Month: March 2025

Brutawit Dawit, a veteran banker with extensive experience in the financial sector, has been appointed to lead Ethiopia’s one of the first investment banks, Wegagen Capital Investment Bank S.C.   (WCIB), which received its official license last week.

Aklilu Wubet (PhD), Wegagen Bank’s president and board chairperson of the newly established investment bank, voiced optimism about the WCIB’s potential role in the emerging capital market. According to Aklilu, companies wanting to sell shares publicly need institutions capable of conducting thorough feasibility studies and providing essential advisory services. He disclosed that Wegagen Bank, the only listed company with the Ethiopian Securities Exchange (ESX), plans to leverage these opportunities and establish a presence in every listed company within the nascent capital market.

Aklilu told Fortune, Brutawit was selected for this role because of her foundational contributions and comprehensive financial expertise.

Her career spans noteworthy leadership roles, including leading the founding committee of the Bank of Abyssinia, serving as president of Wegagen Bank for seven years, heading Zemen Bank for two years, and dedicating more than a decade to independent financial consulting.

Widely regarded as a trailblazer for women in the domestic financial sector, Brutawit has over 30 years of experience in finance and international development. She earned an undergraduate degree in management and international trade from Howard University and an MBA from George Washington University, both in the United States. Her professional qualifications include international banking and financial analysis diplomas from the University of Colorado and Cornell University.

Early in her career, Brutawit spent 15 years at the American Bankers’ Association, followed by seven years at the World Bank, cultivating expertise in research, training, and policy formulation. She consulted for prominent institutions such as the National Bank of Ethiopia (NBE) and the African Development Bank (AfDB). Her international background offered Brutawit a perspective on global banking practices, which she brought back to Ethiopia in the mid-1990s.

Upon her return, she made history by becoming the first female president of Wegagen Bank in May 1997. During her seven-year tenure at Wegagen, she was credited for spearheading growth initiatives and introducing new banking practices, including extensive staff training programs and technological enhancements designed to improve customer service.

After leaving Wegagen Bank, Brutawit continued. In 2009, she became president of Zemen Bank, a new entrant targeting corporate and affluent customers. A novel one-branch marked her leadership at Zemen, a technology-focused strategy focusing on tailored financial products and targeted customer service. Brutawit eventually resigned from Zemen during times of regulatory turmoil, as the National Bank of Ethiopia (NBE) suspended Zemen Bank’s board of directors, led by Ermias Amelga.

In 2012, Brutawit, a mother of two, was tapped to lead the formation of Enat Bank, a financial institution dedicated to empowering women economically. Although she was initially nominated as the Bank’s founding president, regulators’ reluctance to approve her nomination led the position to another candidate.

In the mid-2000s, Brutawit expanded her career to include international development roles, serving as the country representative and Chief of Party for ACDI/VOCA, a global non-profit organisation focused on agricultural development and economic cooperation. More recently, Brutawit directed her attention to the microfinance sector, serving as CEO of Lefayda Microfinance, where she used her sector expertise to extend financial services to grassroots communities.

Now at the helm of Wegagen Capital Investment Bank S.C. (WCIB), Brutawit faces the challenge of leading Ethiopia’s one of the first formal investment banking institutions.

WCIB entered the market with an initial capital of 385 million Br, with parent company Wegagen Bank holding a 86pc stake and Africa Insurance controlling an additional five percent. According to Brutawit, the investment bank’s immediate objective is to provide advisory and brokerage services to companies listed in the capital market. She plans to expand into asset and wealth management, a move expected to create job opportunities.

However, given Ethiopia’s limited expertise in investment banking, WCIB will initially recruit expatriate professionals.

Hana Tehelku, director general of the Ethiopian Capital Market Authority (ECMA), stated the significance of Brutawit’s appointment, along with other female executives such as Tewedaj Gezahegn at HST Investment Advisors Plc, calling it “an encouraging development for gender inclusion in the financial industry.”

The Authority granted licenses last week to four additional capital market entities, including CBE SC Capital Investment Bank, Ethio Fidelity SC, Equations Security Advisor Plc, and HST Investment Advisors Plc. According to Hana, the Authority conducted a rigorous licensing process, assessing financial stability, business strategies, risk management, and corporate governance standards.

“Quarterly financial reviews will be implemented to maintain ongoing market integrity,” Hana said.

