CEM REPORT, MARKET | The Nigerian Exchange Group (NGX Group), a leading African market infrastructure group, has announced a significant investment in the Ethiopian Securities Exchange (ESX). This strategic move marks NGX Group’s foray into East Africa and underscores its commitment to fostering growth and innovation within African capital markets.
NGX Group spearheaded a consortium of institutional investors that injected capital into the ESX, propelling its operationalization forward. This strategic partnership positions NGX as the largest foreign institutional investor in the Ethiopian exchange.
“We extend our congratulations to the ESX on its successful capital raise and commend the Government of Ethiopia and the private sector for their support in bringing this pioneering initiative in the country to fruition,” said Alhaji Umaru Kwairanga, Chairman of NGX Group. “This partnership is a resounding affirmation of our unwavering dedication to promoting economic development, transparency, and exemplary corporate governance standards that foster an environment conducive to inclusive growth, even as we aim to maximize value for our esteemed shareholders.”
NGX and ESX: Unlocking Potential in Ethiopia’s Booming Economy
The Ethiopian economy is one of Africa’s fastest-growing, boasting immense potential for investors. “We are excited to announce our investment in the Ethiopian Stock Exchange, which represents a significant milestone in our expansion strategy,” remarked Temi Popoola, Group Managing Director of NGX Group. “Ethiopia is one of Africa’s fastest-growing economies, with immense potential for investment and growth. We believe that by partnering with the Ethiopian Stock Exchange, we can leverage our expertise and experience to contribute to the development of a robust and dynamic capital market in Ethiopia.”
This sentiment is echoed by Tilahun Esmael Kassahun, CEO of the ESX. “We are thrilled to announce that the capital raise for Ethiopia’s first securities exchange has exceeded our expectations, reflecting the unwavering confidence of investors in the potential and prospects of Ethiopia’s economic landscape,” he said. “We are pleased to welcome the NGX Group as a strategic partner, building upon the existing support we have received from the NGX Group.”
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Capital Raise Exceeds Expectations
The ESX initially aimed to raise 1.3 billion Ethiopian Birr (ETB) (approximately $11.07 million) but successfully surpassed that target, garnering around $26.6 million in private capital. This oversubscription reflects strong investor confidence in Ethiopia’s economic future and the potential of the ESX.
Significantly, the Ethiopian government will maintain a 25% stake in the ESX, while the remaining 75% will be held by private sector entities. This ownership structure fosters a sense of shared responsibility and promotes private sector participation in the development of the Ethiopian capital market.
As part of the strategic investment, Temi Popoola, CEO of NGX Group, will join the ESX board as a nominee of NGX Group. This appointment strengthens the partnership and ensures knowledge transfer and collaboration at the leadership level.
A Stepping Stone for Pan-African Integration
NGX Group’s investment in the ESX is a significant development for African capital markets. It paves the way for increased cross-border investment flows, enhanced liquidity within African exchanges, and ultimately, a more robust and integrated financial ecosystem across the continent. This collaboration between leading African institutions signifies a promising step towards a more unified and dynamic African financial landscape.
