Ethiopian Investment Holdings (EIH), the East African nation’s sovereign wealth fund, is poised to make a historic return to the global stock market with plans to invest in multinational corporations. This move marks Ethiopia’s reentry into international equity markets after more than a century, following Emperor Menelik II’s pioneering investments in New York stocks in the late 19th century.
The announcement underscores Ethiopia’s ambition to diversify its investment portfolio and strengthen its foothold in the global financial system. According to Brook Taye, CEO of EIH, the fund is in the final stages of acquiring stakes in foreign companies through Euronext Paris, the Paris-based stock exchange. While specific details of the targeted companies and the size of the investments remain undisclosed, the move signals a strategic shift for Ethiopia as it seeks to leverage its growing economic influence on the global stage.
A Historic Return to Global Markets
Ethiopia’s last foray into international equity markets dates back to the late 19th century when Emperor Menelik II invested in New York stocks, a bold move that was unprecedented for an African nation at the time. Over a century later, EIH’s planned investments represent a renewed effort to integrate Ethiopia into the global economy and capitalize on international market opportunities.
The decision to reenter global markets comes as Ethiopia continues to implement sweeping economic reforms aimed at liberalizing its economy and attracting foreign investment. The country, which has one of the fastest-growing economies in Africa, has been working to open key sectors such as telecommunications, banking, and logistics to private and foreign investors.
Strategic Investments and Economic Backbone
EIH, established in 2021, serves as the investment arm of the Ethiopian government and oversees 34 state-owned enterprises (SOEs), including some of the country’s largest and most strategic assets. Among these are Ethiopian Airlines Group, Africa’s most profitable airline; Commercial Bank of Ethiopia, the largest financial institution in the country; Ethio Telecom, the state-owned telecommunications giant; and Ethiopian Shipping and Logistics, a key player in the region’s trade and logistics sector.
These enterprises form the backbone of Ethiopia’s economy and provide EIH with the financial foundation to pursue international investment opportunities. By leveraging the revenue and expertise of these SOEs, EIH aims to build a diversified portfolio that includes both domestic and international assets.
Diversification and Global Ambitions
The move to invest in multinational corporations aligns with EIH’s broader strategy to diversify its holdings and reduce reliance on domestic markets. By acquiring stakes in foreign companies, EIH aims to generate higher returns, mitigate risks, and gain exposure to global best practices and technologies.
Euronext Paris, one of Europe’s leading stock exchanges, has been selected as the platform for these investments. The choice of Euronext reflects Ethiopia’s interest in tapping into European markets, which are known for their stability and robust regulatory frameworks.
Analysts suggest that EIH’s investments could focus on sectors such as technology, energy, and infrastructure, which align with Ethiopia’s long-term development goals. The fund’s entry into global markets is also expected to enhance Ethiopia’s credibility among international investors and pave the way for future collaborations.
Challenges and Opportunities
While EIH’s global ambitions are ambitious, they are not without challenges. The fund will need to navigate complex regulatory environments, currency risks, and geopolitical uncertainties as it expands its international footprint. Additionally, Ethiopia’s domestic economic challenges, including high inflation and foreign exchange shortages, could pose hurdles to its global investment strategy.
However, Taye remains optimistic. “We are committed to building a resilient and diversified portfolio that delivers value for Ethiopia and its people,” he said. “This is just the beginning of our journey to becoming a significant player in the global investment landscape.”
