Nigeria's United Capital Plc (NGX: UCAP) has become the first foreign institution to receive an investment banking licence in Ethiopia, marking a significant step in the country's efforts to open and develop its nascent capital market.

The Ethiopian Capital Market Authority (ECMA) granted the licence on June 5, following months of regulatory review and legal vetting involving the regulator, the Ethiopian Investment Commission and other government institutions, local media reported.

United Capital, a diversified financial services group providing investment banking, asset management and securities trading services across Africa, will operate through a wholly owned subsidiary, United Capital Financial Services PLC, making it the first foreign investment bank to establish a local presence in Addis Ababa. The company said it has committed more than $1.5mn in capital to support its Ethiopian operations. 

ECMA Director General Hana Tehelku said the approval reflects Ethiopia's efforts to build a competitive capital market capable of attracting foreign expertise and investment. She added that the regulator conducted extensive due diligence, including verification of United Capital's regulatory standing with Nigerian authorities.

According to ECMA, the company may eventually operate under up to four licence categories, including investment banking and collective investment scheme management.

The development is expected to boost confidence in Ethiopia's emerging capital market and could encourage additional foreign financial institutions to enter the country. While D & T Management Consulting, a subsidiary of Deloitte, previously received a securities investment adviser licence, United Capital is the first foreign institution to secure an investment banking licence.

The Nigerian company also recently obtained an investment banking licence in Rwanda. Commenting on the developments, Group CEO of United Capital Group, Peter Ashade, said:

“Ethiopia and Rwanda represent two of Africa’s most significant growth opportunities, and we are pleased to receive these licences at an important moment in the region’s capital market development journey. The region’s strategic location as an international trade route connecting Africa and the East, a large youthful workforce, and ongoing reforms are expected to continue attracting foreign investment.

“This is also a significant milestone for our country, Nigeria, as we export our business expertise; for Ethiopia and Rwanda as they open their doors to foreign players; and to the African continent, indicating that bilateral collaboration can be a major catalyst for accelerating economic development on a continental scale. This is Africapitalism in action.”

Ashade praised the Ethiopian government's financial sector reforms and said the company received strong support from ECMA throughout the licensing process.

He added that United Capital intends to contribute to the development of Ethiopia's financial sector through human capital development, capacity building and professional training programmes for local market participants.

Hana said the regulator expects the company's greatest contribution to come not only through capital inflows but also through skills transfer and technical expertise. She said United Capital would be expected to hire, train and empower Ethiopian professionals, helping to build a domestic pool of investment bankers, analysts and compliance specialists.

United Capital's Africa Director, Ejikeme Okoli, said the firm's experience across African markets positions it to support the development of Ethiopia's financial ecosystem. He added that Ethiopia forms part of the group's broader pan-African expansion strategy.

Ethiopia formally launched its capital market reforms in recent years as part of wider efforts by Prime Minister Abiy Ahmed's government to liberalise the economy and attract foreign investment. The Ethiopian Securities Exchange (ESX), launched in January 2025, is expected to play a central role in mobilising domestic and international capital for businesses and infrastructure projects.

Ethio Telecom (ESX:TELE) officially listed on the Ethiopian exchange in May, more than a year since the close of its initial public offering (IPO), becoming the fourth company and the first non-financial institution to join the ESX.

Wegagen Bank (ESX:WEGA) was the first company to register on the exchange, followed by Geda Bank (ESX:GEDA) and Awash Bank (ESX:AWASH).