Part 2 of 2 · Ethiopian market entry · Regenerative Africa Intelligence

Ethiopia’s state holding company, Ethiopian Investment Holdings (EIH), has a clear way of opening the economy: it lets people invest in state assets while the state keeps control. Citizens can buy small stakes on the new stock exchange and foreign companies can partner with EIH, but no one is buying control of the state’s flagship companies. For investors, that makes EIH the way into Ethiopia on its terms, and the same strategy has room to let far more of them in.

EIH is opening Ethiopia to investment, not to takeover, and it can widen who takes part without giving up control

Every route EIH has opened lets outside money in without selling control of the companies the state already owns: a 10% citizen offer in Ethio Telecom, a 25% state holding in the stock exchange, and new ventures built with partners such as Aliko Dangote. The approach is working for those who can take part. Its limit is reach. Because so few kinds of buyer could join, EIH’s first share sale raised ETB 3.2 billion of a ETB 30 billion target, while similar sales in Kenya and Rwanda that let more buyers in drew bids worth several times what was on offer.

In Part 1 we showed that the most open door into Ethiopia runs through EIH. This brief explains why the door is built that way, and how wide it can open.

New rules and a new team mean the next sale can include more buyers

• More buyers are now legal. The Collective Investment Schemes Directive, registered on 23 September 2026, allows mutual funds, money market funds and exchange-traded funds in Ethiopia. On 29 September 2026 the Ethiopian Capital Market Authority (ECMA) posted a draft Foreign Portfolio Investment Regulation, not yet in force.
• A new team. On 10 October 2026 EIH gained two deputy chief executives, Zeleke Temesgen and Jafar Bedru, and Dagmawit Shiferaw became head of ECMA.
• A decision to make. No decision has been announced on the 89.3 million Ethio Telecom shares that did not sell.

EIH holds the keys to Ethiopia’s state economy

EIH was set up in 2021, is wholly owned by the government and manages more than 40 state enterprises, including Ethiopian Airlines, Ethio Telecom and the Commercial Bank of Ethiopia. The Sovereign Wealth Fund Institute ranks it Africa’s largest sovereign wealth fund, with nearly USD 45 billion in assets.

It has also shaped the market around those assets. In May 2022 EIH signed the agreement with the Ministry of Finance and FSD Africa to set up the Ethiopian Securities Exchange (ESX), which opened in January 2025. EIH holds 25% of the exchange, the minimum state stake the law requires, and its chief executive, Brook Taye, chairs the exchange’s board. EIH is also the state partner on the largest new deals, from Dangote’s fertiliser plant to a planned fuel pipeline from Djibouti.

For an outside investor, almost every large opportunity in Ethiopia’s state economy leads back to EIH.

EIH is opening by design: participation without control

EIH’s approach is deliberate. “The government does not have a privatisation strategy: what we have is a state-owned enterprise reform strategy,” Brook Taye has said. Each route EIH has opened follows that line, letting money in while the state keeps control of the companies it already owns:

• Listed stakes for citizens. Ethio Telecom offered 10% of its shares, to individual Ethiopian citizens only, capped at 3,333 shares each, with institutions not eligible.
• New ventures with partners. Foreign companies build new projects alongside EIH rather than buying existing state companies. At Gode, Dangote holds 60% and EIH 40%.
• No sale of control. A planned sale of a large Ethio Telecom stake to a foreign telecoms partner was shelved in 2025, after interested bidders left the process.
• A listing plan of minority stakes. In 2024 Brook Taye said EIH planned to list companies in shipping, printing, insurance and duty-free shops.

The design is working for those who can take part

The results so far support EIH’s approach.

• Citizens have gained. The 47,377 Ethiopians who bought Ethio Telecom shares at ETB 300 saw them trade at ETB 430.10 in early October 2026, more than 40% above the offer price.
• Partners have committed. Dangote has committed more than USD 4 billion to Gode alongside EIH, and on 15 October 2026 pledged to list at least 10% of the venture on the ESX once production is stable.
• Value stays in Ethiopia. The precious metals refinery, opened on 10 October 2026, means gold that used to leave Ethiopia unrefined can now be refined in the country. And because the state keeps its stakes, the dividends do too: Ethio Telecom plans to pay the government ETB 43.1 billion in 2026/27.
• The exchange has backing. The ESX’s own capital raise drew offers of USD 26.6 million against a USD 11 million target.

The strategy’s limit is reach, not control

The price was not the problem. Ethio Telecom’s offer valued the company at ETB 300 billion, under 3 times its 2025/26 earnings before interest, tax, depreciation and amortisation (EBITDA) of ETB 113.1 billion (RA calculation). The constraint was who could buy. With only individual citizens eligible, the offer raised ETB 3.2 billion of its ETB 30 billion target, and Ethio Telecom has itself pointed to these limits as the reason demand fell short.

Other African states drew far more demand by widening the pool of buyers. Some sold more than Ethiopia would want to; the lesson is in who could take part.

