Ethiopia attracted $4 billion in foreign direct investment in the 2024/25 fiscal year, a 2.2% increase from the previous year, signalling growing investor confidence in the country’s economic reforms, the Ethiopian Investment Commission (EIC) reported.

The flow of capital reflects the government’s push to build a private sector-led, export-oriented economy. During the period, 544 investment permits were issued, including 308 to foreign investors, 109 joint ventures, and 98 domestic companies, targeting priority sectors such as manufacturing, agriculture, ICT, and import-export trade. The liberalization of the trade sector prompted 61 new foreign licenses.

Ethiopia also upgraded 14 industrial parks to Special Economic Zones, offering competitive incentives and flexible frameworks for exporters. Investments within these zones generated $123 million in export revenue, while projects outside the zones contributed $543 million.

Domestic production displaced over $1 billion of imports, easing pressure on the balance of payments and strengthening local industrial capacity.

The “Invest in Ethiopia” forum held in May drew more than 700 investors from 42 countries, yielding commitments worth $1.6 billion. Investors who signed memoranda of understanding are now progressing to formal permits.

EIC’s digitisation of registration, licensing, and post-investment services has improved transparency and efficiency, while new directives and regulations have streamlined licensing and strengthened investor protection. Public-private dialogues addressed customs, taxation, and regulatory predictability, highlighting a collaborative approach to reform.

The EIC said its achievements demonstrate Ethiopia’s commitment to creating a competitive, investor-friendly environment that balances foreign investment with domestic growth.