ASSESSMENT OF ETHIOPIA’S READINESS TO EFFECTIVELY RUN THE CAPITAL MARKET AND ITS OPPORTUNITIES AND CHALLENGES

Abstract

Despite recent initiatives to promote awareness of share companies in Ethiopia, the development of a robust capital market has yet to be fully realized. Over the past five decades, Ethiopia has consistently required establishing a functional capital market; however, sustained growth and development within this sector remain at an infant stage. The main objective of the study was to assess Ethiopia's readiness to effectively run the capital market and its opportunities and challenges. To achieve this, the researcher employs a cross-sectional descriptive study design, incorporating both qualitative and quantitative research methods to gather and analyse primary data. The target population comprises employees and higher representatives from the National Bank of Ethiopia, the Ethiopian Capital Market Authority, and selected Ethiopian Commercial Banks from the head office. A purposive sampling technique is used to select an appropriate sample from the target population or individuals with knowledge and experience relevant to the study's issue. Primary data was collected through structured questionnaires and interviews. The collected data was analysed using the SPSS statistical package. Quantitative data analysis involves the use of descriptive statistics such as frequencies, percentages, mean, and standard deviation. In addition, qualitative data analysis involves the preparation of narrative summaries. The study found that Ethiopia had set up important institutions like Ethiopian capital market authority and made basic rules for a capital market but still faced big gaps in infrastructure, skills, public awareness, and rule enforcement. To fix these problems, it needed financial education for people, training for professionals, better laws, investment in technology, and closer teamwork among government agencies.

Keywords

• Challenges
• prospects
• Capital market
• commercial banks
• ethiopia

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