Why Invest in Ethiopia

1. Political and economic stability

Ethiopia has stable political climate with the prevalence of consolidated peace and democratic governance. The state has exerted consistence commitment to the private sector thereby securing annual economic growth attested by double digits since 2003. Ethiopia offers safe and secure working and living environment as identified by the UN and the International chamber of commerce (ICC) being the key assets for investors in Ethiopia.

2. Policy framework

Investing in Ethiopia entitles remittance of invested capital (dividends and interest) and principal and interest payment on external loans, payments associated with technology transfer, proceeds from sales or liquidation of an enterprise, salaries and other payments. With the exception of the banking, insurance, telecom, postal services (except courier services), Electric power provision, all sectors are open to foreign investment with 100% ownership.
Ethiopia is a signatory of international conventions on settlement of investment disputes and is a member of international investment related institutions like the multilateral investment guarantee agency (MIGA).

The state is also employing up-to-date administration structure aimed at providing a one stop shop professional foreign investment service through the Ethiopian Investment Agency (EIA). Pursuant to the investment code 1991, investors are protected from expropriation.

3. Existence of relevant clusters

Uniqueness of Ethiopia in investment is the availability of raw materials for almost all major sectors. Because of its strategic location, investors have easy access to import raw materials when not available in the country.

4. Strong market with excellent market access

• Ethiopia has the second largest population in sub Saharan Africa means a strong internal market for investors. The large and fast growing domestic market offers good prospects for investment in consumer goods industries such as food, beverages, tobacco, plastic products, soap and detergents, drugs and pharmaceuticals, paper and paper products and electrical and electronic products.
• Its membership to various economic organizations like WTO, COMESA and ACP, AGOA, EU (EBA) grants preferential rights in developed western markets. Under the generalized system of preferences (GSP), a wide range of Ethiopia's manufactured products are entitled to preferential duty treatment in the United States, Canada, Japan and most EU countries.

5. Strong Natural Resource Base

  • Good rainfall, rich soils, and favorable temperature ranges. Climate is identified by the U.N. and ICC as “exceptional” offering “an excellent environment for various agricultural activities.”
  • A range of mineral deposits like gold, tantalum, platinum, nickel, potash and soda ash are unexploited.
  • Urban and rural land is available on a leasehold basis. Lease rights over land can be transferred, mortgaged or sub-leased together with on-build facilities. Leaseholders have the right to use urban land for up to 60 years in Addis Ababa and up to 80 years in other smaller towns, with leasehold renewal permitted (generally the range in the country is between 50-99 years depending on purpose and location).

6. Significant Tax Incentives and Conducive Tax Environment

Investors in Ethiopia are provided with an variety of investment incentives all with the hope of guaranteeing profitability and strong national economy. Please visit Investment incentives for further.

7. Attractive Environmental Law Regulation

Environmental policies in Ethiopia are underdeveloped giving investors an edge in engaging in investments which can be categorized as environmentally degrading and therefore not permissible in other countries.

8. Diverse Investment Opportunities

The Ethiopian government has increasing tendency of attracting investors in almost all areas. Major investments are required in areas of agriculture and Agro-processing, textile industries, leather and hide processing, horticulture/cut flower, building materials manufacturing and tourism. To top that up; privatization measures in the country are flourishing with 111 state-owned enterprises being identified for privatization, 43 state-owned enterprises already in the pipeline, mainly in the manufacturing, construction, agriculture/agro industry, hotels, transport, trade and mining sectors. Recent trends reveal the willingness of the state to relinquish ownership of major sectors as witnessed in the privatization of all of the countries breweries.

9. Skilled Labor

Ethiopia presently turns out more than 10,000 university graduates per year putting major contribution in areas of business, Management, economics, accounting, law and engineering which are essential inputs of investment activities. Apart from the ever flourishing private universities and colleges, there exist 151 technical and vocational training schools. Higher education is conducted solely in English equipping graduates with excellent communication and technical skill in the language.

