After the announcement of a new directive allowing foreign investors to engage in wholesale and retail business in Ethiopia, 71 international companies have expressed interest, and 20 licenses have been issued since July.
It is worth recalling that two months ago, the Ethiopian Investment Board, chaired by the Prime Minister, decided to open up sectors previously reserved for Ethiopians to foreign businesses.
Since the Ethiopian Investment Commission began issuing licenses under this new law, 21 organizations have been licensed: 13 to engage in retail business and eight for export activities.
On September 23, 2017, a discussion was held at Mesfen Tafesena and Associates Law Office regarding Ethiopia’s investment landscape. The meeting was attended by key stakeholders, including the Minister of Finance, Dr. Eyob Tekalign, and Dr. Brook Taye, CEO of the Ethiopian Investment Holding Group.
The senior policy and legal advisor from the Investment Commission stated that many companies granted licenses are from emerging markets. While the advisor did not disclose company names, it was noted that most businesses registered for export are focused on coffee and sesame. Additionally, companies planning to import into Ethiopia have shown interest in sectors like electric vehicles and construction materials.
Previously, foreign investment in Ethiopia was heavily restricted, but a significant revision to the investment proclamation in 2020 has transformed the landscape. Since the new law took effect, over 150 investment projects have been launched, with companies registering more than $2.5 billion in investments. In the five years from 2018 to 2023, 85 reform laws have been introduced across 100 agendas aimed at improving the business environment.
Dr. Eyob Tekalign, the Minister of Finance, highlighted that in the past two months, efforts to manage the foreign exchange market have increased export revenue, significantly boosted remittance income, and reduced imports.
Regarding the recent 10-day training for senior leaders of the Prosperity Party in Adama, the Minister clarified that the discussions were not centered on political issues. Instead, the focus was on leadership and service to the nation.
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This is a wise move. It will intensify competition promoting price stabilization of commodities including the basic needs like groceries.
This will make Ethiopia look like Kenya and Uganda. Foreigners specially Indians and Chinese will take over and the local traders/investors will suffer highly. Regadless, this is inevitable and would have happened sooner or later.