Ethiopia Opens Treasury Bill Market to Public as Nascent Exchange Begins Executing Trades

Ethiopia’s fledgling stock exchange has officially begun executing trades, marking a significant step in the country’s economic liberalization efforts. The launch comes six months after Prime Minister Abiy Ahmed (PhD) rang the inaugural bell to signal the exchange’s opening. On Friday evening, a second ceremonial bell rang at the Sheraton Addis Hotel, signaling the debut trading of shares in Wegagen Bank S.C and Gada Bank S.C, listed under the ticker symbols WBGX and GDAB, respectively.

The event was rich with symbolism and ceremony, but it also marked the beginning of real market activity. Three trades were executed during the launch, showcasing the exchange’s automated trading platform, which officials say will soon be accessible via a mobile application.

Among those attending, Ethiopia’s state minister of finance, Eyob Tekalign(PhD), appeared particularly buoyant. He announced that a three-month issuance calendar for Treasury bills would be published in the coming days and urged commercial banks to assess their liquidity and prepare to engage in the market.

“T-bills are now an investment instrument,” the state minister said positioning the securities as more than just a tool of fiscal policy, but a cornerstone of a new, market-based financial architecture.

Ethiopia has historically offered T-bills with four different maturity periods: 28, 91, 182, and 364 days, with the NBE acting as an agent for the Finance Ministry and issuing them through auctions in the primary market.

Tilahun Kassahun (PhD), the founding chief executive of the ESX, emphasized that the exchange would expand access to government securities previously held mostly by banks, pension funds and institutional investors.

 “Any Ethiopian who opens an investor account through one of the two licensed investment banks can now participate in the secondary T-bill market,” he said. “You can buy as of today, what you just saw were real transactions,” Tilahun told Shega.

Still, he urged potential investors to rigorously assess the returns, even on government-backed assets, highlighting that while T-bills offer tax exemptions and low risk, investment decisions should remain informed by market fundamentals.

A comprehensive list of T-bills issued since August is available on the National Bank of Ethiopia’s website.

The listing of government T-bills on the Exchange is reflective of broader reforms in deficit financing by Ethiopia’s economic stewards. Ethiopia’s finance minister Ahmed Shide said the registration of government securities on the exchange was a major chapter in the modernization of the country’s financial administration. For years, Ethiopia’s budget deficits have been financed through a mix of T-bills, government bonds, and direct advances from the National Bank of Ethiopia. But the system was often criticized for inefficiency, lack of investor appeal, and artificially low interest rates. “The old T-bill market was not reflective of a functioning market apparatus,” Ahmed said, “It discouraged interbank trading and was generally unattractive to investors”.

“Our market today is radically different and predicated on market principles,” the finance minister noted.

He further underscored that the current fiscal year’s 1.93 trillion Birr budget would be financed through domestic revenue and loans. Ahmed outlined that up to 170 billion Birr to finance the budget deficit would be sourced from domestic borrowing.

“It is during these critical times that we have registered T-bills and they have been availed for the secondary market, “ he said. 

T-bills debut on the Exchange follows a broader shift in Ethiopia’s monetary policy environment. Last month, the National Bank of Ethiopia repealed a controversial directive requiring commercial banks to purchase T-bonds equivalent to 20 percent of their loan disbursements.

Mamo Mihretu, NBE’s governor, affirmed that the creation of a transparent and market-based capital market was an essential element of ongoing macroeconomic reforms. He said the realization of the central bank’s strategic objectives including cooling of inflation and modernization of monetary policy, are significantly aided by functional capital markets.

“The central bank has been working towards the creation of an infrastructure that allows T-bills to be availed on the secondary market,” Mamo said.

He reflected on the success of the Central Securities Depository which has enabled over 800 billion Birr in interbank lending in nine months.