In Ethiopia, the Government of Ethiopia (GOE) and its public institutions are the foremost buyers of foreign goods and services. This is due to the Ethiopian economy being largely dominated by large public investments in infrastructure and the State-Owned Enterprises (SOEs) being very active in many areas of business. Public Procurement and Property Disposal Service (PPPDS) carries out procurement from the international market for public institutions. Government procurement is conducted by a competitive bidding process and authorization of the bidding company is required to be eligible for participation. 

The Ethiopian government often finances public works projects through borrowing from Multilateral Development Banks, such as the World Bank.  

There are two types of government tenders, national and international. National tenders are restricted to local companies’ participation, while international tenders are open for all including foreign companies. U.S. companies that do not have a local office in the country should have a local agent to successfully bid on international tenders. Local agents have on occasion represented competing foreign companies resulting in inadequate support to U.S. companies in international tenders. It is advisable for U.S. companies to carefully select their local partners based on a thorough due diligence investigation. The U.S. Foreign Commercial Service office in Addis Ababa can provide support in helping U.S. companies select a local partner. 

Bureaucratic procedures, delays in the decision-making processes and repeated cancelation of tenders often impede participation in tenders and expose bidding companies to unnecessary costs and delays. In tenders involving large infrastructure projects, bidders presenting attractive financing options enjoy a strong preference. 

Though the GOE plans to privatize a number of public companies, certain sectors will remain dominated by SOE market leaders. These areas include energy (a partial monopoly), fabrication and heavy engineering, defense contracting. Businesses operating in these sectors may be required (either by law, or by market realities) to partner with these entities. 

The GOE established a consumer goods trading company called ALLE, with the aim of containing consumer inflation and controlling the monopolistic effect of a few dominant private importers on consumer goods prices. The company has more than 3,000 registered retailers and plans to increase its annual turnover to more than $300 million by 2021. 

When negotiating with Ethiopian SOEs or government entities, U.S. companies are recommended to identify linkages between their products and long-term GOE targets under the strategic national plan. The Ethiopian government may also be receptive to products or services that mitigate the scarcity of foreign exchange, either by supporting exports or meeting a demand that would otherwise be met through imports. 

Ethiopia is not a member of the World Trade Organization (WTO) and is not a party to a free trade agreement (FTA) with the United States, which contains commitments on government procurement. In June 2018, Under Secretary of Commerce for International Trade Gil Kaplan led a visit to Ethiopia by members of the President’s Advisory Council on Doing Business in Africa (PAC-DBIA), a private sector group advising the United States government on enhancing the U.S. commercial presence on the continent. During the visit, the Under Secretary signed a memorandum of Understanding (MOU) with the Ethiopian Government to broaden U.S. participation in Ethiopian priority projects, including infrastructure projects. 

U.S. companies bidding on tenders may also qualify for U.S. government Advocacy. The Advocacy Center, a unit of the Commerce Department’s International Trade Administration, coordinates U.S. government efforts to assist U.S. exporters bidding on public sector contracts with foreign governments. Consult Advocacy for Foreign Government Contracts for additional information. 

Multilateral Development Banks and Financing Government Sales. Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.  

Financing of Projects 

Access to finance is a challenge for the Ethiopian local market. Local private banks often require a large percentage of loans as collateral, which must usually consist of cash, real estate or durable capital physically located in Ethiopia. The National Bank of Ethiopia must approve loans from overseas institutions that require hard currency debt repayments.  

The World Bank’s International Finance Corporation provides some equity financing for private sector projects. African Development Bank also provides financing for some projects that are involved in production for export. African Development Bank is working with Power Africa on energy generation, transmission, and distribution projects. They also finance transportation and other infrastructure projects. Other European and Asian Development Finance Institutions are collaborating on the financing of infrastructure projects. 

In 2016, the U.S. Export Import Bank (EXIM) Board of Directors approved Ethiopia for long term financing. EXIM Bank financing of long term projects could create significant business opportunities for U.S. companies’ engagement in Ethiopia, particularly in upcoming mega infrastructural projects. The Development Finance Corporation (DFC), the successor agency to the Overseas Private Investment Corporation (OPIC), with expanded capacity to support investment in developing countries,  has shown focused interest in Ethiopia to finance projects. Equity financing, flexibility with respect to a U.S. nexus, and a doubling of its total lending cap to $60 billion are among the leading changes of the authorities of the DFC. 

In December 2018, Millennium Challenge Corporation (MCC) also approved Ethiopia for a threshold program pending final board approval.  

As a part of the Government of Ethiopia initiative to develop the manufacturing sector and export oriented investments, the Development Bank of Ethiopia (DBE) commits to financing 70% of the required capital for projects in selected sectors including commercial farms, agro-processing, export oriented businesses and the manufacturing sector, with the remaining 30% covered by owner’s equity. 

Resources  

Government 

• Ethiopian Investment Commission  

• Ministry of Revenue  

• Ethiopian Commodity Exchange  

• Ethiopian Airlines  

Banking and Finance  

• Awash International Bank  

• Amhara Bank 

• Bank of Abyssinia  

• Berhan International Bank  

• Bunna International Bank  

• Commercial Bank of Ethiopia  

• Construction and Business Bank  

• Cooperative Bank of Oromia  

• Dashen Bank at  

• Development Bank of Ethiopia  

• Debub Global Bank  

• Enat Bankat  

• Anbessa International Bank  

• Nib International Bank  

• Oromia International Bank at Email: oib@ethionet.et  

• United Bank at  

• Wegagen Bank  

• Zemen Bank  

Hotels and Meeting Facilities 

• Ghion Hotel  

• Harmony Hotel at http://www.harmonyhotelethiopia.com 

• Hilton Addis Ababa at http://www.hilton.com  

• Hyatt Regency Addis Ababa 

• Jupiter Hotel  

• Marriott Executives Apartment  

• Radisson Blu 

• Ramada Hotel  

• Sheraton Addis Ababa  

 

Tour Operators 

• Abyssinian Tours  

• Ethiopia Travel  

• Ethiopian Rift Valley Safaris  

• Experience Ethiopia Travel  

• GETTS Travel  

• Travel Ethiopia  

 

Other Resources  

• Association of Ethiopian Microfinance Institutions  

• Ethiopian Bar Association  

• Ethiopian Business Development Services Network  

• Ethiopian Economics Association  

• Ethiopian Medical Association  

• Ethiopian Information Technology Professional Association  

• Ethio-Jobs  

• Precise Consult International  

• Construction Contractors Association of Ethiopia  

• Ethiopian Information Technology Professionals Association  

• Ethiopian Horticulture Producer Exporters Association  

• Ethiopian Leather Industries Association  

• Ernst & Young  

• HST Consulting  

• Deloitte  

• Grant Thornton 

Email: ron.stott@gtethiopia.com 

 

 

U.S. government websites: https://www.trade.gov/ethiopia