As Ethiopia’s capital market takes its first bold steps, Wegagen Capital stands at the forefront of this financial transformation. In an exclusive interview with Capital’s Eyasu Zekarias, CEO Brutawit Abdi shares insights on the journey of launching Ethiopia’s first licensed investment bank, the challenges of building market infrastructure from the ground up, and the opportunities that lie ahead for both local and foreign investors. From navigating regulatory milestones and technological integration to fostering public awareness and attracting talent, Brutawit discusses how Wegagen Capital is shaping the future of investment in Ethiopia—and why she believes the country’s capital market is poised for remarkable growth in the years to come. Excerpts;
Capital: As a pioneering institution, how do you assess the current state of the Ethiopian capital market since its inception? What are its most promising aspects?
Brutawit Dawit Abdi: The Ethiopian capital market was established recently, and since its inception, significant progress has been made. An institutional framework has been created, along with regulations and directives. Awareness has been raised among banks, insurance companies, institutions, and individuals.
The most promising aspect of the capital market is its potential for growth, which will largely depend on the number of people registering their shares on the Ethiopian Securities Exchange. The future holds tremendous promise, and even in this short period, substantial achievements have been made. Staff training has been conducted, guidance has been provided, and ongoing support has been offered in ways that exceed expectations.
Capital: Can you elaborate on the journey of preparing for this pioneering role, detailing the key preparations made and the major milestones achieved in getting ready to commence operations?
Brutawit: For a company to be licensed by the Ethiopian Capital Market Authority, certain requirements must be fulfilled, one of which is registering shares. The process of share registration involves several steps.
A critical first step is preparing a Prospectus, which requires completing various stages. These include conducting a detailed analysis of financial documents and performing due diligence.
After submitting the Prospectus, it must be reviewed and approved. If amendments are needed, they will be addressed before final approval. This approval marks a significant milestone in our preparatory journey.
The second stage involved securing premises. We rented a space from Wegagen Bank, establishing ourselves as a separate entity with no affiliation to Wegagen Bank.
The third challenge was staffing. As you know, investment banking is a new venture in Ethiopia. Even though finding qualified personnel proved difficult, we were able to overcome the problem by building internal capacity, recruiting internationally and investing heavily in training and development.
Capital: You’ve obtained an investment banking license from the ECMA. What new and specialized services does this license allow Wegagen Capital to provide, and how will these services set you apart in the market?
Brutawit: Wegagen Capital offers a full suite of investment banking services. These include strategic advisory services on mergers, acquisitions, corporate restructuring, capital raising through securities, underwriting for Initial Public Offerings, brokerage and trading services and trusted intermediation between issuers and investors.
As you know, a company cannot register its own shares; it must go through a licensed entity that is when we come in. What differentiates us in the market is our expertise. We are proud to have experts in various fields. While we started in a “crawling” phase, we are now beginning to “walk.” This progress is, thanks to our commitment to trainings, I consider it to be one of my most important responsibilities; which is to ensure that every team member is highly trained in both international and local investment banking. Ultimately, the competence of our staff is one of our strongest assets.
Another point of differentiation is that the other licensed advisory entities services are limited. While Wegagen Capital can offer a full range of services, including underwriting, which allows us to sell shares—the other licensed entities (with the exception of Commercial Capital Investment Bank) cannot.
Bringing in talent from abroad is a significant investment, but it is essential for delivering comprehensive, well-documented services that meet our clients’ needs.
Capital: Wegagen Bank has become the first company to be listed on the ESX. How do you assess this historic achievement and what insights and opportunities does it present for other institutions looking to enter the market?
Brutawit: Being the first is remarkable; it brings is great for brand recognition and provides initial competitive advantages. However, we must also acknowledge the challenges that come by being a first.
Some of the key challenges we are facing are lack of awareness among our people regarding investment banking services. This issue, combined with macroeconomic instability, foreign exchange fluctuations, and inflation complicate our efforts. Furthermore, recruiting experts in the field has also proven to be a challenge.
However, for those entering the market later, conditions will likely be more favorable. By that time, the public will have a better understanding of the services offered by investment banks, putting them in a stronger position. Additionally, as inflation decreases, new entrants may find the economic environment more manageable.
