Business Gov’t Bonds Set to Debut on Securities Exchange Next Month
June 14, 2025
ESX chief calls on diaspora to invest
The government is preparing to roll out the sale of bonds through the newly formed Ethiopian Securities Exchange (ESX) in a move aimed at deepening domestic debt financing and attracting foreign investment.
The initiative, scheduled to begin in July 2025, marks a significant shift in short-term treasury instruments diversifications.
The announcement was made by Tilahun Kassahun (PhD), CEO of the Exchange, during a high-level forum organized on June 10,2025, under the theme Fostering Renewed Connections Between the Economy and Foreign Affairs Sectors: Towards an Enhanced Economic Diplomacy by the Institute of Foreign Affairs.
According to Tilahun, the government will begin selling bonds through an ESX platform, offering a new investment window especially targeted at members of the diaspora and foreign investors.
“There are many Ethiopians in the diaspora who are still unfamiliar with government bonds,” he said. “Through this capital market mechanism, we are extending a call to participate in a profitable, secure, and patriotic form of investment.”
Government bonds issued through this platform are projected to yield an average return of over 16.5 percent annually, with some returns reaching 20 percent, according to data from the Ministry of Finance .
“For the diaspora, this may well be the most lucrative and accessible investment opportunity available right now,” said Tilahun.
The CEO also revealed that investors will be able to participate from abroad via designated accounts and repatriate both their principal and interest earnings to their chosen bank accounts.
Beyond returns, the broader goal of the initiative is to support Ethiopia’s shift from external debt dependency to a more sustainable, domestically anchored financing model.
“As previously stated, especially regarding monetary policy, economic and debt reforms, one of our objectives is to support the government either to exit from external debt if possible, or at least to maintain sustainable external debt levels. One way to do this is by improving the domestic debt ecosystem,” said Tilahun.
“Until now, domestic borrowing has been largely limited to treasury bills—short-term instruments with maturities under a year. That worked when the national budget was under 400 billion Birr,” he said. “But now, with a budget nearing two trillion birr, pension funds and banks alone are no longer enough. We must expand the base to include individuals and institutional investors, both domestic and foreign.”
Tilahun stressed that the capital market’s evolution must not be reduced to a technical or numerical exercise.
“When we talk about capital markets, the conversation often drifts into technology and numbers. But the core objective is to create viable channels for domestic resource mobilization,” he explained. “Our job now is to make sure those next steps are taken with a focus on the country’s needs.”
He also highlighted the potential of attracting foreign investors willing to take on local currency risk—a model practiced in several developed economies.
“In contrast to foreign commercial debt like Eurobonds, there are also foreign investors who are willing to take on currency risk and invest in local currency within the country. This reduces the government’s need for dollars and delays repayment obligations. These investors, like any domestic economic participants, would be compelled to repatriate their profits in foreign currency later on,” he said. “It’s a win-win for the investor and the country.”
In developed countries like the US, third-party government securities are often purchased by foreign investors.
“Many other countries follow a similar model. So, one of the government’s key interests is to expand domestic financing channels,” the CEO said.
To this end, Ethiopia is exploring Islamic finance alternatives such as Sukuk (Islamic bonds) to engage investors from the Middle East and beyond.
“We are working with regional missions in areas like the Gulf to create mechanisms for investors to buy Ethiopian government and corporate Sukuk,” Tilahun said.
The CEO hopes to see foreign investor participation in the capital market grow over the next five years, with ambitions to go past bonds and stocks and attract institutional players interested in setting up African funds or foundations, following examples in Mauritius and Rwanda.
“We’re actively working to make Ethiopia their next investment destination,” Tilahun said.