@AfCFTA – Ethiopian Business Review

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Unilever has become the first foreign company licensed to directly import finished goods into the country. The landmark development was marked by the official launch of Vaseline, Unilever’s world-renowned skincare brand, making high-quality skin health products more accessible than ever to Ethiopian consumers. This follows the Ethiopian Investment Commission’s amendment of Directive No. 1001/2024, which formally opens Ethiopia’s wholesale, retail, import, and export sectors to foreign investors.

This moment reflects the broader impact of Ethiopia’s recent economic reforms, which have begun to reshape trade dynamics and attract global investment by easing import restrictions on finished goods. For the first time, multinational companies like Unilever can bypass traditional import bottlenecks and bring globally trusted brands directly to Ethiopian shelves.

Held in Addis Ababa, the event was more than a typical product launch. It served as a platform to build trust and deepen brand engagement with Ethiopian consumers. Through interactive displays and insightful discussions, attendees were introduced to the full Vaseline product range, with particular emphasis on formulations suited to Ethiopia’s dry air, high altitudes, and varying climates. The experience was thoughtfully designed to establish a strong and enduring connection between the brand and its new market.

“Today is not just a product launch; it’s a celebration of partnership, progress, and our unwavering commitment to the well-being of the Ethiopian people,” stated Nesibu Temesgen, General Manager of Unilever Ethiopia. “The opportunity to directly import Vaseline is a game-changer for us and, more importantly, for Ethiopian consumers. It underscores our dedication to this dynamic market and our promise to provide products that truly make a difference in people’s lives.”

For over a century, Vaseline has stood as a beacon of skin health, from its iconic Vaseline Petroleum Jelly to its comprehensive Intensive Care lotions. These products, known globally for their ability to heal, restore, and protect, will now be readily available across Ethiopia’s diverse communities.

The launch introduces Vaseline’s advanced lotion formulations directly to consumers. Vaseline lotions eliminate the need for extra oils, simplifying and improving skincare routines. They save time and reduce costs, offering a premium solution widely available across Ethiopia starting at ETB 80 for Petroleum Jelly and ETB 300 for Lotions.

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Ethiopia is projected to lose approximately USD 5 million in customs revenue during the first year of implementing the African Continental Free Trade Area (AfCFTA) agreement, according to the Ethiopian Policy Studies Institute.

The projection was disclosed as part of the finalization of Ethiopia’s National AfCFTA Implementation Strategy, which outlines the country’s roadmap for integrating into the continent-wide free trade pact. The strategy was officially launched during a public consultation forum held in Addis Ababa on June 20, 2025.

The high-level event brought together senior government officials, private sector leaders, and development partners. Among the key attendees were Dr. Kassahun Goffe, Minister of Trade and Regional Integration; Yasmin Wohabrebi, State Minister for Trade and Regional Integration; and Dr. Abebe Ambachew, Senior Researcher at the Policy Studies Institute.

According to Dr. Abebe Ambachew, Senior Researcher at the Policy Studies Institute, the estimated revenue loss over a 13-year period could reach USD 83.3 million, with USD 5 million expected in the first year alone. He added that customs duties currently account for about 25.6% of Ethiopia’s total government revenue from imports.

“Given that most of Ethiopia’s trade occurs with non-African countries, the impact of AfCFTA-related tariff losses may not be as severe in the short term,” said Dr. Abebe. “However, the country must take steps to diversify revenue sources and strengthen its export base.”

Speaking at the launch of the ECOTRADE Project, Dr. Kassahun also emphasized Ethiopia’s limited experience in duty-free trade frameworks.

“We have primarily operated within a tax-based trade system and lack practical exposure to free trade. This transition will have direct implications for our customs operations and logistics systems,” he stated.

He further highlighted structural barriers beyond tariff-related issues, pointing to regional connectivity constraints. “Although Ethiopia’s aviation sector ranks first in Africa, it still cannot be effectively utilized for large-scale continental trade,” he added.

The African Continental Free Trade Area (AfCFTA) was signed on March 21, 2018, in Kigali, Rwanda, and officially entered into force on May 30, 2019, after reaching the required number of ratifications. Ethiopia ratified the agreement in 2019 but has yet to fully liberalize its tariffs or participate in the AfCFTA’s Guided Trade Initiative.

Current trade figures show that only 14% of Ethiopia’s exports are destined for African markets, while just 9.6% of imports originate from the continent. This indicates a limited level of trade integration with African partners and suggests that Ethiopia’s gains from AfCFTA may take time to materialize.

