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Ethiopia Allows Foreign Investors in Trade

In March 2024, the Ethiopian Investment Board issued a new directive allowing foreign investors to directly enter previously restricted sectors including export, import, wholesale, and retail trade. This is part of the Ethiopian government’s a phased approach to balancing foreign investment with continued support for local enterprises. 

Before this new directive, Ethiopia’s laws effectively restricted foreign entities from exporting key commodities like raw coffee and oilseeds, while also prohibiting them from importing fertilizers, petroleum products, and other essential items. As a result, foreign companies were compelled to seek local partners to conduct business.

Specific products have the following stipulations:

  • Raw coffee exports: Must have procured at least $10 million annually from Ethiopia for the past three years and agree to export at least $10 million within the permit year.

  • Oilseed exports: Must have purchased at least $5 million annually for the last three years and agree to export $5 million within the permit year.

  • Hides, skins, forest products, and poultry exports: The annual procurement must be at least $500,000 for the past three years, with a commitment to export $500,000 of each commodity within the permit year.

  • No prior experience or commitment is required for foreign investors wishing to export livestock.

  • For investors without prior procurement history from Ethiopia, a purchase order contract must be presented of $12.5 million for raw coffee, $7.5 million for oilseeds, $750,000 for hides, skins, forest products, and poultry, and at least $500,000 for other products listed in the directive. 

Foreign investors wishing to engage in import activities must demonstrate relevant experience, substantial capacity, or a well-established market linkage within their chosen import sector, along with meeting an annual import value of $10 million. 

Investors interested in these businesses must fulfill requirements such as meeting minimum capital thresholds, achieving the necessary competency standards, establishing contractual agreements, and developing appropriate marketing and logistics infrastructure.

U.S. companies can now enter Ethiopia’s trade sectors but must meet key investment and experience requirements

For more details, please contact: Yemesrach Kassu at Yemesrach.Kassu@trade.gov