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Ethiopia: Market Profile

Picture: Ethiopia factsheet
Picture: Ethiopia factsheet

1. Overview

Ethiopia has one of the fastest growing economies in the world and the country's location gives it strategic dominance as a business and manufacturing hub in the Horn of Africa region, close to the Middle East and its markets. Ethiopia is landlocked and has been using neighbouring Djibouti's main port for the last two decades. Improving relations between Ethiopia and its regional neighbour Eritrea bode well for businesses in both countries. In particular, improved bilateral relations could give landlocked Ethiopia access to maritime routes through Eritrean seaports of Assab and Massawa for its international trade. Ethiopia's huge population of over 102 million people makes it the second-most populous nation in Africa, and the Abiy Ahmed-led government aims to reach lower middle-income status by 2025 through implementing the second phase of its Growth and Transformation Plan (GTP II). GTP II, which will run to 2020, aims to continue work on physical infrastructure through public investment projects, and to transform Ethiopia into a manufacturing hub. Ethiopia's main challenges are sustaining its positive economic growth by diversifying its economy and strengthening drought resilience, mechanisation and value addition in agriculture, which will help with accelerating poverty reduction. Important measures were taken to address birr overvaluation, large external imbalances, foreign exchange shortages and rising external debt.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

May 2015
The ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) won an overwhelming victory in the general election.

February 2018
Prime Minister Hailemariam Desalegn resigned.

April 2018
Abiy Ahmed, leader of the Oromo ethnic group party in the ruling EPRDF, took over as prime minister, pledging reconciliation and nation-building.

May-June 2018
Ethiopia's government released thousands of political prisoners and lifted the state of emergency.

July 2018
Ethiopia and Eritrea declared an official end to the war and announced that both countries were moving towards restoring diplomatic ties and re-opening avenues for trade and co-operation.

October 2018
The Ethiopian government announced 17 infrastructure projects which intended to develop using public-private partnership contracts. The projects are all in the power and transport sectors, comprising five hydropower plants, eight solar projects and three roads, with a total value of approximately USD7 billion.

October 2018
The government signed a peace deal with the separatist Ogaden National Liberation Front, ending a 34-year armed rebellion.

October 2018
Parliament elected Sahle-Work Zewde as Ethiopia's first woman president, and first female head of state since Empress Zawditu (1916-1930).

February 2019
The Ethiopian cabinet ratified the country's membership to the African Continental Free Trade Area (AfCFTA) on February 4, 2019.

April 2019
State Grid Corporation of China (SGCC) signed a USD1.8 billion investment deal to provide electric power transmission and distribution lines to Ethiopia. The works would help supply power to up to 16 industrial parks, the Addis Ababa to Djibouti second railway line and four different cities in the country.

Mainland China and Ethiopia have also signed agreements including a financing agreement for the development of a plaza and 12km of the 'Beautifying Sheger' river bank project. The agreements also cover provision of grants for technical cooperation and food aid, a Belt and Road Initiative five-year cooperation plan and a memorandum of understanding operationalising cooperation under Forum on China–Africa Cooperation.

Sources: BBC Country Profile – Timeline, Fitch Solutions, Tralac, National Sources

3. Major Economic Indicators

Graph: Ethiopia real GDP and inflation
Graph: Ethiopia real GDP and inflation
Graph: Ethiopia GDP by sector (2017)
Graph: Ethiopia GDP by sector (2017)
Graph: Ethiopia unemployment rate
Graph: Ethiopia unemployment rate
Graph: Ethiopia current account balance
Graph: Ethiopia current account balance

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: June 13, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Ethiopia merchandise trade
Graph: Ethiopia merchandise trade

e = estimate
Note: For exports, estimates start from 2013, for imports, estimates start from 2016
Sources: WTO, Fitch Solutions
Date last reviewed: June 13, 2019

Graph: Ethiopia major export commodities (2017)
Graph: Ethiopia major export commodities (2017)
Graph: Ethiopia major export markets (2017)
Graph: Ethiopia major export markets (2017)
Graph: Ethiopia major import commodities (2017)
Note: Unclassified products are not included on the chart as they account for less than 1% of total imports
Graph: Ethiopia major import commodities (2017)
Note: Unclassified products are not included on the chart as they account for less than 1% of total imports
Graph: Ethiopia major import markets (2017)
Graph: Ethiopia major import markets (2017)

Note: Direct data is not available for 2018
Sources: Trade Map, Fitch Solutions
Date last reviewed: June 13, 2019

4.2 Trade in Services

Graph: Ethiopia trade in services
Graph: Ethiopia trade in services

Note: 2017 data not available at time of extraction
Sources: WTO, Fitch Solutions
Date last reviewed: June 13, 2019

5. Trade Policies

  • A number of export incentives are available, including facilitation of access to working capital finance. The government-dominated banking sector allocates financial resources to priority areas (agriculture, industrial activities, trade and infrastructure) in line with the government's strategic objectives.

