The Ethiopian Capital Market Authority (ECMA) has introduced a series of stringent penalties aimed at ensuring compliance with international financial standards and safeguarding investor interests. These measures are part of the broader effort to build a reliable and efficient capital market in Ethiopia as the country prepares for the launch of its first securities exchange.

Under the new directive, entities failing to resolve complaints within designated timeframes or failing to report unresolved issues to the authority will face fines of up to 500,000 birr, with an additional 10,000 birr charged for each day of non-compliance. Similarly, providing false or misleading information or transferring unauthorized securities from special funds will result in penalties ranging from 500,000 to 1 million birr.

The ECMA emphasized that these measures are critical for fostering transparency and accountability in Ethiopia’s emerging capital market. “These penalties are designed to protect investor interests, ensure compliance with regulatory standards, and support the transition towards a fully dematerialized securities environment,” the authority stated.

The directive applies to documents offered for public sale and marketing, including those issued by public enterprises owned by the Ethiopian government. It also covers securities trading activities within the regulated market framework established by ECMA.

The penalties are part of a broader regulatory framework introduced by ECMA to consolidate Ethiopia’s fragmented securities trading landscape into a single, licensed, and regulated market. This initiative is expected to enhance the capital market sector’s contribution to economic growth and provide businesses with a transparent platform for raising capital.

The establishment of Ethiopia’s first securities exchange, known as the Ethiopian Securities Exchange (ESX), is scheduled for November 2024. Officials have highlighted that most preparatory work, including regulatory frameworks and long-term development roadmaps, has already been completed.

Brook Taye, Director General of ECMA, noted that these reforms aim to create a favorable environment for businesses while ensuring investor protection. “Licensed service providers will operate within a transparent and controlled trading system, enabling businesses to raise capital efficiently,” he said.

While these measures mark significant progress toward building a modern capital market in Ethiopia, challenges remain. Severe foreign exchange shortages and bureaucratic hurdles continue to pose risks to smooth operations. However, recent reforms allowing freely negotiated foreign exchange rates are expected to alleviate some of these issues.

The ECMA’s efforts align with Ethiopia’s broader economic goals under initiatives like the African Continental Free Trade Area (AfCFTA). By fostering a reliable capital market infrastructure, Ethiopia aims to attract both domestic and international investors while supporting sustainable economic growth.

The House of People’s Representatives has approved a draft proclamation for the establishment of the Ethiopian Institute of Certified Public Accountants, a crucial step towards addressing the acute shortage of certified accountants in the country. This move is seen as vital for implementing international financial reporting and audit standards, which have been hindered by the lack of qualified professionals.

Ethiopia currently has only 250 certified accountants, a stark contrast to neighboring countries like Kenya, which boasts 45,000, and Nigeria with 60,000. This shortage has resulted in reliance on foreign accountants, leading to significant foreign exchange outflows.

Desalegn Wodajo, Chairman of the Standing Committee on Planning, Budget, and Financial Affairs, emphasized that the institute will play a pivotal role in establishing a quality financial system, promoting economic development, and protecting national interests. The establishment of the institute is also crucial for the implementation of the African Continental Free Trade Area (AfCFTA), as it will help produce internationally recognized Ethiopian professionals, reducing the need for foreign expertise.

The main objective of the Financial Reporting and Presentation Proclamation No. 847/2006 is to establish a comprehensive and transparent financial reporting system. However, the lack of qualified experts has hindered its full implementation. International experiences show that professional associations can produce large numbers of qualified professionals, but in Ethiopia, such associations have made limited progress due to high costs and lengthy training periods.

To address this challenge, the government has been working to establish the Ethiopian Institute of Certified Accountants. The institute will consist of a general assembly, a governing council, and various committees to ensure the accounting profession safeguards public interest and promotes international standards.

The establishment of the Ethiopian Institute of Certified Public Accountants is a significant step towards addressing the critical shortage of certified accountants and enhancing Ethiopia’s financial infrastructure. This move is expected to support economic development and integration into global markets, particularly under the AfCFTA framework.

