Ethiopia is one of the most attractive countries for investment. Its vast natural resources and young workforce, favorable investment environment, and infrastructure facilities are among the factors that make it favorable for the investment sector.
Its rapidly growing population and its strategic location for Africa and the Middle East also make it more favorable for the investment sector. The fact that the country has been working diligently to create a favorable environment for investment in recent years is another factor that makes it favorable.
It has only undergone reforms in the past few years, including the amendment of the Investment Proclamation. The recently implemented macroeconomic reforms have also created favorable conditions for the sector. A system has been set up to allow foreign banks to enter the country and operate; retail and wholesale trade activities that were previously closed to foreign investors have been opened.
Taking advantage of the favorable conditions created in the sector, domestic and foreign investors are investing in the sector. Following this, changes are being recorded in various sectors.
As indicated by data, the investment sector is one of the sectors that have been mentioned as having seen the results of the reforms carried out in the country. Investment has been showing significant improvement since 2022/23. For example, in 2023/24, the investment sector accounted for 20% of the total GDP, and in 2024/25, this figure increased to 23%.
Recently, during the review of the 100-day performance of the third quarter of the 2024/25 fiscal year and the nine-month performance of the comprehensive macroeconomic implementation in the presence of Prime Minister Abiy Ahmed PhD), the Minister of Planning and Development, Fitsum Assefa (PhD), highlighted the changes seen in the investment sector.
The Minister, in particular, indicated that foreign direct investment is a major indicator of macroeconomic performance, and stated that in the first eight months of the 2024/25 fiscal year; nearly USD 2.5 billion in foreign direct investment was attracted.
According to her, 363 investment licenses were issued in various sectors in the first eight months; these include 10 in agriculture, 207 in manufacturing, and 146 in the service sector.
As she explained, this performance is expressed in terms of ownership; 143 foreign investors were granted licenses; and 44 investors were granted licenses in combination. 33 new investment licenses were also issued.
She further said that there are investments that have shifted to manufacturing and service provision; although the office planned to put 161 investments into operation at the planning stage, 141 are currently in operation.
Ethiopia, as in previous years, is still working to ensure that the investment sector meets its expectations. The Ethiopian Investment Commission continues to work to attract investors through events such as Invest in Ethiopia, foreign visits, etc.
This Invest Ethiopia High-Level Business Forum has been held twice in the past years. This year, it will be held for the third time in May.
As the Ethiopian Investment Commission, the Ministry of Finance and development partners recently announced in a joint statement regarding the forum; it is highly organized, connecting investors, the business community, policymakers, and entrepreneurs from all over the world, and showcasing Ethiopia’s investment potential. It is working to make Ethiopia the next investment hub by utilizing viable options for the sector.
Commissioner of Investment Commission, Zeleke Temesgen (PhD), said that the efforts to make the country an investment hub for the future are coming to fruition and that many international investors are making the country their choice and submitting investment proposals. He also said that the economic recovery is promising.
He said that the country meets the investment criteria that a country should have. It is ready to welcome its guests by completing its work to make it a preferred and attractive country for investors.
The Commissioner further stated that the forum will showcase Ethiopia’s natural resources and its investment readiness to the foreign world. Foreign and domestic investors, business leaders, policymakers and consultants, as well as development organizations, will be able to explore Ethiopia’s potential investment opportunities.
He also recalled that the second high-level business forum held in 2023 brought many good opportunities. It was a place where Ethiopia was introduced and the country’s commitment to investment was demonstrated in practice.
He mentioned that the strong connection between nature and investment was demonstrated by promoting the country’s favorable environment, and explained that more than 750 international and local investors, business community leaders, as well as policymakers and consultants, senior government officials and partner development organizations participated.
The Commissioner mentioned that the second round of the Business Forum generated more than 1.6 billion US Dollars in investment, and said that this is a good development for the country.
The State Minister of Finance, Semerita Sewasew announced that just like in athletics, efforts are being made to promote the country in the field of investment and in the economy in general, and to generate additional income. She stated that the government has been working to expand the investment environment, improve policy and legal frameworks, and modernize procedures to stimulate the investment sector.
There are investment projects that have been approved and are being approved by Parliament, and that there are projects underway in education, health, mining, energy and other sectors. She said that by organizing this favorable situation, they are working with partner organizations and international institutions to bring about a change in investment.
Mentioning THAT there is always change if there is hard work, Semerita said that the government-led plans play a crucial role in the investment sector. She also pointed out that her Ministry is working with the Investment Commission, an institutions responsible to work for a better Ethiopia with better morale.
The third Invest Ethiopia High-Level Business Forum will be held on May 12 and 13, 2025 at the Skylight Hotel.
The third business forum could put Ethiopia on a higher level than the previous two forums; for this, the Ethiopian Investment Commission, the Ministry of Finance and partner development organizations are working together. It was also indicated that this partnership aims to make Ethiopia a leading investment destination in Africa.
The information released about the forum indicated that various goals were set, but the main goals were to attract new investors, demonstrate the high attention given by the government to the sector, and announce new investment policy reforms.
It was also indicated that discussions will be held for two days to increase investor participation, enable decision-makers in investment and policy-making, and to review the achievements of the sectors.
It was noted that Ethiopia is focusing on manufacturing, agriculture, energy, ICT, health, transport and logistics, tourism and other sectors, and it is believed that the platform will be useful in bringing foreign investors closer to local entrepreneurs and government bodies. It was also said that it will allow investors to see recent changes in the investment sector in Ethiopia and create conditions for them to work in partnership with their Ethiopian counterparts.
This year’s third forum is expected to attract over 700 new and existing investors, policymakers, development partners, and prominent business leaders; and is expected to attract over three billion Dollars in investments in the coming years.
The forum follows Ethiopia’s full macroeconomic implementation, including the liberalization of the financial sector, especially foreign exchange transactions, and the opening of key economic sectors to foreign investors. This reflects the Ethiopian government’s efforts to address the challenges facing the investment sector and to promote investment opportunities to local and foreign investors as part of its efforts to transform the economy.
Commissioner Zeleke told the Ethiopian News Agency that Ethiopia has undergone many changes in the past seven years, especially in the investment sector, and has made strong efforts to open up closed opportunities to foreign investors.
He noted that the steps taken to amend the investment law have opened up sectors that were previously restricted to foreign investors, and announced that the Ethiopian Investment Board has allowed foreign companies to engage in wholesale and retail, as well as import and export trade. Following this, investment licenses have been granted to 40 foreign investors and 66 more are in the process.
He also stated that since the inauguration of the Dire Dawa Free Trade Zone by Prime Minister Abiy Ahmed (PhD), the Investment Commission has been encouraging investors to enter the zone. As a result, about eleven investors have entered and some are bringing goods.
He noted, “Holding continental and international investment forums such as Invest in Ethiopia (High Business Forum) is a way to promote our country to the rest of the world.”
BY BACHA ZEWDIE
THE ETHIOPIAN HERALD WEDNESDAY 7 MAY 2025
