Ethiopia has become the second most attractive Foreign Direct Investment destination in Africa with China remaining a leading investment partner to the East African country, a senior Ethiopian official said on Monday.
Zeleke Temesgen, Ethiopian Investment Commissioner, made the remark at a panel discussion entitled “Ethiopia: The New Investment Destination,” jointly organized by the Ethiopian News Agency (ENA) and the Ethiopian Investment Commission.
Temesgen said Ethiopia has emerged as the second top Foreign Direct Investment (FDI) destination in Africa next from Egypt, attracting a total of 18.6 billion U.S. dollars FDI during the previous five years.
“Ethiopia attracted the highest in East Africa and the second highest FDI in Africa, bringing 4 billion U.S. dollar in 2024/2025 Ethiopian fiscal year ending July 7, 2025. The earning showed a 22.7 percent increase compared to the previous year, with Chinese companies investing the highest in the country,” Temesgen said.
Temesgen attributed the growing FDI into the country to the government’s shift toward an open-door investment policy that allowed foreign investors to participate in key investment sectors including export, import, retail and wholesale businesses which were previously restricted for foreign investors.
“Allowing foreign nationals to legally own residential houses within the country has also encouraged foreign citizens and investors to invest their capital in Ethiopia,” said Temesgen, noting that the Ethiopian Investment commission issued 1477 new investment permits for foreign nationals during the previous five years.
Kassahun Gofe, Ethiopia’s Minister of Trade and Regional Integration said that Ethiopia’s strategic location, large and youthful workforce, and improving investment climate position the country as a competitive hub for investment in Africa.
He said the government has implemented a series of reforms aimed at improving the investment climate, including opening up key sectors to foreign investors and expanding the role of private businesses.
Gofe noted that Ethiopia’s participation in the African Continental Free Trade Area (AfCFTA) is also opening new doors and helping the country access to a continental market. “The government is currently working to implement the investment protocol under the AfCFTA agreement to further tap into the huge market opportunity,” he added.
According to the United Nations Conference on Trade and Development, China stands out as a significant investor, accounting for 60 percent of FDI projects in Ethiopia, with substantial investments in manufacturing and service sectors.
Other major investing countries in Ethiopia include Saudi Arabia and Turkey.
MG/abj/APA