Graduate monthly salaries range from $85 to $105 and expatriate employees are permitted in senior positions, with prior consent from the Ethiopian Investment Commission (where employer is sole or major owner or shareholder of enterprise). Expatriate experts are also permitted, as long as the investor trains his/her replacement within a designated time period.

10. Good Infrastructure Standards

  • Air Transport: Including the national flag carrier, Ethiopian with its outstanding global performance, there are three international and 18 domestic airports, with international flight links to over 45 cities on four continents (12 in Africa, 12 in Asia, five in Europe and two in North America), and domestic links to 26 destinations. Modern air cargo terminal and maintenance hangar in Addis soon to be completed
  • Road Transport: Investment in road infrastructure a high state priority, with an expanding road network and international highways linking Ethiopia with its neighbors. In 2007/08, the total road network, excluding community roads, had reached 27,563 miles out of which 46% are track roads and the remaining 54% are rural roads with annual growth rate of 5%. Based on the classification of the road network, about 12,694 miles are in the Federal network, asphalt road and gravel road constituted 30% and 70% respectively. All weather rural road grew by 7% per annum constituting 14,869 miles of the total road network in 2007/08. In the same year, the community road, non engineered road was 43,520 miles.
  • Railways and Ports: 500 mile rail service linking Addis to the port of Djibouti (on the Red Sea coast) via the eastern cities of Dire Dawa and Nazareth. Ethiopia also has access to Berbera in the East and Mombassa in the south.
  • Telecom: The state monolpoly Ethio – Telecom connects all regional cities and a number of smaller towns with mobile cell phone, fax, land line and high speed internet networks. International communications links are maintained through two satellite earth stations, providing telephone, internet, telex, fax and TV services.
  • Power Supply: Ethiopia has vast hydropower and promising geothermal energy resources, with nine hydro-electric power plants. To date, the aggregate electricity generated is less than 2% of the potential, and developing this area is a Government focus. The main industrial towns are all connected to the national grid, and electricity is relatively cheap. The Government has liberalized the sector, allowing foreign investors to participate in generating electric power by setting up hydroelectric power plants, although national grid transmission and distribution remains with the state-owned Ethiopian Electric Power Corporation. A major step forward in hydroelectric power supply is taken when the state announced the beginning of the great. At present Ethiopia has started exporting power to Djibouti covering 33% of the latters power demand.

11. New infrastructure projects

A zealous plan to radically change country features and sustain rapid economic growth is underway. The GTP (Growth and transformation Program) aims at realizing Ethiopia as a middle income nation with in the coming five years.

Taking the lion share in the GTP is the great renaissance hydro electric dam over the river Nile. It is designed to have an installed capacity of 5250 MW, which is threefold of the 1885.8 MW installed capacity of 12 currently operational hydro power plants. Ranking largest in Africa and 10th in the world the dam is planned to generate 15,100 Giga WH per year (equivalent to 15.1 billion-kilowatt energy per year). This means giving 8 hours of per capita light to 86 million Ethiopians. Its completion in the coming 5 years not only covers the domestic electricity supply, but also earns the country huge lump sum as a result of export to neighboring countries.

12. Rapid Economic Growth

Since the declaration of the free market policy about 20 years ago, Ethiopia has undergone profound changes in many respects. Therefore most of the businesses operating in Ethiopia are in the first generation. The state plays dominant role in shaping macro economic activities and policy makings which have resulted in fast economic growth applauded by international economic organizations like the World Bank and the international monetary fund.

Contact us

  • Visit us
    Gollagul Tower, Room #1101
    Area: 22 Mazoria
    Addis Ababa, POBox 2222
    (+251) 937646410
    (+251) 118237181
  • Write to us
    This email address is being protected from spambots. You need JavaScript enabled to view it.  

Recent Tweets

Twitter response: "Could not authenticate you."