About Ethiopia

About Ethiopia (4)

Saturday, 07 June 2014 20:52

Why Ethiopia

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  • Fastest growing economy in the world with annual GDP of 11%.
  • Large amount of irrigable land.
  • Enormous quantity of water and mineral deposits.
  • Highly developing infrastructure and logistics.
  • Pro investment government;
  • Politically stable and secure;
  • Macro-economic stability;
  • Regional and international market opportunities;
  • Competitive investment incentive packages;
  • Investment guarantees and protection;
  • Exceptional climate; and
  • Competent and trainable cost efficient labor by African standard.
Wednesday, 25 February 2015 09:57

Economic Environment

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• Comprehensive development strategy resulting in strong economic growth.

• Stable macro-economic condition.

• Double digit economic growth averaging 11% per annum in the past 7 years.

• Generally, inflation managed at a single digit figure.

• Stable exchange rate.

• Government commitment to private sector.

• Safe and secure working and living environment, identified by the UN and the International Chamber of Commerce (ICC) as a key asset for investors in Ethiopia.

• Low level of corruption – Ethiopia is described by the UN and ICC as “exceptional in its almost complete absence of routine corruption”.


• Major economic sectors are open for investment and marketing.

• Remittance out of Ethiopia from invested capital (dividends and interest) is permitted.

• Remittance also permitted for principal and interest with technology transfer, proceeds from sales or liquidation of an enterprise, salaries and other payments.

• The investment code provides a conducive environment for private sector development.

• 100% foreign ownership of investment is permitted with the following minimum initial investment:

  • US$100,000 – sole foreign investment
  • US$60,000 – where the foreign investor is in a joint venture with a domestic partner
  • US$50,000 – for consultancy or publishing businesses. This figure reduces to US$25,000 for foreign investors working in partnership with a domestic investor in the areas of engineering, accountancy, architecture, auditing services or business/management consultancy.

• An investor reinvesting profits or dividends or exporting of at least 75% of outputs is not required to allocate a minimum capital.

• Substantial market liberalisation.

Wednesday, 25 February 2015 09:54

Labour Market

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• Ethiopia has a young, trainable and disciplined labour force.

• Private universities and colleges flourishing in Addis Ababa and regional cities.

• Over 30,000 university graduates per year, including business, management, economics, accounting, law and engineering graduates.

• Ample opportunity to meet the demand of skilled manpower in the technical and vocational field due to the expansion of Technical and Vocational Education and Training (TVET) college.

• Average private sector wage £30 per month, with graduate salaries at between £43 and £55 per month.

• Expatriate employees 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 their replacement within a designated time period.

• Good standards of spoken and written English.



• Strong internal market with a population of 80 million which is the second largest in Sub-Saharan Africa.

• The large and fast-growing domestic market offers good prospects for investment in and the

development of consumer good industries such as food, beverages, tobacco, plastic products, soap and detergents, glass and ceramics, chemical and chemical products, drugs and pharmaceuticals, paper and paper products as well as electrical and electronic products.

• Located in the ‘Horn of Africa’ at the crossroads between Africa, the Middle East and Asia, Ethiopia offers a strategic market access.

• Membership of the Common Market for Eastern and Southern Africa (COMESA) embracing 23 countries with a population of more than 420 million. Ethiopia enjoys the benefits of preferential tariff rates on exports to these countries.

• Ethiopia is an ACP member (African, Caribbean and Pacific Group) and accession to the WTO is under negotiation.

• Ethiopia also enjoys Duty Free and Quota Free (DFQF) privilege extended by, among others, USA – Africa Growth and Opportunity ACT (AGOA), EU – Everything But Arms (EBA), China – ‘0 Tariff ’ privilege and India - DFQF.

• Investors engaged in the export sector of Ethiopia will have competitive edge in these markets.

Wednesday, 25 February 2015 09:48

Political Stability

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  • Ethiopia is considered as one of the most stable countries in Africa.
  • The Constitution of the country, adopted in 1995, provides for a multi-party political system.
  • Elections are held by universal suffrage every five years.
  • The FDRE has a parliamentarian form of government with a bicameral parliament which comprises the House of the Peoples’ Representatives (HPR) and the House of the Federation (HoF).
  • The House of the Peoples’ Representatives is the highest authority of the Federal Government.
  • Power of government is assumed by the political party or a coalition of political parties that constitutes a majority in the House of the Peoples’ Representatives (HPR).
  • Executive power is vested in the Prime Minister, elected from among the members of the HPR for a five-year term.
  • Ethiopia may well be considered as a country with the lowest levels of crime and corruption among least developed countries.

Data Source: Ethiopian Investment Guide 2014