To mitigate the projected revenue gap, experts at the forum emphasized the need to expand alternative tax mechanisms and boost export performance, particularly in value-added sectors. Dr. Abebe noted that Ethiopia’s export and import volumes have both shown moderate growth over the past decade, presenting a potential foundation for greater regional trade integration.

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Ethiopia recorded a significant rebound in foreign direct investment (FDI) in 2024, attracting approximately US USD3.98 billion, a 21.9% increase compared to the previous year, according to the latest United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2025.

This growth positions Ethiopia as the leading FDI recipient in East Africa, a region that collectively attracted around USD8.5 billion in 2024, marking modest growth despite a challenging global environment characterized by an 11% decline in worldwide FDI flows.

Neighboring countries contributed to this regional investment landscape with Kenya drawing an estimated USD2.5 billion in FDI, Tanzania about USD1.1 billion, Uganda approximately USD0.7 billion, and Rwanda close to USD0.2 billion. These inflows reflect steady investor interest across sectors such as fintech, manufacturing, infrastructure, renewable energy, agribusiness, and technology.

Ethiopia’s surge is driven by reforms and investments targeting telecommunications, renewable energy, agribusiness, and logistics, marking a recovery after subdued inflows following its 2016/17 peak of USD4.12 billion.

The East African region showed resilience, with greenfield projects increasing by 32% and international project finance deals rising 38%, signaling confidence in new investments despite global FDI contractions.

Regional integration initiatives such as the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA) remain vital in enhancing investment flows and fostering economic diversification across the region.

In a further boost to Ethiopia’s regional economic engagement, the Ministry of Trade and Regional Integration (MoTRI) recently convened a high-level validation workshop on the country’s National AfCFTA Implementation Strategy. The event brought together policymakers, private sector representatives, development partners, and trade experts to review the final draft of the strategy designed to guide Ethiopia’s active participation in the landmark continental trade agreement.

Ethiopia has officially launched the €6 million ECOTRADE Project, a four-year initiative funded by the European Union (EU) to support the country’s implementation of the African Continental Free Trade Area (AfCFTA).

The high-level launch ceremony took place today in Addis Ababa, with the presence of Ethiopia’s Minister of Trade and Regional Integration, Dr. Kassahun Gofe; EU Ambassador to Ethiopia, Sofie From-Emmesberger; Julien Voituriez, First Advisor at the Embassy of France to Ethiopia; and other senior officials, development partners, and private sector representatives.

ECOTRADE, designed and managed by Expertise France, a subsidiary of Agence Française de Développement and France’s public agency, aims to enhance Ethiopia’s trade policy framework by aligning it with AfCFTA protocols, while also building the capacity of public institutions and empowering the private sector—particularly small and medium-sized enterprises (SMEs) and women-led businesses—to effectively participate in regional markets.

“This initiative speaks directly to our national development aspirations,” said Dr. Kassahun. “It supports Ethiopia’s Homegrown Economic Reform Agenda, complements our national trade policy direction, and is anchored in our broader integration goals under the African Union’s Agenda 2063.”

The project will operate in close coordination with the Ministry of Trade and Regional Integration (MoTRI), the Ethiopian Customs Commission, chambers of commerce, exporters’ associations, and other key public-private actors. Through targeted interventions in policy alignment, trade facilitation, and value chain development, ECOTRADE is expected to improve regional connectivity and foster inclusive economic growth.

Ambassador From-Emmesberger reaffirmed the EU’s commitment to Ethiopia’s development through collaborative and people-centered initiatives.

“At the heart of ECOTRADE lies a bold ambition—to enable Ethiopia to reap the full benefits of AfCFTA,” she said. “This means investing in people: entrepreneurs, women traders, customs officials, and students, all of whom are drivers of transformation.”

The ECOTRADE Project also aligns with broader continental and global development goals, including the EU’s Global Gateway strategy and the UN Sustainable Development Goals. It underscores the growing emphasis on trade-led development as a means to boost competitiveness, reduce poverty, and position Ethiopia as a key player in the emerging single African market.

Ethiopia ratified the AfCFTA agreement in 2019 but has yet to fully liberalize its tariffs or engage in the AfCFTA’s Guided Trade Initiative. The ECOTRADE launch comes at a pivotal moment, as Ethiopia is preparing to validate its comprehensive national AfCFTA implementation strategy later today.

To ensure effective execution, MoTRI has established a dedicated coordination office for trade integration and facilitation. This office will work alongside a national implementation committee and three technical working groups tasked with guiding, overseeing, and ensuring accountability across institutions.

