Ethiopia’s financial sector reform programme continues to gather momentum. Following decades of a predominantly state-led and bank-centric financial system, policymakers are gradually laying the foundations for a more diversified financial architecture intended to mobilise long-term capital, deepen domestic markets and broaden investment opportunities.

9 October 26

Recent reforms have included the enactment of the Capital Market Proclamation and the establishment of the Ethiopian Capital Market Authority (ECMA), the licensing of the country’s first securities exchange, the adoption of directives governing public offerings and securities trading, the liberalisation of the banking sector to permit foreign participation, reforms to the insurance and payments sectors, the introduction of a modern Real Estate Proclamation, and ongoing efforts to strengthen pension and institutional savings frameworks. Taken together, these measures reflect a deliberate shift towards creating market-based channels for savings and investment.

Against this backdrop, ECMA’s recently issued Draft Directive on Collective Investment Schemes (the Draft Directive) represents another significant milestone. While the Draft Directive is designed to regulate a broad range of investment products, its implications for private equity and venture capital may prove to be particularly consequential.

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Should you have any questions regarding Kenya’s carbon market economy, please do not hesitate to contact Mesfin Tafesse or Meseret Aregawi. 

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This article was first published in AVCA’s Legal and Regulatory Bulletin, Issue 12.

 

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