Commercial Opportunities

Market Opportunities

Ethiopia is endowed with abundant agricultural resources and has diverse ecological zones providing large opportunities for agricultural production and agro-processing engagement. Under the Ministry of Agriculture (MOA), the Agricultural Investment Land Administration Agency handles the management of the overall agricultural investment, land administration and transferring process.
The GOE is hugely investing in mega social and economic infrastructure projects including power generation projects, industrial zones and parks, housing construction, water system and irrigation projects, roads and railways, airports and dry ports, telecommunication infrastructure, and sugar and fertilizer factories. There are many attractive business opportunities for U.S. companies to participate in government tenders for mega projects. Tender proposals accompanied by financing options are highly welcomed by the government when engaging in a bid for mega projects, and those bidders who do not include 100% financing options are at a competitive disadvantage. With U.S. EXIM Bank currently seriously considering to approve Ethiopia for long term financing, there are new opportunities for U.S. companies for involvement in Ethiopia s large infrastructure projects.
Energy is one of the most significant sectors for Ethiopia’s economic growth and development. Ethiopia possesses a bounty of renewable energy potential, especially hydroelectric, and seeks to exploit these resources by increasing installed capacity of renewable energy sources from around 2,100mw to over 25,000mw. Wind, geothermal, and solar power are major areas for investment opportunities. Power Africa USAID and USTDA have technical advisors actively working to improve the tender procurement process for power projects and facilitating capacity building to fast-track the initiation and implementation of power projects. USTDA is also actively working to spear-head clean technology in Africa.
The GOE seeks to attract investors through incentives for priority export sectors – textiles/garments, leather, horticulture/floriculture and agro-processing.
The GOE actively seeks foreign direct investment in local manufacturing as a means of import substitution and eventual reduction of its trade deficit, as a national development priority.
Leading non-agricultural sectors for U.S. trade and investment include: renewable energy, information technology and communications (ICT), construction, healthcare, tourism and aviation.
Main U.S. exports to Ethiopia include: aircraft, trucks/vehicles, vehicle and machinery car parts, medical equipment, and construction and agricultural equipment.
The GOE has developed a list of approximately 200 eServices or electronic services needed to be developed in the next several years.
Nearly all tenders issued by the Ethiopian government’s Privatization and Public Enterprises Supervising Agency (PPESA) are open to foreign participation. Most of the 280 public enterprises sold since 1994 have been small enterprises in the trade and service sectors. There are several examples of large privatized enterprises such as four breweries, which were acquired by foreign enterprises including Heineken (Holland) and Diageo (UK).
Although it is commonly known that globally small and medium enterprises ( SMEs) are the driving force of economic growth and expansion especially in the service sector, this is not necessarily the best market for them here in Ethiopia due to limited access to finance and marketing promotion challenges to facilitate buyer support to processed LOCs due to the shortage of forex. As SMEs would need to finance their exports, they would have the challenges of carrying the costs until their buyers could access forex to pay for purchases. This could pose a significant burden for the SMEs to manage cash flow. Also, SMEs would not typically have the legal and administrative support resources or capital to sustain the long and often bureaucratic process of processing goods and services through the Ethiopian custom systems. A good local partner and logistics operator familiar with the business licensing, importing and customs services in Ethiopia could make business more achievable for SMEs interested in doing business in Ethiopia. Even large U.S. companies with a strong presence in Ethiopia struggle with managing the forex shortage and payment.