The Institute of Foreign Affairs (IFA), in collaboration with the Ministry of Foreign Affairs, held a high-level conference on Tuesday at the Sheraton Hotel under the theme “Exploring New Avenues: Economic Diplomacy as a Mainstay of Ethiopian Foreign Policy.”

The forum brought together leading government institutions — including the Ministry of Finance, Ethiopian Securities Exchange, Ethiopian Investment Holdings, Ethiopian Investment Commission, and the Ministry of Foreign Affairs — to discuss how to align foreign policy with Ethiopia’s economic ambitions.

Central to the discussions was the Homegrown Economic Reform Agenda, launched in September 2019, which aims to liberalize and modernize Ethiopia’s economy. Panelists explored how the reform program is positioning the country to better integrate with the global economy and attract quality investments.

In his opening remarks, IFA Executive Director Jafar Bedru stressed the need to shift diplomatic efforts beyond traditional political frameworks. “Our diplomatic engagements must transcend conventional paradigms and adopt a proactive, business-oriented approach — one that prioritizes investment and trade facilitation,” he said.

Ambassador Workalemahu Desta, Political and Economic Diplomacy Advisor, MoFA, acknowledged that while Ethiopia’s economic and business diplomacy is making progress, it still falls short of matching the opportunities created by recent reforms. He noted the growing global demand for competitive investment destinations, emphasizing Ethiopia’s strategic potential.

“Globally, production and labor costs are soaring. Multinational companies are actively seeking low-cost, stable, and business-friendly environments — and Ethiopia is emerging as a top destination,” he said.

Ambassador Workalemahu also underscored Africa’s growing strategic importance, pointing to the African Continental Free Trade Area (AfCFTA) as a transformative platform. “AfCFTA is unlocking a vast market for investors across Ethiopia. Additionally, our membership in BRICS and the New Development Bank enhances our positioning within the evolving global economic order,” he added.

Dr. Tilahun Kassahun, CEO of the Ethiopian Securities Exchange (ESX), highlighted the need to diversify Ethiopia’s financial landscape to sustain economic growth. He emphasized that beyond traditional financing mechanisms, both local and foreign private investors require access to alternative financial instruments such as portfolio investments. He mentioned that amid the launch of the capital market in Ethiopia, the Ministry of Foreign Affairs must attract investments from abroad as the old technical way of investment has changed to easy and Central Securities Depository. “Beyond simply counting how many remittance accounts are opened, a new key performance indicator (KPI) should be how many CSD accounts are created,” he added.

He also revealed that the capital market is expected to integrate with the interbank lending system in the first week of July. Just six months after its launch, the interbank market has already facilitated over ETB 800 billion in transactions, with daily volumes reaching several ETB billion, he reported.

This comes on the heels of the launch of a Diplomatic Guide for the Homegrown Economic Reform Agenda, unveiled on Monday by the Ministry of Foreign Affairs in collaboration with the Ministry of Finance, the Ethiopian Securities Exchange, and Ethiopian Investment Holdings.

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The African Development Bank Group and the Federal Government of Nigeria have signed a protocol agreement committing USD500 million over 15 years to extend the Nigeria Trust Fund (NTF), providing long-term business continuity and planning certainty through 2040.

This extension comes after multiple previous renewals, reflecting the enduring value and relevance of Nigeria’s partnership with the African Development Bank.

Dr Akinwunmi Adesina, President of the African Development Bank Group said that the commitment will allow the Bank’s ability to expand hybrid capital instruments, increase securitization, and scale up private sector operations. This move is expected to mobilize more private capital for low-income countries. “Nigeria’s decision today proves that Nigeria is always on the right side. The NTF is the largest we have at the African Development Bank, which is part of the Bank. It helps to co-finance operations in many countries, as well as feasibility studies for some other countries.” he added

The agreement also enables deployment of resources from the fund in innovative treasury, structuring, and other transactions, including balance sheet optimization, structured finance, and catalytic risk-sharing solutions.

The Bank and Nigerian authorities are working on new financial products, updating approval processes, and developing a communications strategy to raise visibility for Nigeria’s contributions.

The Nigeria Trust Fund serves as a fully-fledged financial window of the AfDB. Since its creation, the NTF has financed 92 projects in 33 countries. The Fund has played a crucial role in filling financing gaps in high-impact sectors, particularly in the continent’s least developed countries.

Ethiopia is actively courting global investors with bold economic reforms and sectoral liberalization, as it hosts the Invest in Ethiopia – High-Level Business Forum 2025 in Addis Ababa from May 12–13. The event brings together international investors, senior government officials, and development partners to explore opportunities in priority sectors such as renewable energy, agribusiness, ICT, and manufacturing.