National Bank of Ethiopia’s (NBE) Governor, Mamo Mihretu, viewed these new licenses as catalysts for boosting domestic capital formation and reducing Ethiopia’s dependence on foreign capital. He announced the Central Bank’s plans to introduce treasury bonds available for public buying, further diversifying investment opportunities for domestic investors.

CBE SC Capital Investment Bank (CBE-CIB), another momentous entrant, begins operations with an initial capital of 100 million Br, slated to rise to 200 million Br upon obtaining a custodial license. The Bank is majority-owned by the state-run Commercial Bank of Ethiopia (CBE), with Dalol Capital holding a 30pc stake. Zemedeneh Negatu, CEO of CBE-CIB, described the licensing process as detailed and thorough, taking five months to complete.

According to Zemedeneh, his institution prepares to provide an extensive array of services, including brokerage, underwriting, prospectus preparation, equity trading, fixed-income bond issuance, and treasury services.

CBE-CIB plans to offer advice on mergers and acquisitions, private investments, and foreign direct investment portfolio management. Its ambitious growth plans include securing custodial services and raising the Bank’s capital to 300 million Br within three years. The operation intends to integrate artificial intelligence (AI) to enhance its efficiency and effectiveness. Zemedeneh pledged to employ 100 professionals within two years and anticipates interest from the global diaspora community, exceeding three million individuals, who could potentially become key investors in the capital market.

“I’m happy to do it while I am still productive,” Zemedeneh told Fortune.

He has been an ardent advocate of a capital market for Ethiopia for over two decades. He aspires to replicate CBE SC Capital Investment Bank’s model across other Eastern African countries, tapping into the region’s growing financial markets.

Another entrant, HST Investment Advisors Plc, begins operations with capital exceeding regulatory requirements. Tewedaj Gezahegn, with 15 years of auditing and finance experience, leads the advisory firm, which launched with 1.5 million Br, triple the regulatory minimum of half a million Birr. Tewedaj hopes to raise public awareness and increase community participation in the emerging financial market.

HST, predominantly owned by HST Consulting Agency, has majority stakes in the advisory company, including by Tewedaj herself.

Ethio-Fidelity Securities S.C., Ethiopia’s first securities dealer, commenced operations with 50 million Br paid-up capital, far surpassing the Authority’s 10 million Br minimum requirement. The company has 40 shareholders from diverse sectors, including finance, banking, insurance, and import-export businesses. Prominent founding members include board chairman Abebaw Zewedu, Yima Shewa Siyum, Abebaw Molla, Zelalem Werku, and Mesfin Zeberga, each investing between one and five million Birr.

Ethio-Fidelity currently employs seven professionals under its new CEO, Desalegn Wendale, and operates from its offices on Ras Abebe Aragay St., in the Sengatera area, a.k.a Addis Abeba’s Wall Street.

Abebaw Zewedu, Ethio-Fidelity’s board chairman and a known figure in founding several banks, including Bunna, Tsehay, and Ahadu banks, stated the urgent need to list manufacturing and commercial companies. However, he voiced concerns about the limited availability of skilled human capital necessary for rapid sector growth, advocating immediate capacity-building initiatives.

ECMA officials have confirmed plans to issue additional licenses to promote fair trade practices and broaden the financial market base, mirroring optimism about substantial growth potential in investment banking. Ethiopia currently boasts 32 commercial banks, 17 insurance companies, over 30 microfinance institutions, and approximately 350,000 retail investors, which experts believe sets the stage for rapid capital market expansion in the near future.

For Dakito Alemu (PhD), assistant professor of accounting and finance at Addis Abeba University, companies’ readiness to list publicly has much to desire, noting that preparations could require six months to two years. Companies are required to develop comprehensive financial reporting, governance frameworks, internal control mechanisms, and corporate governance structures, areas where many firms currently lag.

“I don’t believe many of them are ready,” Dakito told Fortune.

Dakito raised concerns about the long-term sustainability of employing foreign expertise, arguing for the necessity of domestic capacity building to ensure sector growth. Capital market authorities recently established a digital academy to address workforce challenges and educate future capital market professionals.

For Brutawit, leading WCIB represents a historic achievement and an opportunity to influence the evolving financial sector.

“It’s a privilege,” Brutawit told Fortune.

The opening of the logistics sector to multimodal operations has come with tight restrictions, reserving key strategic commodities and trade routes exclusively for the state-owned giant, the Ethiopian Shipping & Logistics  (ESL).

Federal government officials expect the partial liberalisation to boost efficiency in a logistics sector that has been long criticised for poor performance and high costs. A recent World Bank report ranked Ethiopia poorly, with a logistics performance score of 2.94 out of five.

