minister to approve a Director General to establish the Capital Market Authority. The central bank has submitted candidates for the director general position and its board members.
The establishment of the Authority is expected to be finalized in the current fiscal year. Once it kicks-off, the authority will license the Ethiopian Securities Exchange (ESE).
“We have finalized the organizational structure of the authority. Currently, we are working on technical issues. Once the PM finds time and approves the candidates, the Authority will be realized. We have already submitted the candidates and are waiting for the PM’s approval,” said Melesse Minale, senior macro-economy advisor and coordinator of the stock exchange establishing team.
The director general and board chairperson is appointed by the Prime Minister, as per the Capital Market Establishment Proclamation ratified in July 2021. The director is expected to have at least ten years’ of experience at a senior management level in matters relating to finance, economics, management, law or related issues; and has expertise in matters relating to money or capital markets or finance.
Apart from the director general, the PM is expected to nominate four board members and board chair for the Authority. The board will have seven members, including governor of the central bank, director of the Accounting and Audit Board of Ethiopia (AABE) and the director general.
“Though there are plenty of Ethiopians working in stock markets abroad, including in the US, there are limited candidates locally, since Ethiopia has no secondary market. The director general is Ethiopian,” said Melesse.
Once the ESE, in which the government will have a 25 percent share, is established, listing of IPOs will follow, with high expectation put on banks, insurance companies, MFIs, SOEs and international brand hotels. However, the realization of stock market ecosystem might take awhile, since the Authority needs time to organize the establishment of the ESE itself.
Melesse says lessons have been drawn from various stock exchanges around the globe.