Research and consulting in Ethiopia

Country overview:

IOA has gathered extensive data on Ethiopia, a powerful yet troubled nation in the Horn of Africa, through years of research and consulting projects. One key conclusion from IOA’s analysts is that the ongoing conflict in the Tigray region, with both government and rebel forces committing abuses, will continue to destabilise the country. The Oromo Liberation Army conflict has eased following a December 2024 peace agreement with a major faction, though smaller splinter groups remain active. The ongoing conflict has led to widespread starvation, with the humanitarian crisis exacerbated by climate change, which has particularly affected the Horn of Africa.

IOA’s economic researchers have noted that Ethiopia’s exports are almost entirely agricultural. Russia is a key ally, and China seeks closer ties, partly due to Addis Ababa hosting the African Union headquarters and Ethiopia’s role as a dominant power in the region. The controversial Grand Ethiopian Renaissance Dam, despite concerns from Egypt and Sudan about potential water resource conflicts, is now fully operational, significantly boosting domestic electricity generation and positioning Ethiopia as a potential energy exporter to neighbouring countries.

Key opportunities in Ethiopia:

As East Africa’s largest economy, Ethiopia is projected to become one of Africa’s top five economies by 2030
Despite its current poverty, Ethiopia’s population – Africa’s second largest after Nigeria – offers a significant market and a potential labor force
The country has made substantial investments in expanding its transportation infrastructure, providing advanced air and rail connections across the region and continent

Key concerns/risks in Ethiopia:

Ongoing ethnic conflicts between various groups have led to a severe humanitarian crisis, particularly in the Tigray region
IOA researchers have identified significant restrictions on political rights and media freedoms, with frequent internet shutdowns
The Horn of Africa has been the region most severely impacted by the negative effects of climate change in Africa

Find out about how IOA can help you with research and consulting services in Ethiopia

Tips on doing business in Ethiopia:

Starting a business:

Foreigners may soon be permitted to own real estate, following a 2024 policy announcement, though implementation remains pending
Registering a company domestically as a foreigner can be costly, requiring the submission of a business plan or project outline to the Ethiopian Investment Commission along with a payment of US$ 150-200k depending on sector
As of 2025, the government has begun to dismantle capital investment thresholds in the trade and retail sectors in favour of a due diligence regime

Doing business:

The Ethiopian government is focused on fostering local industrialisation and has introduced incentives to encourage the establishment of manufacturing projects. These include income tax exemptions for 2 to 5 years across various manufacturing sectors. Additional non-fiscal incentives include the absence of export taxes and minimal to no restrictions on capital
(Read more at: https://ethiopianembassy.org/investing-overview/)
The government, since 2024, has shifted towards adopting floating exchange rate, replacing the long-standing currency peg, which has improved investor confidence and reduced forex distortions

Culture and society:

Business culture in Ethiopia emphasises the importance of building rapport and establishing social connections with potential partners before entering negotiations. Aggressive bargaining is generally discouraged. However, this does not mean that local business culture is informal, as respect for elders and hierarchical seniority are still highly valued
Ethiopia is home to several regional separatist movements, and foreigners are advised against traveling to the country’s border regions with Sudan, Kenya, and Somalia due to security concerns