The Ethiopian Government has formulated and started the implementation of the second five year Growth and Transformation Plan (GTP) to carry forward the important strategic directions to maintaining a fast growing economy in all sectors.
Ethiopia’s economy is largely based on agriculture, which in 2016 was estimated to account for 36.2 percent of the GDP, 90 percent of foreign currency earnings, and 85 percent of employment. Coffee is the most important commodity to the Ethiopian economy. The other important export products include gold, oil seeds, chat, flowers, pulses, live animals, leather and leather products, meat products, and fruits and vegetables. The services sector is the fastest expanding sector and also constituted close to 46.8 percent of the GDP in 2016. The industrial sector, which mainly comprises small and medium enterprises, accounted for about 17 percent of the GDP in 2016.
The Government of Ethiopia has attempted to promote private sector investment through the provision of investment incentives, by implementing an investor friendly taxation, Trade and credit system, and by simplifying and clarifying business and administrative procedures for investors.
For an extensive overview of Ethiopia’s regulatory and business environment, please click here to read the online version of Ethiopia’s chapter of the ALN Investment Guide, prepared by Mesfin Tafesse & Associates Law Office (MTA) below.