Djibouti has served as Ethiopia’s main gateway for two decades, handling 95.1pc of its imports during the first half of this year. Djibouti relies heavily on the Suez Canal, which accounts for about 30.6pc of global container traffic, facilitating the movement of over one trillion dollars worth of goods annually. According to the UN COMTRADE, Ethiopia’s imports from China reached 5.57 billion dollars in 2023, while imports from the UAE totalled 578 million dollars.

Multimodal logistics involves handling cargo through various transportation methods, vessels, railways, and trucks. ESL, a state-owned enterprise managing roughly 90pc of cargo traffic bound for Ethiopia, monopolised this sector entirely. ESL controls critical routes and commodities, particularly bulk shipments like fertilisers and capital goods, essential to the national economy. Six companies were allowed to enter the market in an unprecedented policy shift to increase competition and efficiency.

However, two of Ethiopia’s largest import markets — China and the United Arab Emirates (UAE) — are reserved exclusively for ESL, sharply limiting opportunities for incoming competitors. Bulk cargo shipments, too, remain off-limits to these companies.

According to Yalew Tesfaye, a senior official at the logistics administration of the Ethiopian Maritime Authority (EMA), multimodal operators could generally handle imported cargo, yet bulk cargo remains strictly under ESL’s control.

“The state-owned enterprise has to be protected,” said Yalew.

While the logistics corridor was slowly opening for competition from the private sector, safeguarding ESL appears to be a priority for policymakers. Under the new policy, multimodal operators should establish their own expansive terminals or lease from eight dry ports owned by ESL, or other companies.

ESLSE operates eight dry ports nationwide, notably the Modjo terminal in the Oromia Regional State, built in 2009. It covers 150hct and handles approximately 78pc of the country’s imports.

Berisso Amalo, CEO of ESL, cautioned against renting the company’s dry port spaces to competitors, anticipating detailed studies to determine the advantages.

“We can’t just say yes,” Berisso told Fortune. “It’s a competition after all.”

He also recognised the new entrants as an opportunity for ESL rather than a threat, seeing competition as a driving force to improve his company’s operational capabilities.

“We’re already improving our infrastructure and technology in preparation for competition,” Berisso said.

Cosmos Multimodal Plc,, Tikur Abay Transport Plc, Panafric Global, Ethio-Djibouti Railway S.C., Ethio-Rail Logistics Plc, and Gulf Ingot FZC Multimodal Operator have received authorisation to operate. Authorities have set rigorous conditions for their market entry, including appointments of boards of directors with at least five years of relevant industry experience, developing or leasing terminals covering at least five hectares, operating a minimum fleet of 30 trucks, and maintaining warehouse facilities of at least 30,000Sqm, built from concrete.

“They’ve gone through strict requirements and have proved their capability,” said Yalew.

He anticipates more operators might join if authorities deem additional entrants feasible. Officials from his Authority are coordinating closely with the National Bank of Ethiopia (NBE) and the Ethiopian Customs Commission to facilitate customs clearances and banking procedures for the new operators.

“Companies have received all approvals to start operation,” Yalew told Fortune.

Yet industry veterans have expressed scepticism about the reform’s limited scope. Daniel Zemichael, former president of the Ethiopian Freight Forwarders & Shipping Agents Association (EFFSAA) and general manager of Freighters International, pointed out the limitations new entrants face. With about 70pc of imports sourced from China and the UAE, the newcomers will only have access to about 20pc of the market.

ESL’s dominant position, managing over 80pc of Ethiopia’s trade, presents tough competition for incoming companies seeking substantial market share.

“This shows that multimodal operation is still monopolised,” said Daniel.

ESL operates with a fleet of 11 vessels capable of carrying over 25,000 containers, providing negotiation power internationally. It earned more than 14.4 billion Br in profits, prompting criticism about its monopolistic position and the tariffs imposed on customers lacking alternative choices.

“New operators should build networks from scratch,” Daniel said. “Profits will come gradually for the new entrants.”

He believes while they might initially struggle, increased competition could eventually improve service standards, pricing, and efficiency.

Ethio-Rail Logistics Plc, one of the newly licensed operators, illustrates the cautious optimism within the industry. Formed through a joint venture between the state-owned Ethiopian Railway Corporation and GetAs International Plc, the company has a paid-up capital of 350 million Br, with the state corporation owning a majority stake. It plans to begin operations at two of its six dry ports — Endode and Dire Dawa — within six months and intends to charter vessels from international shipping giants such as Maersk and MSC.

