Ethiopia Ushers in a New Financial Era with Treasury Bills Launch on ESX

On July 11, 2025, Ethiopia officially launched the trading of Treasury bills (T-bills) on the Ethiopian Securities Exchange (ESX), a landmark move that signals a major leap forward in the country’s financial modernization.

After decades without a formal securities exchange—since the closure of Ethiopia’s first exchange in 1974; this development marks a transformative shift, injecting transparency, liquidity, and accessibility into Ethiopia’s financial ecosystem.

"This marks another massive milestone for Ethiopia's economy, especially in 2025," says market analyst Benoit Laurent, reporting from Tokyo. "The ESX is revamping the financial framework, ushering in transparency where T-bills were previously dominated by state-owned enterprises at below-market rates."

From Legacy to Liquidity

Historically, access to T-bills in Ethiopia was limited to state-affiliated institutions, often at artificially low yields. The centralized ESX trading system now opens the market to broader participation, facilitating real-time price discovery and enabling competitive bidding. Since the launch of the interbank platform in October 2024, it has already handled transactions worth over 135 billion Birr (approximately $1.1 billion USD).

This injection of liquidity arrives at a pivotal time, as Ethiopia continues to attract significant remittance flows - ranging between $4 to $5 billion annually - and seeks to deepen its domestic capital market.

Making Investment More Inclusive

One of the most significant shifts brought by the ESX is the democratization of investment. Through licensed brokers such as Wegagan Capital and CB Capital, both institutional and retail investors can now directly participate in the T-bills market. This is a substantial change from the previous system, which largely excluded individual investors.

"The T-bills market is now within reach for everyday Ethiopians," Benoit explains. "This accessibility could serve as a gateway for broader retail participation in Ethiopia’s growing capital markets."

The Role of the National Bank of Ethiopia

As the market evolves, the National Bank of Ethiopia (NBE) is playing a central role. It not only regulates and supervises the trading environment but also sets benchmark rates and ensures macroeconomic stability. Benoit notes that clarity on how NBE coordinates with the ESX is crucial for investor confidence and long-term success.

Strategically, T-bill yields can be used to manage liquidity, support fiscal policy, and combat inflation—all while attracting capital back into the formal financial system.

Learning from Global and Regional Peers

Ethiopia’s progress mirrors similar transitions in other emerging markets. To ensure long-term sustainability and growth, experts recommend expanding the brokerage network, integrating digital investment platforms, and offering simplified, low-barrier financial instruments.

Kenya’s experience, for instance, offers valuable lessons: mobile money platforms like M-Pesa have successfully linked digital wallets with government securities, driving retail investment at scale.

In Ethiopia, financial literacy will be key. The ESX Digital Academy has already laid the groundwork for this, but consistent and wide-reaching education efforts will be essential to foster an informed and active investor base.

"Financial education is the foundation," Benoit stresses. "Without it, we risk building access without understanding."

A New Chapter in Ethiopia’s Financial Story

The introduction of T-bills on the ESX is more than just a policy milestone—it’s a signal that Ethiopia is embracing a modern, inclusive, and transparent financial system. As infrastructure and investor confidence continue to grow, the T-bills market could become a cornerstone of Ethiopia’s broader economic transformation.

With careful regulation, inclusive strategy, and lessons from regional peers, Ethiopia stands on the brink of a financial revolution, one that could redefine its economic future.

Full interview link here - https://www.cnbcafrica.com/media/7752660388857/esx-t-bills-market-shows-early-signs-of-confidence-post-launch/