ADDIS ABABA- The African Development Bank (AfDB) has emphasized the critical role of establishing a capital market in fostering economic growth, particularly for capital-intensive infrastructure investments across Africa.
AfDB's Deputy Director General for the East African Region, Leandre Bassole (PhD), told The Ethiopian Herald that creating a comprehensive legal and regulatory institutional framework is vital for capital market development. He highlighted that a robust capital market provides businesses with diversified funding options and broadens investment opportunities for African institutional investors.
Bassole underscored that these efforts align with AfDB's ten-year strategy to mobilize financing from a variety of development partners across the continent. In support of Ethiopia's commitment to financial sector liberalization, the AfDB plans to collaborate closely with the Capital Market Authority to build a resilient and efficient domestic capital market.
"The Bank is set to provide technical assistance for regulatory supervision and the operation of Ethiopia's stock exchange, enabling better access to long-term financing and skills development for the public and private sectors, including small and medium-sized enterprises (SMEs)," he remarked.
According to him, the capital market's role in mobilizing savings is pivotal to funding critical infrastructure projects, which are essential for sustained economic growth.
The Ethiopian Capital Market Authority ECMA, Director General, Hana Tehelku, stressed that involving both investors and the public is crucial for the capital market to support the economy effectively. The Authority has already licensed two investment service advisory firms to enhance public participation through collective investment schemes.
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"The focus will be on regulations that benefit small enterprises and foster an inclusive market. This involves licensing and supervising market participants such as securities exchanges and brokers, and developing diverse financial products to promote fairness, transparency, and efficiency in the market," Hana explained.
The ECMA also aims to safeguard investors by mitigating market risks and ensuring integrity in the evolving financial landscape. These strategic initiatives aim to transform Ethiopia's capital market into a vibrant economic force, accelerating growth and development across sectors.
BY MISGANAW ASNAKE
THE ETHIOPIAN HERALD WEDNESDAY 20 NOVEMBER 2024