“We plan on cooperating with ESL,” said Gashaw Haile, CEO of Ethio-Rail Logistics with over three decades of experience.

Despite his willingness to cooperate, Gashaw criticised the authorities’ decision to exclude the new operators from bulk shipments and key markets, arguing that genuine liberalisation should permit unrestricted competition.

“We’re not here for some markets but all,” Gashaw told Fortune. “It’s a liberalised market.”

He urged the authorities to reconsider their protective posture toward ESL.

Another newcomer, Cosmos Multimodal Plc, formed by merging Gada Transport & Logistics S.C., Tradepath International Plc, and Awash Transport, is preparing to enter the market with a 15hct dry port in Mojo. Backed by a capital investment of 350 million Br, its CEO, Getu Hunduma, could not conceal his disappointment over the recent discovery of the authorities’ decision to reserve important markets for ESL.

“We thought we had been allowed to reach all markets,” Getu said, concerned about limited opportunities.

Cosmos plans to explore alternative rental options rather than leasing ESL’s dry ports and wants to negotiate to address the restrictive decisions. Despite initial hurdles, Getu voiced optimism.

Gulf Ingot FZC Multimodal, another entrant, is a subsidiary of Dubai-based Gulf Ingot FZC Plc, a conglomerate founded in 1995 with diverse interests in manufacturing, construction, and transportation. The firm, currently operating with a fleet of 160 vehicles providing unimodal services, is preparing its first multimodal dry port in Dire Dawa, covering 50,000Sqm. It plans to acquire four ships and intends to cooperate with international shipping companies and the Ethio-Djibouti Railway Corporation.

“We’ll be cooperating with other giants,” Yitbarek Zewde, board chairman of Gulf Ingot, said.

Despite current restrictions, he hopes to build a customer base in what he believes are  “There are untapped opportunities beyond the restricted markets,” He told Fortune.

Industry expert Mathiwos Ensermu (PhD) voiced cautious optimism about the potential for improved logistics efficiency through competition. Drawing parallels to the banking industry, Mathiwos argued that private-sector competition has historically improved performance over time.

“There will be cooperation as much as a competition between ESL and the new entrants,” Mathiwos said.

Stating the necessity for negotiation alongside competitive dynamics, he criticised the restrictions placed on critical routes and commodities, emphasising that fair competition should define market structures.

“Authorities should rethink the strategy,” said Mathiwos.

The Institute of Ethiopian Standards has introduced revised fees and new product marking systems targeting quality, accountability, and revenue collection. Its authorities say digital transformation is critical to improving product quality and traceability and addressing ongoing issues that persist despite existing manual watermark protections.

“We’re currently building a system to introduce that,” said Oliyad Lencho, the lead executive responsible for scheme and standard mark administration.

According to Oliyad, manual marking systems previously used were insufficient to distinguish quality goods from counterfeit and substandard products, enabling illicit trade networks to flourish.

“Digitising these marks with scannable technology will enable consumers to verify authenticity and make informed purchasing decisions,” he said.

Under the new regulatory framework, data-encoded digital marks will soon become mandatory for all essential products. The Institute is partnering with the Ethiopian Artificial Intelligence Institute (EAII) to launch the digital system in the coming fiscal year.

The authorities disclosed that new certification categories such as Diamond, Import, Halal, Green Product, and Organic are being introduced alongside digital marking. The Diamond mark will display the highest product standards, while the Import mark will be introduced by the end of the current fiscal year. Other categories will gradually follow.

However, financial constraints presented limitations to the ambitious implementation plans.

“All our plans require financing, which we currently lack,” said Oliyad.

The Institute, operating on an annual budget of 70 million Br, plans to generate over 100 million Br annually through fees collected from businesses.

The Institute oversees a comprehensive database comprising over 11,000 standards and 395 mandatory products, including edible oils, flour, salt, and beverages. Its authorities argue that the regulatory overhaul addresses long-standing inefficiencies. The new regulation revises legislation from two decades ago, when fees based on annual sales were first collected. After the Ethiopian Quality and Standard Authority split into four entities, including the Institute and the Ethiopian Conformity Assessment Enterprise, fee collection became inconsistent and disorganised, prompting the authorities to reinstate and expand fee coverage.

