Nigerian Exchange Buys into Ethiopian Stock Exchange

Nigerian Exchange Group (NGX Group) Plc has acquired equity stake in Ethiopian Securities Exchange (ESX), the first securities exchange in the East African country.

The transaction will see NGX Group and other private investors holding majority equity stake of 75 per cent while the Ethiopian government holds the balance.

NGX Group is among the top institutional investors that injected capital into the operationalisation of the ESX alongside FSD Africa, a UK-backed non-profit financial institution, and Trade and Development Bank Group (TDB), the financial arm of the Common Market for Eastern and Southern Africa (COMESA) trade block.

ESX significantly surpassed its initial target by raising about 1.3 billion Ethiopian Birr (ETB) from the private sector.

Chairman, Nigerian Exchange Group (NGX Group) Plc, Alhaji Umaru Kwairanga, said the strategic investment not only marked NGX Group’s entry into East Africa, but also underscored its commitment to driving growth and innovation in the African capital markets, while strategically positioning itself as the largest foreign institutional investor in the ESX.

According to him, the investment in the ESX reflected NGX Group’s confidence in the potential of Ethiopia’s rapidly growing economy and capital market.

He noted that by partnering with ESX, NGX Group aimed to support the development of a vibrant and resilient financial ecosystem in Ethiopia, fostering increased investor participation and capital formation.

“Our partnership with ESX 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,” Kwairanga said.

Group Managing Director, NGX Group Plc., Temi Popoola, explained that through the investment, NGX Group aimed to contribute to robust regulatory frameworks and foster best practices within the ESX ecosystem.

He said NGX Group remained dedicated to providing on-going technical assistance and capability enhancements to support the successful operations and growth of the ESX.

“We are excited to announce our investment in the Ethiopian Stock Exchange, which represents a significant milestone in our expansion strategy. 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,” Popoola said.

He assured that through strategic partnerships and investments, NGX Group aimed to facilitate cross-border investment flows, enhance liquidity, and promote economic development across the continent.

Chief Executive Officer, Ethiopian Securities Exchange (ESX), Tilahun Kassahun, described the NGX Group investment as a build-up on existing supports from Nigeria.

“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. We are pleased to welcome the NGX Group as a strategic partner, building upon the existing support we have received from the NGX Group,” Kassahun said.

With this investment, Popoola will join the board of ESX as a nominee of NGX Group.