The narrow reach also shows on the exchange. Six of its seven listings are private banks that listed by introduction, so no new money was raised, and in one week in late September 2026 a single bank stock made up about 98% of the value traded. Meanwhile Ethiopian institutions are looking for assets: the private-sector pension fund (POESSA) has ETB 183 billion invested and has told parliament it is studying the capital market.

EIH can widen participation and keep control

Each of these four moves, our own analysis, lets more people take part while the state keeps the controlling stake.

1. Open the unsold Ethio Telecom shares to Ethiopian institutions. Offer the 89.3 million shares to pension funds, insurers and the new collective investment funds, alongside citizens. The new owners stay Ethiopian, and long-term holders would deepen trading.
2. Build a listing pipeline of minority stakes. Start with the sectors EIH has already named: shipping, printing, insurance and duty-free. Egypt’s sovereign fund runs a pre-IPO fund that prepares state companies for listing in batches.
3. Make a listing tranche a standard term in partnerships. Dangote’s 10% pledge for Gode could become the model: each large joint venture offers a slice to Ethiopian investors once it is operating, and EIH keeps its stake.
4. Set out clearly how EIH’s roles at the exchange work. Young markets often start with the state at the centre: Saudi Arabia’s sovereign fund owned its exchange outright until 2021 and still holds 60%. Publishing how EIH acts as seller, shareholder and board chair would build the confidence that brings in larger funds once the foreign portfolio rules take effect.

The first three keep new ownership, and the dividends that come with it, in Ethiopian hands. The fourth prepares the market for foreign funds without changing who controls the state’s companies.

What this means for investors: come in on EIH’s terms

• Now: the partnership route. Bring capital and know-how, expect EIH as a significant partner, and, following Gode, expect a commitment to list a share in Ethiopia later.
• Next: Ethiopian institutions are the likeliest new buyers of listed state assets once a sale is opened to them. Foreign funds wait on the final portfolio investment rules.
• Not on offer: control of the state’s flagship companies.

What to watch in the next 12 months

1. A decision on the 89.3 million unsold Ethio Telecom shares, and who may buy them.
2. The final Foreign Portfolio Investment Regulation, and its limits on foreign holdings and taking money out of the country.
3. The first listing from EIH’s portfolio after Ethio Telecom, and whether it raises new money.
4. Whether the Djibouti pipeline moves from a memorandum to financing, and whether it carries a listing commitment like Gode’s.
5. The conflict in northern Ethiopia, as a test of investor confidence in Ethiopian assets.

Sources

All accessed 21 to 26 October 2026. RA calculations and options are labelled in the text.

• Ethio Telecom, share sale announcement and 2025/26 annual business performance report
• Birr Metrics, State telecom enters ESX with 89 million unsold shares, 26 May 2026
• The Reporter, Ethio Telecom to try again after initial IPO yields poor results, 26 Apr 2025
• Capital, Ethio Telecom sets 295 billion birr revenue target, Sep 2026 (planned dividend)
• StockMarket.et, ESX crosses half a billion birr in weekly value traded, 2 Oct 2026
• StockMarket.et, Dagmawit Shiferaw takes the helm at ECMA, 10 Oct 2026, and Tariku Demissie appointed acting Ethio Telecom CEO, 18 Oct 2026
• ECMA, laws and regulation (Collective Investment Schemes Directive 1150/2026; draft Foreign Portfolio Investment Regulation)
• ESX, board of directors
• EIH, news, Oct 2026 (precious metals refinery)
• Ethiopian Monitor, EIH signs MoU for USD 660m Ethiopia to Djibouti petroleum pipeline, 25 Sep 2026
• Dawan Africa, Ethiopia opens precious metals refinery, 11 Oct 2026
• The Reporter, Dangote pledges to list 10pct of Gode fertilizer venture, Oct 2026
• Billionaires.Africa, Dangote plans to list 10% of his Ethiopian fertiliser business, 18 Oct 2026 (budget and capacity)
• African Business, Ethiopian SOE boss: our strategy is reform, not privatisation, Dec 2024
• Mobile World Live, Government targets local investors for Ethio Telecom stake, 2025
• Addis Insight, Ethiopia pauses plan to sell 35% of Ethio Telecom shares, 24 Aug 2025
• The Reporter, Ethiopian Investment Holdings celebrates revenue jump, Apr 2025 (Sovereign Wealth Fund Institute ranking)
• US State Department, 2026 Investment Climate Statement: Ethiopia, Sep 2026
• The Reporter, Pension fund eyes securities exchange (POESSA)
• Bizna Kenya, Safaricom 2008 IPO subscription; IFR, Safaricom: Emerging EMEA equity issue of the year
• African Business, Bourse leads new age economics for Rwanda, Apr 2011 (Bralirwa)
• Citizen Digital, Kenya Pipeline IPO raises KSh 112.3 billion, Mar 2026
• Saudi Tadawul Group, interim financial statements, Jul 2026
• Business Today Egypt, SFE’s pre-IPO fund prepares Elab as its first public offering, Mar 2023
• The EastAfrican, Ethiopian securities exchange raises targeted USD 11m capital, 7 Apr 2024 (May 2022 agreement; capital raise)