Economy
Draft Bill Caps Foreign Portfolio Ownership At 15pc In Listed Ethiopian Firms
The Reporter · 3 hours ago · Read the Full Story on The Reporter
AI SUMMARY
A proposed Ethiopian Capital Market Authority regulation capping foreign portfolio investment ownership at 15 percent has sparked stakeholder debates over capital controls, repatriation, and institutional readiness.
- The Ethiopian Capital Market Authority drafted a regulation capping single Foreign Portfolio Investor ownership at 10 percent of an issuer's paid-up capital.
- Category I FPIs, including governments and sovereign wealth funds, may hold up to 15 percent subject to prior approval.
- Category II FPIs cover other eligible entities like corporates, foundations, and non-resident retail investors.
- Total combined FPI shareholding in a single listed company is capped at 30 percent.
- FPIs are prohibited from holding board seats or participating in management under risk of reclassification as Foreign Direct Investment.
- A public consultation on the draft regulation was held in Addis Ababa on October 26, 2026.
- Market participants raised concerns over a mandatory one-year minimum holding period and foreign exchange availability for repatriation.
- The National Bank of Ethiopia is empowered to impose temporary capital flow management measures for up to 180 days during exceptional macroeconomic crises.
- All FPI assets must be safekept through ECMA-licensed Designated Custodians, though no local commercial banks have yet been officially licensed for custody operations.
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