  • The National Bank of Ethiopia (NBE) administers a strict foreign currency control regime, and the Ethiopian birr (ETB) is not freely convertible. As a result, some importers face delays in arranging cross-border payments.

  • Unless exempted by law, items imported into Ethiopia are subject to a number of taxes. The government levies five kinds of taxes on import items. These taxes are assigned priority levels and are calculated in a sequential order. These taxes, in their sequential order, are customs duty, excise tax, value-added tax (VAT), surtax and withholding tax. Taxes on imported goods are collected by the Ethiopian Revenues and Customs Authority.

  • Ethiopia is a member of the Customs Co-operation Council. Ethiopia has reduced customs duties on a wide range of imports and duties are levied at rates ranging from 0% to 35%. Rates on category one goods (such as raw materials, semi-finished goods, producers' goods and items imported for public use, such as minibuses, buses ) range from 0% to 10%. The rates are 20% to 35% for category two goods (consumer or finished goods imported for personal use or for a non-productive purpose). Visitors are allowed to import items up to a specified value duty-free. Excise tax applies on a variety of goods.

  • All importers and exporters must be registered with the Ministry of Trade and obtain a trading licence. The ministry regulates imports. Foreign exchange permits are required for all importers. Highly protective tariffs are applied on certain items, such as textile products and leather goods, to protect local industries.

  • The Ethiopian government has banned exports of raw cotton due to a rise in demand from local textile and garment manufacturers.

  • The NBE must approve all foreign currency transactions, and importers need to apply for an import permit and obtain a letter of credit for the total value of the imports before orders can be made.

  • Ethiopia is currently not a member of any customs unions, and has observer status with the World Trade Organization (WTO). Ethiopia is also a member of the Common Market for Eastern and Southern Africa (COMESA), and is in the final negotiation stages to join COMESA's Free Trade Area.

Sources: WTO – Trade Policy Review, Fitch Solutions

6. Trade Agreement

6.1 Multinational Trade Agreements


  1. Ethiopia-Sudan: Ethiopia and Sudan signed a preferential trade agreement (PTA) which entered into force on February 6, 2003. In 2017, Ethiopia and Sudan agreed to launch a free trade zone, a railway line and to promote equitable use of the water of the Nile. Ethiopia and Sudan have also agreed on a deal allowing Ethiopia to take a stake in Sudan's largest sea gateway port – Port Sudan. Nevertheless, trade with Sudan accounts for a small share of Ethiopia's total trade.

  2. AfCFTA: This agreement has the goal of creating a single continental market for goods and services, with free movement of business persons and investments once the agreement is ratified. Better market access creates economies of scale, which is a boon for Africa's small producers, particularly in the agriculture space, such that many smallholder and commercial farmers in Ethiopia would benefit. The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than USD3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization. Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3% by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.

Under Negotiation

  1. The COMESA: COMESA is a free trade area with 21 member states stretching from Tunisia to eSwatini. COMESA was formed in December 1994, replacing a PTA which had existed since 1981. Ethiopia played a significant role in establishing COMESA, but it is still not part of its free trade agreement (FTA). As a first step towards joining the FTA, Ethiopia reduced tariffs for COMESA originating products by 10% in 1989. In 2014, a study on the competitiveness of Ethiopian firms participating in the COMESA FTA was undertaken. The study recommended a phase down of products on which tariffs could be reduced to zero by 2019. The country is consulting on effecting further reductions.

  2. Ethiopia-Egypt FTA: While this agreement is still under negotiation, the removal of trade barriers would benefit investors and regional trade.

