What You Should Know About the Establishment of a Capital Market in Ethiopia

 

Introduction

Part of the Ethiopian Government’s recent reform measure aims to correct imbalances and safeguard macro-financial stability in the country, among others. As part of the requirements for macro-economic stability, the reform program provides improvements to access to finance and the development of a capital market, where securities such as shares, bonds and derivatives are bought and sold. As a result, the National Bank of Ethiopia (NBE), which is the central bank of the country, was tasked to prepare the legal framework and came up with a draft capital markets proclamation, which was later approved and enacted by the Federal Parliament in its regular session held on June 10, 2021, as Proclamation No. 1248/2021. Consequently, actions are being taken by the government to operationalize the Ethiopian Capital Market Authority by the end of 2021 and finally the Ethiopian Securities Exchange through public-private partnership arrangements in 2022.

Historical Reference

As share companies started to flourish in Ethiopia in the 1960s, shares were being traded by the NBE. Later on, the Addis Ababa Share Dealing Group was established to trade shares and government bonds in 1965. The Group started with the listing of 15 companies and four government bonds. The number of companies listed reached 17 the next year. The Addis Ababa Bank, Ethiopia Abattoirs, Bottling Company of Ethiopia, Indo Ethiopian Textiles, HVA Ethiopia, and Tendaho Plantation were some of the traded companies. With a socialist government coming to power, led by Derg, which overthrew the imperial regime in 1974, all the traded companies were nationalized, and consequently, the stock market was shattered.

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The New Investment Proclamation No. 1180/2020: A Brief Overview

 

One part of the economic reform programs taking place in Ethiopia is improving the country's ranking in the World Bank's Ease of Doing Business. As part of the Ease of Doing Business Project, the Ethiopian Investment Commission (EIC) has taken the responsibility of revising the investment proclamation, which was in effect since 2012. After a number of consultations with the private sector representatives and the development community, the final draft has been presented to the House of Peoples' Representatives (HPR) in January 2020 and got approved by the House. After the approval, the law-making process necessitated for it to get publicized in the Federal Negarit Gazette to enter into effect. Accordingly, the new investment proclamation, cited as "Investment Proclamation No. 1180/2020" got publicized on April 2, 2020, officially repealing the long-lasted Investment Proclamation No. 769/2012 as amended from time to time.

 

Following this the Council of Ministers is expected to enact the Investment Regulation, which mainly puts the new proclamation to the ground. The Proclamation more of sets the high-level policy and institutional arrangements in relation to investment.

 

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Coronavirus – The Limitations on Your Rights and the Resulting Responsibilities, Explained

 

 

Due to the coronavirus disease (COVID-19) outbreak in Ethiopia, Prime Minister Abiy Ahmed announced the government’s decision to close schools and the banning of all sports events and large public gatherings for the next fifteen days. The decision was made after the government has confirmed a total of five cases on Monday, March 16, 2020. Going forward, the government is expected to take measures, which will have an adverse effect on the constitutional and legislative rights of health professionals, customs officers and the general public. In this article, I will discuss some of the possible limitations on the rights of these people and possible measures that the government is entitled to take in case of disobedience.

Duties and Limitations Associated with COVID-19

In relation to the outbreak of COVID-19, different segments of the society are duty bound to assist in preventing the spread of the disease. Specifically, the duties on health professionals, customs officers and individual citizens are briefly explained below.

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