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Ethiopia Unveils New Directive for Foreign Investors in Restricted Trade Sectors –

Addis Ababa, April 18, 2024(Addis Walta) The Ethiopian Investment Board has issued a new directive outlining that foreign investors can engage in specific trade investments.

The board has unveiled a new directive to regulate foreign Investors’ participation in previously reserved businesses including export, import, wholesale, and retail trade investments.

Ethiopian Investment Commission (EIC) Commissioner, Hanna Arayaselassie briefed today the details of the new directive that will create better competitiveness and increase quality in trade investment.

Accordingly, the objective of this directive is to list out investment areas in the export, import, wholesale, and retail trade sectors reserved for domestic investors in which foreign investors may participate, establish the conditions that apply, and indicate details of the facilitation and regulatory functions of the appropriate government bodies.

According to the directive, a policy of building a sustainable national economy that is anchored on domestic capabilities has been pursued to date, and to this tune, Investment Regulation No.474/2020 has shielded select trading sectors from foreign investment competition to facilitate a qualitative and quantitative growth of domestic investors.

More importantly, the regulation would shed light on domestic investors’ integration into the global trade value chain, and eventually their transition to value-added investments.

Understanding that a new approach must be pursued that reorders the existing national policy rationale of reserving the export, import, wholesale, and retail trade sectors to domestic investors, promotes the sectors’ gradual opening to willing and capable foreign investors, and engages in further liberalization measures based on a practical appraisal of the implementation process and valuation of the changes and benefits thus realized.

Regarding participation in export trade, any foreign Investor can engage in export trade investment of raw coffee, khat, oilseeds, pulses, hides and skins, forest products, poultry, and livestock bought on the market.

The directive also puts requirements on the export trade for those investors.

Thus, in the case of a foreign investor requesting to engage in the export trade of raw coffee, it must have been procuring from Ethiopia an average of at least 10 million US Dollars worth of raw coffee annually for the last three consecutive years and contractually agree to attain the export of at least 10 million US Dollars worth of the commodity within the permit year.

On import trade, except for fertilizer and petroleum import trade, any foreign Investor can engage in all import trade investments reserved for domestic investors under the regulation, it was indicated.

On the participation in wholesale trade investment, except for wholesale of fertilizer, any foreign company can engage in the wholesale trade investment of all sectors reserved for domestic investors.

Furthermore, under this directive, any foreign investor can engage in retail trade investment reserved for domestic investors under the regulation.

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