Organized by the Ethiopian Investment Commission (EIC), the Ministry of Finance, and the Development Partners Group, the two-day forum signals Ethiopia’s firm commitment to private sector-led growth. The country’s 8.1% GDP growth in 2024 and recent policy reforms have positioned it as one of Africa’s top destinations for investment.

The Forum features high-level ministerial roundtables, sector panels, networking sessions, and the official launch of a new Investment Deal Book, aimed at enhancing transparency and deal-making for foreign investors.

In his opening remarks, President Taye Atske Selassie emphasized the government’s efforts to improve the investment climate by addressing long-standing challenges in foreign direct investment (FDI). “Reforms have been designed to attract FDI, sustain growth, and drive structural transformation,” he noted, adding that infrastructure development and investor-friendly policies are being prioritized to meet Ethiopia’s goal of becoming Africa’s leading economy by 2030.

“We believe we are on the right track to ensure macro-financial stability,” he added. “Our reforms are fundamentally reimagining Ethiopia’s economic future.”

Foreign Minister Gedion Timothewos (PhD) echoed the president’s message, stating that Ethiopia’s young, energetic population, improved logistics, and rapid development of industrial parks make it a natural hub for international investment. He encouraged investors to explore opportunities not just in traditional sectors, but also in mining, energy, and tourism.

Finance Minister Ahmed Shide underlined the importance of macroeconomic stability and structural reforms. “Opening up sectors like telecom, finance, and logistics is already yielding results,” he said. He also highlighted the launch of the Ethiopian capital market as a game-changer in deepening private-sector participation.

EIC Commissioner Zeleke Temesgen Boru (PhD) reported that new investors from 59 countries are participating in the forum—a sign of growing international confidence. He stressed the government’s readiness to provide full support to investors and ensure predictability in policy implementation.

A presentation by Planning and Development Minister Dr. Fitsum Assefa showcased Ethiopia’s natural resources, strategic location, and investment-ready infrastructure, reinforcing the country’s competitive edge in attracting quality investments.

With AfCFTA integration on the horizon, Ethiopia is positioning itself as a regional gateway for investors seeking access to Africa’s fast-growing markets.

Addis Ababa is set to host a landmark event from May 15-17, 2025, as the 5th Pakistan-Africa Trade Development Conference (PATDC) and the Made-in-Pakistan Exhibition take center stage at Millennium Hall. This major event, organized by the Government of Pakistan, the Trade Development Authority of Pakistan (TDAP), and the Embassy of Pakistan in Addis Ababa, promises to create a dynamic platform for strengthening economic and trade partnerships between Pakistan and East African nations.

Atif Sharif Mian, Ambassador of Pakistan to Ethiopia, emphasized the importance of this gathering for both Pakistan and East Africa. “With a population of 250 million, Pakistan represents a vast market for African exports, including commodities, agriculture, and goods. Ethiopia, strategically located, serves as the gateway to East Africa and beyond, including Central Asia, Afghanistan, and Western China,” he said. He further highlighted that improved air connectivity, such as Ethiopian Airlines’ flights to Karachi, and the planned shipping line to Djibouti, will enhance regional trade opportunities.

Dr. Jemal Beker, Ethiopia’s Ambassador to Pakistan, echoed these sentiments, pointing to the immense potential for collaboration. “We have already held forums in Pakistan to showcase Ethiopia’s investment opportunities. As the gap between parallel and official foreign exchange markets has narrowed, we see increasing interest from Pakistani investors in Ethiopia,” Dr. Beker noted. He stressed that the event would promote Ethiopia as a business-friendly hub, offering robust investment prospects.

The 5th PATDC will feature over 130 exhibitors from Pakistan, displaying a wide array of products in sectors such as textiles, pharmaceuticals, engineering, food, agro-products, leather goods, and cosmetics. The exhibition aims to foster B2B interactions, with each Pakistani exhibitor set to engage in 9 to 10 meetings with African buyers, laying the groundwork for strong commercial partnerships.

The event will kick off on May 15, 2025, with a high-level conference that brings together government officials, business leaders, and diplomats from Pakistan and East Africa. Discussions will center on strategies for enhancing trade ties, addressing barriers to business, and advancing regional economic integration. The conference will offer a chance for African nations—including Kenya, Uganda, Tanzania, Rwanda, South Sudan, Djibouti, and Somalia—to explore collaborative trade opportunities with Pakistani counterparts.

The exhibition will also offer ample networking opportunities for delegates and exhibitors, facilitating partnerships that could lead to long-term economic growth. To celebrate the strong cultural and commercial ties between the regions, a gala dinner and cultural night will be held, reinforcing the spirit of mutual cooperation.