In a strategic move to address the widening gap between industrial demand and workforce capacity, the Ministry of Labour and Skills has announced the establishment of a new National Skills Council. This initiative aims to promote economic growth through integrated skill development, with a particular focus on the agricultural sector, which is the backbone of Ethiopia’s economy.

Teshale Berecha, Minister of State for Technical and Vocational Education and Training, highlighted the critical role of the Council in equipping citizens with the necessary skills for growth. “Ethiopia faces a shortage of skilled workers needed to meet the growing needs of our industries,” he said. “This council demonstrates our unwavering commitment to prioritizing skills development.”

The National Skills Council serves as a forum that coordinates stakeholders from both the public and private sectors, including the Confederation of Ethiopian Employers Federation and the International Labour Organization (ILO). This partnership aims to align training programs with the real needs of the industry, ensuring that graduates are equipped with practical and in-demand skills.

Ndaba Khumalo, Country Director of the ILO, emphasized the importance of skill investment and technology adoption for Ethiopia’s agricultural potential. He noted that aligning training with industry needs is crucial and highlighted the Council’s role in coordinating and collaborating with various stakeholders.

The Council’s main focus will be on developing skills in the agricultural sector, which is vital for Ethiopia’s economic stability. It will collaborate with curriculum developers, training centers, and higher education institutions to expand industry-led workforce development, with a particular emphasis on integrating technology into training.

The Ministry recognizes the need to address productivity challenges among experienced workers. To this end, the Council will implement targeted training programs, including the “Early Education” initiative. This initiative aims to enhance skills acquired through experience, even in the absence of formal training.

“We are committed to empowering all citizens, irrespective of their educational background,” the minister emphasized. “Through tailored short- and long-term training, we aim to equip individuals to acquire skills necessary for meaningful employment and national development.”

The African Robotics Championship, held at the Addis Ababa Science Museum, has become a vibrant platform for young innovators to showcase their technological prowess. The event, which highlights the creativity and resilience of African youth, underscores the growing importance of robotics and artificial intelligence in shaping the continent’s future.

Organized by Ethio Robo-Robotics, the championship features high-tech robots designed and built by young competitors eager to demonstrate their skills. Senakirem Mekonnen, Managing Director of Ethio Robo-Robotics, emphasized the significance of the event in fostering innovation. “Although the government has paid attention to the sector, there is still a need to supplement basic resources and expand technology across the country,” he said.

Senakirem also stressed the urgency of preparing for a fully digitalized world by 2050, noting that Ethiopia and other African nations must equip their youth with the tools to compete globally.

The competition serves as a critical milestone in advancing technological education and innovation. Participants not only gain hands-on experience but also engage in knowledge-sharing with peers from across Africa and beyond. This year’s event focuses on addressing real-world challenges through robotics, such as disaster response, environmental sustainability, and healthcare solutions.

Baysa Bedada, State Minister for Innovation and Technology, highlighted the broader vision behind such initiatives. “We are working to build a sustainable economy by engaging the private sector in science, technology, and innovation,” he said. Baysa added that robotics competitions are essential for equipping young people with skills that drive economic growth and create jobs.

Despite limited resources and infrastructure challenges, Ethiopian youth have demonstrated remarkable perseverance. At last year’s international robotics competition in China, Ethiopian students secured third place out of 27 countries—a testament to their creativity and determination.

The African Robotics Championship also emphasizes global competitiveness. Senakirem noted that modern technological know-how and rigorous preparation are essential for competing on an international stage. “Africa needs more engineers, coders, innovators, and problem solvers to advance technological progress and ensure a sustainable future,” he said.

The championship provides participants with opportunities to absorb modern technological knowledge, share experiences with other competitors, and showcase their creative potential. It also aligns with Ethiopia’s broader efforts to integrate technology into education and workforce development.