The Ethiopian Capital Markets Authority (ECMA) focuses on setting up local currency bond markets with an estimated budget of around 1.5 million dollars, signing a four-year technical assistance program with the International Finance Corporation (IFC) last week.

A reform plan for market-based issuance of government securities, effective government debt management, and improved capacities of regulators and market participants along a pipeline of demonstration transactions are the key goals set to be realised by the end of the project in 2027.

Dubbed a development project launch, the signing ceremony saw the attendance of Mamo Mehretu, board chairman of the ECMA and governor of the National Bank of Ethiopia (NBE), Brook Taye (PhD), director general of the ECMA along with Madalo Minofu, country manager of the IFC and Aliou Maiga, director of IFC financial institution group.

The Director General outlined the importance of the agreement in helping create a securities market in which both government and corporate debt securities can be transacted for the first time in Ethiopia's history on a large scale.

Brook pointed to the key role the demonstration transactions by the IFC will play in anchoring securities to kick-start the market into full gear.

"They [IFC] will help us define the necessary tasks to create investor confidence," he underscored.

While explicating the indications by Governor Mamo that Ethiopia is moving towards an interest rate-based monetary policy framework, Brook told Fortune, "Successful implementation of monetary policy will require utilising debt securities".

He stated that liquidity constraints and excesses along with interbank overnight transactions facilitated through capital markets, perfectly complement aspirations for a well-managed monetary policy.

The Director General revealed that the public offering directive set to define the manner in which companies may open themselves up to investment from the public will be availed to public consultation in four weeks.

"We've not given any of these companies permission," he told Fortune, referencing the current wave of companies flooding advertisements with preposterous returns on investment.

Brook did not fail to acknowledge that almost all existing banks and insurance companies in the country mobilised massive resources without capital markets. "There are many that went under with people's money as well," he said.

Mamo, rarely seen in capital market functions, revealed that a three-year strategic plan for the nation's economy, which includes the manner in which financial markets will be realised, is set to be availed within a month.