PROSPECT AND CHALLENGES OF ESTABLISHMENT OF CAPITAL MARKET IN ETHIOPIA

Abstract

The study examines the prospects and challenges of establishing a capital market in Ethiopia, using a descriptive research design that combines semi-structured questioner and thematic analysis of secondary data. The sample size consists of 15 participants, selected through purposive sampling. The study identifies several challenges hindering the establishment of a capital market in Ethiopia, including inadequate regulatory framework, lack of investor awareness and education, political instability, insufficient government support, and limited access to technology, information availability, corporate governance practices, and a lack of trust in the financial system. Additionally, the study highlights the importance of addressing limitations in financial infrastructure, with a strong consensus among respondents that the government's role in reforming financial infrastructure is critical. Public-private partnerships are also seen as a viable solution to address infrastructure gaps. Overall, the study provides valuable insights into the potential benefits and challenges associated with establishing a capital market in Ethiopia, and highlight the need for a comprehensive approach to address the identified challenges and create a conducive environment for a thriving capital market.