In a decisive move that signals Ethiopia’s growing appetite for foreign investment, the Council of Ministers has approved a draft proclamation that will allow foreigners to own or possess immovable property in the country. The new legislation, discussed during the Council’s 44th regular session, marks a pivotal shift in Ethiopia’s real estate policy, traditionally closed to non-citizens.

Government officials underscored that the framework has been designed to stimulate capital inflows without compromising the land rights of Ethiopian citizens. By establishing a clear legal structure for foreign ownership, authorities aim to unlock large-scale investment in housing development, address the chronic mismatch between housing supply and demand, and create new employment opportunities in construction and related sectors. The draft proclamation, now set to be debated by the House of People’s Representatives, is seen as a cornerstone in Ethiopia’s broader strategy to make its urban landscape more accessible and investor-friendly.

The session also tackled other key resolutions aligned with Ethiopia’s vision for structural transformation. One of the standout decisions was the approval of a regulation to implement the African Continental Free Trade Area (AfCFTA) tariff reduction on goods. Once published in the Federal Gazette, the regulation—set to be enforced within a month—will facilitate freer trade among African nations by cutting tariffs that often hinder intra-continental commerce. The Council emphasized that this measure is crucial for accelerating regional economic integration, expanding market linkages, and strengthening Ethiopia’s role in Africa’s evolving value chains.

The Council also ratified Ethiopia’s move to join the African Finance Corporation (AFC), an institution that offers financial and technical assistance to both public and private sector projects across the continent. Membership in the AFC is expected to unlock new funding avenues for critical infrastructure and industrial development, sectors considered vital for long-term economic resilience.

Meanwhile, two interest-free financial assistance agreements—one with the Government of Italy and the other with the International Development Association—were also endorsed. These agreements will support the country’s environmental and green economy initiatives, as well as transformative reforms in the education sector. Officials noted that both loans are in full alignment with Ethiopia’s debt sustainability framework and offer generous grace and repayment periods.

To improve institutional efficiency and customer satisfaction, the Council further discussed and approved new regulations on service fees for the Ministry of Transport and Logistics and the Civil Society Organizations Authority. The changes are intended to reflect the cost of service provision while remaining sensitive to public affordability.

Wrapping up the session, the Council approved a draft proclamation to ratify the bilateral air transport agreement signed with Austria. The pact is expected to strengthen diplomatic and commercial ties, broaden market opportunities for Ethiopian Airlines, and contribute to tourism, foreign investment, and job creation.

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Ethiopia has established 374 additional weekend markets over the past nine months, bringing the total number of operational Saturday and Sunday markets across the country to 1,434. The expansion aims to improve access to goods, stabilize consumer prices, and stimulate local economies through more inclusive trade platforms.

The milestone was revealed during a high-level national macroeconomic and sectoral performance review convened this morning by the Ministry of Trade and Regional Integration. Minister Kassahun Gofe led the session alongside Dr. Belete Molla, Minister of Innovation and Technology. The forum engaged ministry staff and stakeholders in a joint assessment of progress made in the 2017 Ethiopian fiscal year.

The review highlighted major achievements beyond market expansions. Over 2.6 million online business registrations and licenses were processed—marking a 102% achievement against the ministry’s plan. This surge in digital registration reflects the government’s commitment to simplifying and modernizing business procedures.

In a historic first, Ethiopia’s export revenues have surpassed USD 5.3 billion within the same nine-month period—making it the highest figure recorded in the country’s export trade history. The Ministry has set an ambitious target to reach USD 7 billion by the end of the fiscal year.

Efforts in regulating the petroleum sector were also cited as a key success. The ministry noted improved oversight in oil marketing and pricing mechanisms, contributing to better supply stability.

“These achievements are a reflection of the enabling environment created by ongoing macroeconomic reforms,” Minister Kassahun said, crediting institutional collaboration and reform-driven momentum for the performance surge.

The report paints a picture of a country intensifying its trade efforts through local innovation, regulatory improvement, and global engagement—laying the groundwork for more integrated and competitive economic growth.

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Ethiopia’s FDI Surges Nearly 22% to USD4 Billion in 2024, Leading East Africa’s Investment Recovery

Ethiopia, EU Launch €6 Million ECOTRADE Project to Accelerate AfCFTA Implementation

Key Government Institutions Convene to Reinforce Economic Diplomacy as Pillar of Ethiopian Foreign Policy

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Ethiopia Opens Doors to Global Investors in Energy, ICT, Manufacturing, and Agribusiness

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374 New Weekend Markets Launched, Total Reaches 1,434 Nationwide