Ethiopia Opens Trade Sectors to Foreign Investors: New Directive Unlocks Export, Import, Wholesale, and Retail Markets”











ADDIS ABABA, Ethiopia — June 13, 2025 — In a sweeping policy reform aimed at attracting foreign capital and invigorating the country’s trade sector, the Ethiopian Investment Board has issued a landmark directive—Directive No. 1082/2025—lifting long-standing restrictions on foreign participation in export, import, wholesale, and retail trade. The move marks a significant departure from Ethiopia’s traditionally protectionist stance, signaling a bold shift toward liberalizing its domestic markets.

Background: A Policy Rethink

For years, Ethiopia maintained a cautious approach to foreign investment in its trade sectors, reserving large swaths of commercial activity—particularly in import and retail—for domestic investors. The aim was to shield local businesses from foreign competition and to incubate a homegrown entrepreneurial base.

However, the government now acknowledges that Directive No. 1001/2024, which allowed limited foreign entry into select sectors under specific conditions, failed to achieve the anticipated scale of transformation. Despite preferential policies, complaints about poor service delivery, inefficiency, and limited product access persisted across sectors protected from foreign competition.

According to the Investment Board, the new directive is designed to support Ethiopia’s macroeconomic, structural, and sectoral reforms by creating a competitive business environment that fosters both domestic and foreign enterprise.

Key Provisions of Directive 1082/2025

The directive sets out clear and transparent conditions under which foreign investors can participate in previously restricted trade sectors. Here’s what the directive entails:

1. Export Trade: Greenlight for Key Commodities

Foreign investors can now freely invest in the export of:

Raw coffee

Oilseeds

Khat

Pulses

Hides and skins

Forest products

Poultry and livestock

To secure an export trade license, investors must submit a due diligence report validating their business integrity, financial capacity, and absence from global sanction or watch lists.

2. Import Trade: Broad Access With Exceptions

With the exception of fertilizer and petroleum, all import sectors previously reserved for domestic investors are now open. However, foreign investors must submit:

Verified integrity reports

Compliance documents indicating the source of funds and track record in line with international norms

3. Wholesale Trade: Inclusion With Flexibility

Foreign investors can now participate in wholesale trade—excluding fertilizers. They are permitted to:

Sell imported goods

Purchase and distribute domestically manufactured products

All wholesale entrants are required to present similar integrity and capacity reports, ensuring accountability and preventing market abuse.

4. Retail Trade: High Capital Threshold, Select Flexibility

Perhaps the most dramatic policy change lies in retail trade. Under the new rules:

Foreign investors must bring in a minimum of $2.5 million in paid-up capital (cash and/or assets)

A comprehensive due diligence report is mandatory

However, the Board reserves discretionary authority to approve reputable single-brand retail businesses operating at a smaller capital base, indicating potential flexibility for globally recognized consumer brands seeking market entry.

Institutional Oversight: Guardrails and Governance

To ensure robust oversight and prevent anti-competitive practices:

The Ethiopian Investment Commission (EIC) will handle investor applications and issue investment permits.

The Ministry of Trade and Regional Integration will monitor retail and wholesale conduct, and issue operational licenses.

A Joint Regulatory Committee, comprising the EIC, Ministry of Industry, Ministry of Revenue, Customs Commission, and the National Bank of Ethiopia, among others, will evaluate implementation outcomes and ensure the policy’s effectiveness.

Implications: A Signal to Global Investors

This liberalization effort comes at a time when Ethiopia is courting international finance, aiming to stabilize its economy amidst mounting debt and inflation. Analysts suggest that Directive 1082/2025 could attract multinational firms seeking new African markets, particularly in agribusiness, retail, and logistics.

“Ethiopia is signaling that it is open for business,” said a senior official at the Ministry of Finance. “But we are doing so on terms that safeguard national interests and encourage long-term partnerships, not short-term extraction.”

Challenges Ahead

While the directive offers hope for revitalizing Ethiopia’s trade sectors, some local entrepreneurs fear displacement and rising foreign dominance. Critics warn that unless carefully monitored, liberalization could widen inequality and concentrate market power in the hands of foreign conglomerates.

However, the government appears prepared. “This is not a free-for-all,” said Ambassador Girma Birru, Chair of the Investment Board. “It’s a rules-based opening designed to reward integrity, transparency, and mutual benefit.”



As Ethiopia navigates the complexities of economic reform, Directive No. 1082/2025 stands as a bold experiment in balancing openness with national development goals. Its success will depend on fair enforcement, investor accountability, and the government’s ability to shield vulnerable local actors while leveraging foreign capital for inclusive growth.