Accessing the Ethiopian market often requires the following: undertaking a judicious assessment of the market opportunities, conducting extensive due diligence, and developing personal relationships. U.S. firms should consider appointing experienced and reliable local agents or distributors to represent their products and services in Ethiopia. Ethiopian-Americans, living in the United States or in Ethiopia, often serve as good resources in establishing U.S.-Ethiopian partnerships. Hiring a local lawyer to review documents and contracts is essential for any investor.
The Government of Ethiopia (GOE) requires that all commodity imports be channeled through Ethiopian nationals registered as official import or distribution agents with Ethiopian Ministry of Trade and Regional Integration (MOTRI). There is no substitute for conducting meetings in person and spending time on the ground to build relationships and form business partnerships. Email communication should not be substituted for in-person meetings. That said, during the COVID pandemic, video meetings are becoming more acceptable as a form of communications leading up to in person deal closings.
A significant portion of Ethiopia’s imports are solicited through government tenders, primarily issued by the Public Procurement & Property Disposal Service (PPPDS) and, with respect to the Ministry of Health, the Ethiopian Pharmaceutical Supply Agency (EPSA). The tender announcements are made accessible to all interested potential bidders, regardless of the nationality of the supplier or origin of the products/services. Some U.S. companies have raised concerns regarding a lack of transparency in the PPPDS and EPSA tender bid evaluation processes.
The administration of PM Abiy Ahmed has undertaken significant actions against corruption, including detaining eight senior executives at PPPDS and the Public Procurement Authority (PPA) including the Director General for PPPDS and the Deputy Director General for PPA. All eight executives were charged with corruption and the PPPDS is currently undergoing a thorough reform process with a new Director General appointed.
Ethiopia has its own unique calendar year. The Ethiopian calendar has 13 months; 12 months with 30 days each and one month of 5 or 6 days depending on whether the year is a leap year or not. The Ethiopian calendar year begins on 11th September, which is the Ethiopian New Year. The government fiscal year starts on 8th July and ends on 7th July. Both the Ethiopian calendar and fiscal year fall in two Gregorian calendar years. This is important for U.S. companies organizing their visits to Ethiopia. Companies should avoid the Ethiopian New Year as many government officials, offices and key private sector companies are not available. Companies should be aware of the Ethiopian fiscal year when approaching the government to finance goods and services to ensure funding and an appropriate approval timeline.