Amid shifting policies and persistent instability, investors in Ethiopia are grappling with significant challenges in managing their businesses, with many opting to migrate abroad in search of more favorable opportunities. In response, the Addis Ababa Investors Forum recently brought together key stakeholders, offering a platform for them to share their struggles and call for a united approach to overcome these obstacles.
Ethiopia’s shift to a market-based foreign exchange system in July 2024, which saw the Ethiopian birr devalued by 30% against the US dollar, has further complicated the investment climate, particularly for those looking to enter the country’s industrial parks. “It is not profitable to buy the land with USD,” said Ashenafi Mussie, President of the Addis Ababa Investors Forum. “Because most of our customers are domestic.”
He further noted that many investors are reconsidering their plans to join the industrial parks, as other sectors have become more profitable. “For instance, if an investor wants 10,000 square meters of empty land, it will cost around ETB 400 million. With this investment, the investor could instead start an alternate, more profitable business,” he emphasized.
In addition to these challenges, the Addis Ababa Investors Forum, which represents over 65,000 investors, highlighted several key issues that are hindering investment. The president pointed to a limited land supply, restricted access to credit, higher taxes, and ongoing political instability and insecurity. As a result, many investors are now migrating abroad in search of more favorable opportunities.
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