Ethiopia’s reputation as an investment hub has been tarnished by issues such as corruption, lack of foreign exchange, inter-ethnic conflicts, and intermittent violence. Because of these conflicts, agricultural exports particularly sesame, coffee, flowers, fruits, vegetables and others have been severely impacted. Exporters face difficulties in finding markets, dealing with rising costs domestically, and navigating security risks which have heightened the business risks they face. The government’s focus on obtaining foreign currency to service its debts and finance the import of key commodities such as fertilizer and fuel has further strained the business environment. The cancellation of Ethiopia’s membership in the African Growth and Opportunity Act (AGOA) by the United States has further affected exports, especially in the garment and apparel industries. Some exporters are considering selling or abandoning their investments, while others are exploring opportunities in the local market as an alternative. Despite these realities, Ethiopia has recently ranked at the top among countries offering vast business prospects in Africa according to the 2023 Africa Risk-Reward Index which was published last September by the Africa Oxford Economics. EBR’s Samuel Getachew dives into the report and discusses the multifaceted challenges local and foreign investors face the prevailing business environment.