Benefits and Challenges of the Upcoming Capital Markets in Ethiopia
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Date
2020-06
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A.A.U
Abstract
Ethiopia is one of the few countries in Africa that does not have a stock
market. Currently, the government has a plan to establish a secondary cap-
ital market by 2020. There are controversial issues among researchers re-
garding the relevance of the capital market in developing countries. Thus,
this research is aimed to clear these issues by analyzing the country's
current economic situation. The researcher is used the country's current
prevailing secondary data from the web pages of NBE, World Bank and
other sources and try to persuade some of the bene ts and challenges of
the country regarding the upcoming implementation of the capital mar-
kets. Based on the data sources, I have found out that the capital markets
help to complement the development of the nancial sector, highly e -
cient mechanism for channeling local savings to investments, reduce cost
of capital and unemployment, o er liquidity to investments, reduce invest-
ment risks, help for government nancing and contribute for uni cation of
the country. However, capital markets are not free from challenges. Some
of the challenges that the emerging market in Ethiopia faces are lack of
experience of expertise, e ective regulation and supervision, nancial in-
frastructure and investors' nancial literacy. Finally, ways to alleviate
these challenges are forwarded to the respective bodies.
Description
Thesis Submitted to Addis Ababa University, School of Graduate Studies
in Partial Ful llment of the Requirements for the Degree of Master of
Science in Accounting and Finance
Keywords
Upcoming Capital Markets