The New Ethiopian Investment Legal Regime: Changes and Context

Abstract

Ethiopia has been undergoing tremendous policy and legislative reforms since 2018. The reform generally pursued an ‘open-door’ economic policy replacing previous laws and government decisions that were considered restrictive. Among the key areas that were the subject of the reform was the investment regulatory regime. This article examines the changes introduced in the investment legal regime in the context of historical investment regulation in Ethiopia. It shows that, while the public announcements of the reforms, including those relating to privatization of state-owned enterprises indicated a significant shift in economic policy, the new investment laws adopted a more cautious approach. The new investment laws saw the re-introduction of previously tested rules on investment admission, and re-adjustments of administrative rules in investment administration. While some progressive steps were taken to liberalize previously protected sectors, fundamental and comprehensive changes to investment regulation were not made. More revisions are needed to relax sectoral restrictions, waive minimum capital requirements, ease bureaucratic processes and improve regulatory coordination.