Capital Market Development In Ethiopia: Nobody Said It Would Be Easy!

Abstract

Even though recently there were disseminations of different share companies in Ethiopia, capital market becomes an irony that never has been discovered. For the past five decade; Ethiopia has tried to have her own capital market though; it has been not sustain appreciated yet. Hence, still today, there were no both primary and secondary security market and no secondary bond markets in Ethiopia. To this end, Treasury bill which is the primary government bond was the lonely capital market presently serving within the country. But currently, the country has proposed the launching of Euro bond market with the ten year maturity at 6.75% with the total value of one billion US dollar either before the end of December, 2014 or may be at the beginning of January, 2015. So this paper reviewed different countries literatures and gives an insight of the lessons that Ethiopia should have to learn from these failures and successes. This is significant because a good practice to promote the new thing is reviewing what went well and celebrating that as per the countries past, current and future status. Therefore, the paper has concluded that in order to make the development of capital market more successful, Ethiopia should have to continue to reinforce institutional strengthening, better operational and financial performance, getting some robust internationally recognized mentors, consider capital market as a cheap package of funding and as the debt and then increase effective public debt management, increasing diplomatic relations to integrate for trade, foreign direct investment and technology transfer, developing the most capable professional, regulatory, well-informed consumers and investors in the capital market, promoting international accounting standards and adherence to sound corporate governance based upon international best practices to promote good governance frameworks, transparency and accountability among all.

Key words: Capital market development, Lesson to be learned, Review of literature, Ethiopia