Ethiopia

Ethiopia, Africa’s oldest independent nation and the second most populous country after Nigeria, boasts a young and growing population of almost 110 million. With its large consumer markets, low-cost labor, global connectivity through its aviation hub and a national airline with approximately 125 passenger connections, Ethiopia is a preferred destination for foreign direct investment (FDI) on the continent. Owing to its reform-minded government, Ethiopia also has a remarkable track record in growth and poverty reduction, as well as in public investment in infrastructure development. A signatory to the Paris Agreement on Climate Change, the country aims to build a green, resilient and diversified economy through investments in hydroelectric power, tourism and digital technologies, among others.

Still, challenges persist. A landlocked nation with over 90% of exports passing through neighboring Djibouti, Ethiopia faces logistical bottlenecks, high land transportation costs, and bureaucratic delays. The underdeveloped banking system hinders private sector growth, and the country struggles to develop exports beyond primary commodities. Agriculture, which provides the majority of employment, is sensitive to weather conditions and changes in world commodity prices. Other weaknesses include insufficient power supply and an unstable regional environment with high ethnic and political tensions.