Ethiopia’s financial sector will miss out on the possible investments from American major financiers because of its lack of a dom e stic stock exchange market to help attract foreign capital, an investor said.
An American investment consultant, Jonathan Auerbach, said in Addis Ababa Thursd ay that Ethiopia’s lack of a stock market was making it difficult to direct Amer i can institutional investors to put funds in the country’s vibrant economy.
“You have got to make a decision on whether you need a capitalist or a socialist system,” Auerbach said, adding “Ethiopia is the only country in the world with a big population that does not have a stock-market…you need to have a stock mar k et.”
Ethiopia does not have a stock market but the country lauched the first commodit ies exchange late last year, allowing for coffee trade.
The American says Ethiopia’s vibrant banking industry will inspire confidence fr om global investors if the country has a system of tapping in foreign direct inv e stments into its economy.
“Major banks would be drawn back into Ethiopian market. Ethiopia is the fifth la rgest economy in the sub-saharan Africa in terms of the Gross Domestic Product,”
he said at a press conference.
“There is no transparent platform to allow people and companies to invest in Eth iopia,” Auerbach, who is on an 11-country tour of Africa, said, noting that his f irm was prospecting for business opportunities in Africa.
The firm of investment advisors is seeking to put its clients’ funds in Africa’s most promising sectors such as agriculture, finance and the telecommunication c o mpanies.