How Investment Banks Will Unlock New Opportunities for Ethiopian Entrepreneurs











Ethiopia’s historic decision to allow investment banks in the country is a significant move that has the potential to transform its business landscape and foster economic growth. By opening up the financial sector to investment banks, Ethiopia will create a more robust and diverse financial environment, enabling businesses to access capital more efficiently, enhance corporate governance, and expand their operations.

Benefits to Businesses

Access to Capital: Investment banks are known for facilitating capital raising through the issuance of stocks, bonds, and other financial instruments. Ethiopian businesses, especially those in industries like manufacturing, technology, and agriculture, will now have a more direct avenue to raise funds for expansion and innovation.



Example: In South Africa, Standard Bank Group has played a crucial role in capital raising, such as the Jumia IPO in 2019, where the investment bank helped the e-commerce giant raise funds to expand its operations across Africa. Similarly, Ethiopian businesses can now benefit from such services to go public or issue bonds to finance large-scale projects.

Example: In South Africa, Standard Bank Group has played a crucial role in capital raising, such as the Jumia IPO in 2019, where the investment bank helped the e-commerce giant raise funds to expand its operations across Africa. Similarly, Ethiopian businesses can now benefit from such services to go public or issue bonds to finance large-scale projects.

Mergers and Acquisitions (M&A): With the entry of investment banks, Ethiopian companies will have the expertise to negotiate and execute mergers, acquisitions, and other strategic partnerships. This will help them grow faster and more efficiently by leveraging the expertise and resources of larger companies.



Example: FirstRand Bank, a leading South African bank, was involved in the Woolworths and David Jones acquisition in 2014. This allowed Woolworths to expand into the Australian market. Ethiopian companies, particularly those in emerging sectors like tech and manufacturing, will be able to explore similar M&A opportunities to grow both locally and internationally.

Example: FirstRand Bank, a leading South African bank, was involved in the Woolworths and David Jones acquisition in 2014. This allowed Woolworths to expand into the Australian market. Ethiopian companies, particularly those in emerging sectors like tech and manufacturing, will be able to explore similar M&A opportunities to grow both locally and internationally.

Advisory Services: Investment banks provide critical advisory services in strategic areas like corporate finance, restructuring, and risk management. Ethiopian businesses will be able to receive tailored advice, which is crucial for navigating global competition and optimizing their operations.



Example: Lazard, a renowned global investment bank, advised Procter & Gamble on its $57 billion acquisition of Gillette. Ethiopian companies, especially in industries like manufacturing and telecommunications, can now benefit from similar strategic insights to make informed decisions on scaling up or entering new markets.

Example: Lazard, a renowned global investment bank, advised Procter & Gamble on its $57 billion acquisition of Gillette. Ethiopian companies, especially in industries like manufacturing and telecommunications, can now benefit from similar strategic insights to make informed decisions on scaling up or entering new markets.

International Expansion: With investment banks facilitating access to international capital markets, Ethiopian companies could expand globally. Investment banks provide the expertise to structure deals and navigate the complexities of cross-border transactions, which is essential for Ethiopian businesses looking to go global.



Example: J.P. Morgan played a key role in Uber’s IPO in 2019, helping the company raise $8.1 billion and cement its position in the global market. Ethiopian tech startups and innovators can leverage similar opportunities to expand their reach beyond the country.

Example: J.P. Morgan played a key role in Uber’s IPO in 2019, helping the company raise $8.1 billion and cement its position in the global market. Ethiopian tech startups and innovators can leverage similar opportunities to expand their reach beyond the country.

Financial Market Development: Investment banks will also contribute to the development of Ethiopia’s capital markets, encouraging more transparency, better financial reporting, and stronger investor confidence. This will help create a more stable and attractive investment environment for both local and international investors.



Example: In Nigeria, Stanbic IBTC has been pivotal in developing the Nigerian capital market, helping companies like Dangote Cement raise capital to expand their operations. Ethiopia could see similar improvements, providing a more conducive environment for private equity, venture capital, and foreign direct investment.

Example: In Nigeria, Stanbic IBTC has been pivotal in developing the Nigerian capital market, helping companies like Dangote Cement raise capital to expand their operations. Ethiopia could see similar improvements, providing a more conducive environment for private equity, venture capital, and foreign direct investment.

Examples from Other African Banks

Absa Group, a major South African bank, has been involved in numerous deals that have helped businesses access capital and expand. For instance, Absa played a role in the African Bank debt restructuring (2015), which helped the bank regain stability. Such expertise will be crucial for Ethiopian banks and businesses to navigate financial crises or market disruptions.

Barclays Africa (now Absa) has also been involved in advising companies on IPOs and debt offerings, similar to how it supported Zambeef Products in raising capital in Zambia. Ethiopian businesses could also tap into these services to raise funds for growth and expansion.



The entry of investment banks into Ethiopia is a transformative development that will significantly benefit the country’s business environment. It will provide companies with new avenues for raising capital, expanding internationally, executing mergers and acquisitions, and receiving expert financial advice. Drawing on the successes of investment banks globally and across Africa, Ethiopian businesses are poised to unlock new growth opportunities, helping them to become more competitive both locally and internationally. This historic move positions Ethiopia as a key player in the evolving African financial landscape, attracting both local and foreign investors to the country’s emerging markets.