Ethiopia pulled in $4 billion in foreign direct investment in the 2024/25 fiscal year, marking a significant turnaround for the Horn of Africa nation as structural reforms and industrial upgrades begin to win over global capital.
The Ethiopian Investment Commission (EIC) said the surge was underpinned by a record 544 investment permits issued, including 308 for foreign ventures and 109 for joint partnerships. The spike in activity highlights growing investor appetite across newly liberalized sectors, including manufacturing, agriculture, ICT, and the import-export trade, which opened to foreign players for the first time and attracted 61 new entries.
A key pillar of the year’s performance was Ethiopia’s industrial infrastructure push. Fourteen industrial parks; ten publicly owned and four private were converted into Special Economic Zones, offering more flexible investment terms and globally benchmarked incentives. These zones alone accounted for $123 million in export earnings, while ventures outside the designated areas generated $543 million.
Efforts to boost domestic manufacturing also paid off, with local production substituting more than $1 billion worth of imports, giving a lift to Ethiopia’s strained trade balance and easing pressure on foreign currency reserves.
The government’s investment diplomacy is also bearing fruit. The “Invest in Ethiopia” forum, held in May and attended by more than 700 investors from 42 countries, brought in $1.6 billion in additional commitments. Many of the deals signed at the event have already progressed to permit issuance, the EIC confirmed.
In a bid to streamline investor services, the EIC has fully digitized its registration, licensing, and post-investment support systems. It also ushered in three legal reforms this fiscal year, targeting licensing simplification, stronger investor protections, and alignment with international standards. Regulatory clarity around customs, taxation, and legal predictability was another focus, addressed through a series of public-private consultations.
“These results are not just numbers; they reflect Ethiopia’s strategic shift toward becoming a more competitive and investment-ready economy,” the commission said in a statement.