Addis Ababa, Ethiopia – June 21, 2025 – The Ethiopian Investment Board has issued a significant new directive, Directive No. 1082/2025, which liberalizes foreign participation in the country's export, import, wholesale, and retail trade sectors. This move marks a notable shift from Ethiopia's previous protectionist policies, aiming to attract foreign capital and invigorate its trade landscape.

Historically, Ethiopia maintained strict controls over foreign investment in its trade sectors, largely reserving these areas for domestic businesses. While previous attempts, such as Directive No. 1001/2024, aimed to allow limited foreign entry, they did not achieve the desired transformation. The government has acknowledged that the protected sectors faced challenges related to service delivery, efficiency, and product access. Directive No. 1082/2025 is designed to foster a more competitive business environment, aligning with Ethiopia's broader macroeconomic and structural reform agenda.

The new directive outlines clear conditions for foreign investors seeking to engage in previously restricted trade activities. Foreign investors are now permitted to invest freely in the export of key commodities, including raw coffee, oilseeds, khat, pulses, hides and skins, forest products, poultry, and livestock. To obtain an export trade license, investors must provide a due diligence report verifying their business integrity, financial capacity, and absence from global sanction lists.

Most import sectors, with the exceptions of fertilizer and petroleum, are now open to foreign investors. Requirements include verified integrity reports and compliance documents detailing the source of funds and track record in line with international standards.

Foreign investors can now participate in wholesale trade, excluding fertilizers. This includes selling imported goods and distributing domestically manufactured products. Similar to other sectors, entrants must present integrity and capacity reports to ensure accountability and prevent market abuse.

Perhaps the most significant change is in the retail sector. Foreign investors are required to bring a minimum of $2.5 million in paid-up capital (cash and/or assets) and submit a comprehensive due diligence report. However, the Investment Board retains discretion to approve reputable single-brand retail businesses with a smaller capital base, offering flexibility for globally recognized consumer brands.

To ensure effective implementation and prevent anti-competitive practices, several bodies will oversee the directive: The Ethiopian Investment Commission (EIC) will manage investor applications and issue investment permits; the Ministry of Trade and Regional Integration will monitor retail and wholesale conduct and issue operational licenses; and a Joint Regulatory Committee, comprising representatives from the EIC, Ministry of Industry, Ministry of Revenue, Customs Commission, and the National Bank of Ethiopia, will evaluate the policy's effectiveness.

This liberalization effort signals Ethiopia's commitment to attracting international finance and stabilizing its economy. Analysts suggest that Directive 1082/2025 could draw multinational firms, particularly in agribusiness, retail, and logistics, seeking new market opportunities in Africa. While some local entrepreneurs express concerns about potential displacement, the government emphasizes safeguarding national interests and fostering long-term partnerships.

Source: Addis Insight: (“Ethiopia Opens Trade Sectors to Foreign Investors: New Directive Unlocks Export, Import, Wholesale, and Retail Markets," Addis Insight, June 13, 2025. Available: https://www.addisinsight.net/2025/06/13/ethiopia-opens-trade-sectors-to-foreign-investors-new-directive-unlocks-export-import-wholesale-and-retail-markets/)