With a stable and democratic government, improving infrastructure and one of the fastest growing economies in the world, Ethiopia is becoming a prime investment destination.
Strategically located at cross-roads between Africa, the Middle East and Asia, Ethiopia is the second most populous country in Africa and offers untapped resources, a vast domestic market and a large, young workforce. The country is also ideal for agricultural activity, with varied climatic conditions and abundant fertile land.
Recent government reforms and incentives are unlocking investment and business opportunities. Some of the top investment opportunities are in export-oriented sectors. These include textiles and garments, leather and leather products, cut flowers, fruits and vegetables, and agro-processing. The ambitious targets of the national Growth and Transformation Plan II – which culminate in Ethiopia achieving middle-income status by 2025 – are driving the country’s growth and openness to foreign investment.
Through its Programme for Country Partnership for Ethiopia, UNIDO is supporting the Government achieve its development objectives. This includes working with development partners ─ including multilateral development banks and the private sector ─ to promote investment in key sectors. UNIDO facilitates investment through feasibility studies, investment profiles and green field investment projects for presentation to international and local investors. In October 2016, UNIDO and the Government of Ethiopia co-organized the First International Agro-Industry Investment Forum in Addis Ababa to showcase investment opportunities in the country’s key sectors.
The website of Ethiopia's investment promotion agency, the Ethiopian Investment Commission, provides more information on opportunities; incentives, taxation and other procedures; and includes various downloadable resources.
National investment promotion agency: http://www.investethiopia.gov.et/
• Ethiopia is the oldest independent country in Africa, and among the most stable countries in the region. The 2012 peaceful transition of power to a new Prime Minister has proven the stability of Ethiopia’s multi-party political system and parliamentary form of government.
• Security in Ethiopia has been ranked 55th out of 148 countries by the World Economic Forum, well above most of its regional peers.
• The International Monetary Fund ranks Ethiopia as among the five fastest growing economies in the world.
• In 2013/14, Ethiopia’s economy grew by 10.3 per cent, making the country one of Africa’s top performing economies. Steady growth is expected to continue throughout 2015 and 2016.
• Inflation has been contained to single digits since 2013.
• A diverse topography and an excellent climate for the production of some of the most sought after food crops (cereals, pulses and oil seeds), a wide range of fruits and vegetables, coffee, tobacco, sugar cane, tea and spices, among others.
• Ethiopia is the world’s 6th largest producer of coffee, and the 3rd largest producer of Arabica beans in the world. Ethiopia also became the 4th largest non-EU exporter to the EU cut-flower market and the 2nd largest flower exporter from Africa.
• Private property is protected by the Constitution and the investment law.
• Foreign investors have the right to make remittances out of Ethiopia in convertible foreign currency, at the prevailing rate of exchange.
• Ethiopia is a member of the Multilateral Investment Guarantee Agency and the World Intellectual Property Organization.
• Ethiopia has concluded 30 bilateral investment promotion and protection agreements, of which 11 are with individual EU Member States. Significant other partners include China, India, South Africa, and Russia, and a number of regional economic partners.
• The country ranks 44 out of 189 economies for ease of enforcing commercial contracts on the World Bank’s Doing Business report (2014), placing Ethiopia within OECD levels.
• Ethiopia’s labour law, which regulates worker-employer relations, is in line with international conventions.
• With over 43 million workers, Ethiopia has the second largest labour force in Africa.
• Ethiopia’s minimum wage is among the lowest in Africa, with only five countries - Burundi, Uganda, Egypt, Gambia and Malawi - having lower minimum wages (International Labor Organization, 2010/11).
• Generally, private sector monthly salaries for university graduates range from USD 150 to USD 200, while construction sector monthly wages range from USD 60 for daily laborers to USD 300 for a foreman (Source: Ethiopia’s Ministry of Urban Development and Construction).
• With a population of almost 85 million people, Ethiopia is the second largest market in Africa, and is also part of the Common Market for Eastern and Southern Africa.
• Addis Ababa is home to key international organizations such as the African Union and the United Nations Economic Commission for Africa.
• Addis Ababa is also an air hub for Africa and the home of Ethiopian Airlines.
• Ethiopian products have duty-free, quota-free access to the U.S. and EU markets under the African Growth and Opportunities Act and the Everything But Arms initiative, respectively.
• Power production has increased steadily over the last ten years, with 99 per cent sourced from clean energy in the form of hydropower. Ethiopia has the second largest hydropower potential in Africa (Deloitte, 2014), and the country’s installed electricity generating capacity is expected to reach 10,000 MW by mid-2015.
• Ethio Telecom is currently engaged in a major transformation work of Next Generation Network (NGN) projects to create a world class telecom service provider.
• National access to potable water is expected to reach 98.5% by 2015 thanks to a number of projects underway.
• A 5,000 km-long railway network is currently under construction. While the first priority is to join Addis Ababa to Djibouti’s main port, the network is expected to reach every corner of the country.
Ethiopia offers a comprehensive set of incentives, particularly for priority sectors, such as:
Customs duty payment exemption on capital goods and construction materials, and on spare parts whose value is not greater than 15% of the imported capital goods’ total value;
Income tax exemption from two to seven years for manufacturing or agroprocessing and agricultural investments;
Carry forward of losses for half of the tax holiday period;
Several export incentives, including the Duty Draw-Back, Voucher, Bonded Factory and Manufacturing Warehouse, and Export Credit Guarantee schemes.
In addition, the government guarantees the remittance of profit, dividends, principals and interest payments on external loans, and the provision of land at competitive lease prices.