The Tech Running the Ethiopian Securities Exchange

Ethiopia had a stock market once before. A share trading group functioned inside the State Bank of Ethiopia from the early 1960s, trading among six institutions through open bidding. The socialist military government that overthrew Emperor Haile Selassie in 1974 shut it down. For fifty years, Ethiopian companies raised capital through bank loans or retained earnings, and Ethiopian banks managed liquidity in isolation from one another. That arrangement is now over.

The Ethiopian Securities Exchange (ESX) launched on January 10, 2025. On July 11, 2025, the exchange went further: government T-bills and two bank equities began trading on the secondary market for the first time in the country's history. The technology making this possible was assembled from scratch, in under three years, by a small team that studied exchanges across Africa, Asia, and Europe before placing their bets on a specific set of vendors.

Why the Tech Stack Requires Purpose-Built Choices

Before any trading system could go live, Ethiopia had a more fundamental problem. Banks were unable to lend to one another efficiently. Each institution managed its own liquidity in a silo, which pushed borrowing costs up for everyone downstream. There was no interbank market. There was no central place where government securities could be held or transferred digitally. The exchange's technology had to solve all of this before it could enable a single equity trade.

That shaped the procurement process. ESX spent 2023 and early 2024 evaluating technology providers through a competitive tender. The criteria were real-time transaction capability, alignment with international settlement standards, scalability, and mobile and web access for retail investors. The team looked at what exchanges in Nigeria, Kenya, Rwanda, and smaller markets across Asia had deployed.

In August 2024, ESX signed two technology agreements with InfoTech Private Limited, a capital markets technology firm established in 1995 and operating across 17 markets in Africa, the Middle East, and South Asia. The agreements covered the Electronic Trading Platform and the Broker Back Office and Order Management System.

The core of the ESX is the Capizar Automated Trading System (ATS), built and deployed by InfoTech. It is the same platform family InfoTech has installed across exchanges in its portfolio of 17 markets.

The ATS runs a hybrid market structure: a central limit order book for anonymous price-time priority matching, and a Request for Quote (RFQ) platform for bilateral and multilateral negotiated trades. The two operate in parallel, so institutional participants can negotiate directly while retail orders route through the order book at transparent prices. Trading opens with an auction session that sets the opening price for each security, then continues in a continuous matching phase.

Trading hours run from 9:00 to 15:00 East Africa Time on all Ethiopian business days. Orders can be placed through brokerage firms or directly via direct market access facilities. The system handles equities, treasury bills and bonds, corporate bonds, Shariah-compliant instruments (Sukuk), commercial papers, repos, and derivatives across a single platform.

Alongside the ATS, InfoTech delivered a Broker Back Office and Order Management System used by brokerage firms on the exchange. This system handles investor client onboarding, order management, transaction processing, and reporting. It includes both mobile and web interfaces, allowing investors to monitor markets in real time and submit orders without going through a call or branch visit.

The shared back office model is deliberate. Ethiopia's brokerage industry is newly licensed and small. Rather than asking each firm to procure and operate its own back office infrastructure, ESX supplies a shared instance, lowering the barrier to entry while maintaining standardized reporting across the market.

Completing a trade is only half the process. After execution on the ATS, the clearing and settlement of those trades runs through a separate institution entirely: the Central Securities Depository (CSD), operated by the National Bank of Ethiopia and built on a system supplied by Montran.

Montran is a financial market infrastructure specialist with deployments at central banks and depositories globally. Its CSD system at the NBE handles securities registration, custody, corporate action processing (dividends, splits, capital adjustments), and Delivery versus Payment (DvP) settlement, which ensures that securities and funds transfer simultaneously and eliminates settlement risk.

The CSD holds all securities issued in the Ethiopian market: government bonds, treasury bills, equities, and private debt. It is a Single-Entity Multi-Asset depository, meaning it does not separate government and private securities across different systems. This design simplifies the infrastructure and reduces the number of integration points.

The ATS and the CSD are directly integrated, so trades executed on InfoTech's platform settle automatically through Montran's depository without manual handoffs. The CSD is also integrated with the Ethiopian Automated Transfer System (EATS), the central bank's real-time gross settlement system for cash, completing the straight-through processing chain.

The exchange did not wait for equities to demonstrate the system. On October 31, 2024, the interbank money market went live on the ESX platform, three months before the formal exchange launch. Private banks Wegagen and Awash International were the first participants. Wegagen provided an ETB 50 million overnight loan to Awash in response to an initial auction offering ETB 6.1 billion.

The platform publishes bids and offers in real time. Liquidity-surplus banks quote amounts and rates; liquidity-deficient banks choose from the visible offers. Interest rates on transactions are set at a spread above the NBE's policy rate, currently 15%.

By the time equities trading started in July 2025, the interbank platform had processed over ETB 377 billion ($2.6 billion) across five months of operation. That number, generated before a single share changed hands on the secondary market, is the clearest signal of what the absence of a functional interbank market had been costing the Ethiopian banking system.

ESX raised its startup capital in November 2023. The initial target was ETB 205 million ($11.1 million). Investors offered ETB 1.5 billion ($26.6 million), oversubscribing the round by 631 percent across 48 institutional investors. Sixteen private commercial banks, 12 insurance companies, and 17 other investors participated, with the roadshow covering Addis Ababa, Nairobi, and London.

The ownership structure is a 75/25 private-government split. The government's 25 percent stake runs through Ethiopian Investment Holdings, the sovereign wealth fund, along with its subsidiaries Ethio Telecom and the Commercial Bank of Ethiopia. The remaining 75 percent belongs to private institutional investors, including a strategic stake from NGX Group, the Nigerian exchange operator that brought technical exchange experience to the table.

FSD Africa and FSD Ethiopia provided development finance, legal counsel, and technical support through the build phase.

Wegagen Bank listed 6,218,635 shares at the July 2025 secondary market launch. Gadaa Bank listed 1,232,728 shares alongside it. Government of Ethiopia treasury bills became the first debt instruments to trade on the secondary market the same day. Ethio Telecom, which ran an IPO in late 2024 at ETB 30 billion ($236 million) involving 47,000 retail investors, has yet to list its shares on the exchange. ESX CEO Tilahun Kassahun has projected 90 companies listed within the exchange's first decade.

As of July 2025, nine capital market service providers hold ECMA licenses, including two investment banks and one securities dealer. NCBA from Kenya ran a five-day training programme for licensed intermediaries covering investment banking, brokerage, asset management, and custody operations. More foreign firms, primarily Kenyan, are in the licensing pipeline.

The CSD is online at the National Bank of Ethiopia. The ATS is running at the ESX. The interbank market has been processing billions. Ethiopia now has the plumbing for a capital market. What it still needs is volume.