Another challenge we encounter is the limited presence of foreign companies, which are crucial for attracting investment. The next wave of companies entering the market will likely have an easier time than we did due to these evolving conditions.
Capital: What internal capacity-building, technological infrastructure, and technical readiness steps has Wegagen Capital taken to trade on the ESX? When will trading officially begin?
Brutawit: We have made significant preparations regarding our technological infrastructure. To operate with the ESX and the Center for Securities Depository, we needed to integrate our system with theirs, which we have successfully accomplished. Our IT staff specializes in various aspects, including infrastructure and integration. We specifically sought knowledgeable personnel for integration because we need to connect with three different entities.
Trading will not commence immediately. Currently, only two companies are listed: Tele, a government-owned company, and Wegagen Bank, a private entity. Therefore, encouraging more companies to register their shares is crucial for facilitating quicker trading before the deadline for share registration, which is November 13, 2025.
Capital: Wegagen Capital was established with an initial capital of 385 million Birr. From an investment banking perspective, do you believe this amount is sufficient for your planned operations, especially in a developing market? Are there any strategic plans for future capital increases to support growth?
Brutawit: In the context of Ethiopia, 385 million Birr is a substantial amount to start an investment bank. However, as our business and client base grow, we will increase our capital as needed.
Capital: Wegagen Capital now holds two roles: as a listed institution through Wegagen Bank and as a licensed market intermediary. How do you envision this unique dual position enabling Wegagen Capital to lead and accelerate the transformation of the Ethiopian capital market?
Brutawit: This dual position is indeed unique because we currently hold three licenses, and no other investment bank has all three. We are the only entity in this position, which allows us to attract more customers. People are already reaching out, asking when we will start trading. As I mentioned earlier, brand recognition and expansion are crucial for any business, and this situation places us at the forefront.
Capital: Given the current environment that seems increasingly favorable for foreign investor participation, how do you foresee the long-term growth and internationalization of the Ethiopian capital market? What role will Wegagen Capital play in attracting foreign investment?
Brutawit: First, we need to strengthen our position locally. As we expand our services, we will likely attract more customers and clients. In the next five to ten years, I envision our stock exchange being recognized across various parts of Africa, whether through collaboration or equity partnerships. I want Ethiopia’s name to be prominent throughout the continent, and I want foreign investors to engage with our Exchange.
Currently, we lack sufficient foreign direct investment (FDI), which is essential because FDIs attract more FDIs. The more foreigners become aware of the Ethiopian Investment Bank, the more likely they are to participate in our exchange or capital market, whether they want to invest or secure financing to grow their businesses.
Capital: What is Wegagen Capital’s overall long-term vision within this evolving Ethiopian financial sector? What key strategic objectives do you aim to achieve in the next five to ten years?
Brutawit: We have a comprehensive strategic plan for our future growth, but I am not ready to share the details at this moment. This plan is not just a conceptual roadmap; it includes specific timelines and targets. Additionally, we have developed a commercial initiative that functions as an awareness project.
I want the public to understand if they own a factory that needs to expand, there are pathways to achieve that. For example, if someone wants to expand their factory, they typically turn to banks for financing. However, borrowing from banks is currently challenging due to a lack of liquidity; there are more borrowers than available funds. This situation presents a significant problem. In addition, the government has imposed a cap on lending, making it more challenging.
Now, there’s an alternative: instead of waiting eight to ten months for a loan application to be processed and approved, individuals can swiftly access other options through the investment banks.
Capital: What role do you believe technology will play in the rapid development of the Ethiopian capital market? How is Wegagen Capital leveraging technological advancements in its operations and service delivery?
Brutawit: Technology is the backbone of any investment bank. There are various ways to utilize it. We currently use the ESX trading platform for buying and selling. In terms of technology, we also focus on back office operations where much of this work is facilitated by applications rather than manual processes.
Currently, we are using the Marlene application, which is employed by ESX. This integration is crucial for our growth as an investment bank, especially given the high costs associated with these applications. Our success will depend on how quickly we expand and how many companies register and get listed on the exchange.
In addition to these third-party applications, we are also exploring advancements in AI and block chain technology. One of our primary goals is to train our staff to become experts in these areas. The experienced professionals we have brought are meant to train our team. Our focus on training is relentless—our IT and finance teams participated in training sessions at CST, reinforcing our commitment to technological proficiency.
