Assessment of Factors Affecting the Development of Capital Market in Ethiopia
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Date
2025-06-18
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A.A.U
Abstract
This study focused on the challenges affecting the development of the capital market in Ethiopia in line with its prospects for investors and government for economic development aiming to describe possible challenges related to the development and efficient operation of the market. The study applied a descriptive research design with qualitative data analysis method based on the data collected trough structured questionnaire from key participants like; National bank of Ethiopia, Ministry of Finance and Economic Commissions, Commercial banks board of directors, Insurance companies, Investors and other professionals. The study reveals that the effect of level of awareness, lack of adequate regulatory system, inflation, infrastructure and development of financial institutions, investors' business culture, and government privatization policy are the major challenging factors for the development of Capital market in Ethiopia. The study also forwarded recommendations like taking initiatives and cascading the responsibility of capital market development for different financial institutions. Furthermore, laws and regulations, technological infrastructure, and capacity of financial and non-financial institutions should be evaluated and provide support. Generally, government should accept financial support from different professionals and organizations either it be local or international, as long as the interest of the country is secured.
Key Words: capital market, development, infrastructure, financial institutions, GDP.