Ethiopia’s Business Revival: Private Firms Step Out of the Shadows
By Aksah Italo
Published on 08/11/25
The towers of Addis Abeba rise stoically through the morning mist—gray cliffs of cement and limestone. They stand firm and cold, exhaling the scent of industry and ambition. Beneath them, Ethiopia’s private sector stirs quietly, yet forcefully, charting a course through the shifting economic landscape.
From modest beverage bottlers behind soot-streaked windows to towering manufacturing plants piercing the haze, private enterprises are carving out space in an economy once dominated by the public sector.
Amid ongoing economic reforms, Ethiopia remains paradoxically both austere and abundant—a place where opportunity and caution walk hand in hand.
Today, more than 700 registered private firms are contributing to job creation, capital formation, and investment. Among them, names like Midroc Investment Group, BGI Ethiopia Plc, Heineken Breweries S.C., East Africa Bottling S.C., Moha Soft Drinks Industry S.C., and Unilever Ethiopia dominate the landscape—ranked high in revenue, profit, tax contributions, and market share.
According to the Ministry of Revenue, the biggest private taxpayers in 2024 were BGI Ethiopia, Heineken Breweries, Dashen Brewery, Awash International Bank, Dangote Cement, and Moha—now forming the backbone of the country’s tax base.
BGI Ethiopia topped the list, paying 7.4 billion Br in taxes in 2024. A dominant force since the 1990s, it was Ethiopia’s second-largest brewer in 2021. Over the years, BGI expanded aggressively—launching the Hawassa Brewery in 2011, acquiring Raya Brewery in 2017 for $88 million, and purchasing Zebidar Brewery in 2019. Its acquisition of Meta Abo Brewery from British multinational Diageo further cemented its dominance, although Heineken Ethiopia has since taken the market lead.
The Dutch brewing giant Heineken entered Ethiopia 12 years ago, acquiring Harar and Bedele breweries and building a greenfield plant in Qilinto. Together, these facilities now produce 4.5 million hectoliters annually. In 2024/25, Heineken paid 14 billion Br in taxes—the highest single-year contribution from any private company.
This rise in private investment follows sweeping reforms that have redrawn the country’s economic playbook. The federal government liberalized the foreign exchange regime, introduced a flexible exchange rate, shifted toward interest rate-based monetary policy, and ended the central bank’s direct financing of government spending.
Following the reforms, Dangote Investment Group, one of Africa’s largest cement producers, announced plans to double its Ethiopian output to five million tons per year. It also expressed interest in investing in Ethiopia’s sugar and fertilizer industries.
These changes address years of macroeconomic instability driven by state-led development. Mamo Mihretu, Governor of the National Bank, noted that excessive public investment drove activity into the informal economy, fueling tax evasion and market distortions. By allowing the market to set exchange rates, he argues, the country can attract foreign currency, increase transparency, and encourage productive investment.
Perhaps the boldest reform came in trade. For the first time in decades, foreign investors are permitted to enter sectors once reserved for Ethiopian nationals—including import, export, wholesale, and retail.
Unilever was the first foreign firm to seize the opportunity. Previously limited to manufacturing in Ethiopia since 2014, the multinational is now licensed to import finished goods directly. Brands like Vaseline are now shipped from Unilever’s overseas factories and placed directly on Ethiopian shelves, bypassing third-party distributors.
Degsew Amanu, Unilever’s Head of Communications and Corporate Affairs, said that forex access and trade liberalization have “drastically improved” operational capacity. Under its new national manager, Nesibu Temesgen, Unilever Ethiopia plans to triple its sales to 200 million euros within four years.
Still, Degsew offers a note of caution. “The race is far from over,” he said. Tax audits remain inconsistent and unpredictable. Gaps between tax law and enforcement—especially in customs procedures—continue to frustrate the business environment.
Despite robust reforms, Ethiopia’s private investment levels remain modest by global standards—contributing just two percent of GDP, compared to significantly higher ratios in advanced economies. The latest United Nations (UN) report shows Ethiopia’s investment-to-GDP ratio fell from 35.3 percent in 2019 to just 20.5 percent in 2024. Credit disbursed to the private sector dropped from an average of 51.8 billion Br per month in 2023 to 32.9 billion Br in 2024, with a modest recovery to 42 billion Br in 2025.
Hopes for change now rest partly on the newly launched capital market. With both public and private firms entering the equity and debt markets, the Ethiopian Capital Market Authority expects private sector equity to reach 15 billion Br.
In tandem, the National Bank ended mandatory treasury bill purchases by commercial banks and pension funds, launching a transparent T-bill auction system. The first quarter of 2025/26 targets 117.77 billion Br in issuances.
Worku Lemma, a finance and investment advisor, sees this shift as crucial. “High interest rates on T-bills could activate the debt market,” he said. “It creates a new frontier for private capital.”
Yet old ghosts linger. Ethiopia’s private sector was long stifled under the Derg regime, which nationalized successful firms and left behind investor wariness.
Today, as the state loosens its grip, foreign capital watches carefully.
“New investments are still keeping a cautious eye,” said Worku.
That caution was echoed last year when the European Chamber of Commerce issued a scathing review of Ethiopia’s tax environment. In a policy forum with federal officials, the Chamber cited transparency issues, inconsistent audits, and bureaucratic hurdles as core deterrents. Chairman Ben Depraetere urged the government to build a more predictable, investor-friendly ecosystem.
“The business environment needs to improve,” he said.
The government, for its part, has pointed to recent progress: commercial code revisions, expanded e-governance, and an overhauled investment proclamation. But for many investors, actions—not proclamations—will determine confidence.
Experts like Worku argue that while private investment in Ethiopia is flourishing, thanks to the arrival of foreign giants, its foundation remains fragile. The towers may be rising, and the mist may be thinning, but the road ahead demands more than bold reforms.
“Consistency is a crucial factor,” he said