Ethiopia

Addis Ababa metro line and cityscape

Foreign Investment Overview

  • FDI inflow, 2017: USD 3.6B
  • Foreign investment into Ethiopia has been high in recent years and has been steadily increasing over the past five years.
  • Ethiopia received over three times the amount of FDI inflow than the next highest country in the region (Sudan) in 2016.

FDI inflow to Ethiopia

Investment Attractiveness

  • Ethiopia’s economy experienced strong, broad-based growth averaging 11% a year from 2006 to 2016, compared to a regional average of 5%.
  • Ethiopia’s government is interested in boosting public infrastructure and transforming the country into a manufacturing hub and developing Addis Ababa as a regional hub for transport and business services for neighboring countries.
  • As a neighboring country within the Horn of Africa, Ethiopia has an incentive to support transition states to reduce potentially negative regional spill over.
  • Neighboring countries can benefit through investment in Ethiopia. For example, large-scale infrastructure development projects in Ethiopia, particularly in transport and energy, often include neighboring countries. In addition, developing the manufacturing sector in Ethiopia can develop the skills and services necessary to expand into the region.
  • Now that Ethiopia and Eritrea have eased their strained relations, the landlocked country for the first time in 20 years has access to Eritrea’s Red Sea ports. Direct flights resumed between the two nations in July 2018.

South Korean Alignment

  • Construction and manufacturing lead the contribution to total GDP in the industrial sector at 16% and 4%, respectively. Ethiopia’s development priorities align to South Korean expertise and prior African experience. Recent public infrastructure investment in transport, energy, water and sanitation has benefited construction, while investments in industrial parks have contributed to steady manufacturing growth.

Contact us to learn more about investing in the Horn of Africa.

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