In today’s globalized world, FDI follows higher earning rates, provided a conducive business ecosystem is in place. Although most developed countries do not have investment-specific legislations there is competition amongst developing countries to adopt a more market-friendly policy to attract the much-sought FDI for their economic development.

The Ethiopian economy has been at the same level of growth and productivity for the last four decades. Economic growth, transformation, and development could not keep up with the speed and pressures of population growth. Unless population takeoff is backed by economic takeoff at the same time, the consequence is dire crisis. The population of the country has grown fast in these decades making Ethiopia the second-most populous country in Sub-Saharan Africa with a population of over 100 million. Currently, the Ethiopian population is increasing by over two million people a year.

The negative impact on African economies of the COVID-19 pandemic was easily evidenced by the shrinking real GDP of all countries, according to reports released from international organizations. Reports further demonstrated that the extent of the economic slowdown in most countries is linked to the level of integration to the global value-chain, particularly to trade and tourism. A drop in world demand leads to a decline in prices for many of the primary commodities. Specifically, the economic contraction is bigger for exporters of fuel and horticultures. This hugely affected production and export of all economies. African countries through the African Union (AU) are calling to the world’s creditors to reduce or cancel debt. The demand for debt reduction is mainly due to the pandemic that has a devastating effect on the continent’s economy.