Etiòpia: Invertir a Etiòpia
According to UNCTAD's World Investment Report 2023, FDI inflows to Ethiopia decreased to USD 3.6 billion in 2021, down from USD 4.2 billion the previous year. However, the total stock of FDI remained substantial at USD 35.2 billion, representing around 29.3% of the country’s GDP. Foreign investment primarily targets sectors such as oil refining, mining, real estate, manufacturing, and renewable energy. Ethiopia has also capitalized on challenges faced by Bangladesh's textile sector to attract foreign textile companies. China stands out as a significant investor, accounting for 60% of new FDI projects approved, with substantial investments in manufacturing and services. Other major investing countries include Saudi Arabia and Turkey. Despite challenges such as the conflict in the Tigray region and political instability, Ethiopia attracted USD 3.4 billion in FDI in the fiscal year 2022/23. Notable investments include Safaricom's pledge to invest USD 300 million annually for ten years and the United Kingdom's Marriott Drilling Group securing financing for the construction of two geothermal power stations in Tulu Moye and Hawassa, which will be the country's first.
Several constraints hinder foreign investment in Ethiopia, including high state interference in the economy, poor infrastructure, challenges related to land acquisition, strict foreign exchange controls, high transaction costs, and institutional weaknesses. The lack of an independent judiciary undermines the rule of law and long-term economic development prospects. Moreover, the Ethiopian government maintains full control over the services sector. Progress has been made in improving transport infrastructure and electricity production to enhance Ethiopia's attractiveness. However, the non-convertibility of the Ethiopian birr restricts foreign exchange availability, impeding companies’ ability to repatriate profits and obtain investment inputs. The impending privatization of state-owned sectors and the creation of special economic zones are expected to boost private investment. To enhance the business climate, the government recently approved a new foreign investment law and issued new investment incentives regulations in 2022. Foreign and domestic private entities have the right to establish, acquire, own, and divest most types of business enterprises. While private land ownership is not permitted, land can be leased for up to 99 years. Foreign investors seeking to acquire existing private enterprises or shares must obtain prior approval from the Ethiopian Investment Commission (EIC). Despite challenges, Ethiopia benefits from abundant and low-cost trainable labor and strategic access to lucrative markets in the Middle East and Europe, though it depends on Djibouti for access to the Red Sea and Suez Canal. Ethiopia ranks 125th among 132 economies on the Global Innovation Index 2023 and 156th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 2,381 | 4,259 | 3,670 |
FDI Stock (million USD) | 27,351 | 31,611 | 35,281 |
Number of Greenfield Investments* | 11 | 7 | 6 |
Value of Greenfield Investments (million USD) | 530 | 137 | 558 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Ethiopia | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 3.0 | 5.5 | 7.0 | 5.0 |
Index of Shareholders’ Power*** | 2.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Among the reasons to invest in the country there are:
Ethiopia's weak points in terms of FDI attractiveness are:
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Actualitzacions: April 2024