Companies will be required to remit up to 0.5pc of their annual gross revenue. The fee structure categorises industries into 10 groups covering manufacturing, agriculture, and services. Sectors such as leather, textiles, medical supplies, engineering, steel, construction, and chemicals will pay rates ranging between 0.1pc and 0.5pc. Alcoholic beverages will face fees of 0.5pc, non-alcoholic beverages of 0.4pc, and edible oil products of 0.1pc.

The industries’ responses have been mixed, with the Ethiopian Beverages Association voicing its concerns. Ashenafi Mered, the Association’s general manager, argued that the industry was caught off guard, with many companies already struggling financially unable to handle additional fees. Representing 134 companies, the Association is negotiating for lower remittance rates, hoping to reduce bottled water fees by half from 0.4pc and non-alcoholic beverages down to 0.1pc.

Leaders of the Ethiopian Edible Oil Producers & Manufacturers Association (EOPMA) warned that additional financial burdens from regulations could devastate the already struggling edible oil industry. The number of fully operational edible oil factories has sharply declined by half from 60 three years ago, and many operate irregularly due to financial pressures.

“Manufacturers cannot afford any additional payments,” said Mohammed Yusuf, chairman of EOPMA.

Mohammed blamed tax burdens and unfair competition from duty-free imports as problems his industry faces. Price hikes and input shortages have compounded the industry’s difficulties.

“It’s fuel to fire,” Mohammed said, noting companies already face severe material shortages.

An example of the dire situation is Abay Edible Oil, a bottler based in Bahir Dar, in Amhara Regional State. Employing more than 450 workers and capable of producing 200,000Ltrs of oil daily, the company faces security problems, regular power outages, and rising costs. Deputy Manager Yeshambel Mengesha cautioned that escalating payment requirements from multiple regulatory bodies are draining the company’s capital and forcing layoffs.

“We’re a few steps away from shutting down,” Yeshambel said.

Quality assurance responsibilities span several agencies. The Ethiopian Conformity Assessment Enterprise handles inspections, testing, and certification, enforcing standards through extensive laboratory capabilities. According to Tekea Berhane, communications director of the Enterprise, testing procedures are initiated upon requests from regulatory agencies such as the Ethiopian Food & Drug Authority (EFDA) and the Ministry of Trade & Regional Integration.

“Only products that comply with mandatory standards can enter the market following rigorous testing,” said Tekea.

The Enterprise, equipped to test over 4,000 product types and maintain a database of around 4,000 parameter standards, prevented close to 880tns of substandard products from entering the market last year, leading to the closure of about 15 domestic manufacturers. However, it does not pursue legal action in cases of false certifications, which creates a gap in regulatory enforcement.

Another federal agency, the Ethiopian Food & Drug Authority, has also increased mandatory requirements, recently enforcing the fortification of edible oils with vitamins and minerals.

Yet, industry representatives argue such mandates further exacerbate operational pressures.

Kalessilassie Agmus, quality assurance manager at Agrifood, accepted rigorous testing as essential for ensuring product safety.

“Our role in ensuring quality products is vital,” he said, urging regulatory bodies to expand mandatory quality standards and clarify production specifications.

Bless Food Laboratory, established in 2011 and co-owned by Belete Family (51pc) and Onyx Development, affiliated with French firm Nutriset, represents private-sector involvement in quality assurance. Operating advanced labs in Legetafo, on the northern outskirts of Addis Abeba, Bless Food inspects over 100 product types weekly across 1,000 parameters, issuing certifications critical for agricultural and processed products.

Experts say regulatory efforts alone cannot ensure market-wide quality improvements without consumer participation.

Michael Haileselassie, a quality consultant and deputy manager at Indigo Quality Management & Consultancy Plc, argued that Ethiopia faces systemic challenges such as weak regulatory enforcement, inadequate consumer awareness, and unfair competition. He believes consumer behaviour in developing markets often prioritises cost over quality, differing markedly from developed markets where quality standards influence purchasing decisions.

“There is a lack of consumer awareness about quality,” he said. “Historical regulatory lapses have cultivated tolerance toward substandard practices.”

Technological advancements like digital marking could ensure product authenticity and traceability, but Michael warned that their success would depend heavily on effective regulation and consistent enforcement. He called for empowered inspectors and stronger oversight and urged a shift in consumer behaviour.

“Consumers need to hold businesses accountable,” Michael said. “A cultural shift is essential.”

The Institute of Ethiopian Standards officials acknowledge these issues but maintain that spreading financial responsibilities across businesses is necessary to achieve broader accountability and quality.

Oliyad echoed this viewpoint.

“Burdens need to be shared,” he told Fortune.