Possibilities Of Developing Capital Market In Ethiopia
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Date
2006-07
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Publisher
A.A.U
Abstract
One of the phenomenal events of the 21 51 century is the globalized feature of both the
factor and product market all over the world. This, does not only created opportunity for
the developing countries for a relatively easier access for the products and services of
developed countries, but also helped the developed one's to enjoy the benefit of
diversification and exploit the potential cheap labor power, un exploited natural resource,
and high purchasing power bloated by large population size. Moreover, the globalization
trend also made it possible for a relatively easy transfer of technology and above all the
transfer of finance.
Shortage of finance is a major constraint in realization of economic development for
developing countries. They usually rely on foreign borrowing to finance their larger and
long term projects. However; this source is the most unreliable and remote. Thus, it is
desperate move fro developing countries like Ethiopia to search for the alternative means
to reap the premiums made available in the global market. The World Bank and IMF
recommend to countries to exercise liberalization and deregulations of the economy to be
able to participate and benefit from the global market. Among the most important
intermediations recommended for integration in- the global market and mobilize and
channel both foreign and local resources to wards the most productive sector is the
development of capital market.
Recognizing the role played by security market in mobilizing and allocating resources
more than a dozen of African countries developed a stock market. Ethiopia is not among
this group. This paper focuses on evaluating the need and identifying the availability of
the pre-requisites for stock market development and concludes by recommending the
possibility of emerging stock market in Ethiopia.
Description
In Partial Fulfilment Of The Requirements
For The Master Degree In Business
Administration
Keywords
Capital Market In Ethiopia