Sources: WTO Regional Trade Agreements database, COMESA, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Ethiopia FDI stock
Graph: Ethiopia FDI stock
Graph: Ethiopia FDI flow
Graph: Ethiopia FDI flow

Note: No outward FDI data available
Sources: UNCTAD, Fitch Solutions
Date last reviewed: June 13, 2019

7.2 Foreign Direct Investment Policy

  1. Attracting foreign investment is a key objective of the Ethiopian government, embedded within its current (2016-2020) five-year GTP II. The government is seeking to attract investment in the high-priority sectors of heavy and light manufacturing, agribusiness, textiles, sugar, chemicals, pharmaceuticals, and mineral and metals processing. The government is taking steps to streamline the investment process by developing a more efficient 'one-stop-shop' facility for foreign investors.

  2. Ethiopia's Investment Code provides incentives for development-related investments, reduces capital entry requirements for joint ventures, permits the duty-free import of some capital goods and opens the real estate sector to foreign investors, among other incentives.

  3. Overall economic growth targets are an annual average GDP growth of 11%. In line with its manufacturing strategy, the country also hopes the industrial sector will grow by an average of 20%, thereby creating more jobs. Over a multi-year time horizon, rising manufactured goods exports will continue to bolster export growth. Industrial parks in Melle, Dire Dawa, Adama and several other locations are set to come online by the end of 2019, in line with the government's plans for Ethiopia to become a larger regional manufacturing hub in the long term. With a devaluation of the birr going some way towards boosting export competitiveness, this will further facilitate a rise in the trade of manufactured goods over time.

  4. The industrial parks programme is the centre of the Ethiopian government’s industrialisation goal, which seeks to make the country a leading hub for light manufacturing in Africa by 2025. This is increasingly attracting global companies, especially labour-intensive firms in the garment and textile industry looking to hedge against the rising cost of labour in some regions, such as Asia. According to the Ethiopian Industrial Parks Development Corporation (IPDC), which develops and administers government-owned parks, five government-owned parks are in operation as of May 2019 (Bole lemi-I, Hawassa Cycle I, Hawassa Phase Cycle-II, Mekelle and Kombolcha). One park, the Debre-Birhan, has been inaugurated, while five others are under construction. The following are some of the key developments to highlight the growing popularity of the industrial parks programme and of Ethiopia in general as an investment destination among international businesses:

    • As of March 2019, two of the five operational parks with a total of 29 sheds were fully occupied by apparel and textile manufacturing businesses.

    • H&M, Tommy Hilfiger, Otto Kessler, Calvin Klein, Speedo, IZOD, Van Heusen, Tesco, Arrow, Warner’s and Olga are among the many global businesses that have either set up manufacturing operations in Ethiopia or are sourcing garment and textile products from the country.

    • The Ethiopian Investment Commission (EIC) indicates that foreign direct investment in the textile industry has grown to USD36.8 billion in 2017 from USD166.5 million in 2013.

    • Chinese companies are among the top investors, but there is strong interest or presence among companies from other countries, particularly key garment and textile manufacturing countries, such as India, Bangladesh and Turkey. According to the EIC, 71 of the 124 foreign companies that have expressed interest in the textile industry in Ethiopia are from China, while 30 are from India.

    • Huajian Group, one of China's largest shoe exporters, opened its first factory in Ethiopia in 2011 and the company has reportedly invested more than USD100 million since 2011.

    • In 2010, Ayka Addis, a Turkish manufacturer of textiles, inaugurated a USD140 million factory in Almgena, near Addis Ababa. The factory has capacity to export USD100 million worth of textile products each year.

  5. The Ethiopian government is aggressively mobilising capital into new power projects, with its second GTP II outlining a robust power projects pipeline that will strengthen the capacity for electricity generation over the next decade. Under the GTP II, the government plans to mobilise USD20 billion of investment in order to build 10-12 new power generation facilities.

  6. Industrial parks will be particularly beneficial to the manufacturing sector, with tax and duty incentives set by the government to accompany investments in the textile and garment industry, leather and leather products, sugar and sugar-related products, cement, metal and engineering, chemicals, pharmaceuticals and agro-processing. Incentives for developers include a tax holiday of as long as 15 years and duty-free privileges, with further advantages for building done outside the capital. Incentives for manufacturers include tax exemptions of 10 years if they export all their products from a site not in Addis Ababa.

  7. State-owned enterprises (SOEs) dominate major sectors of the economy and preference is given to them for investment, access to credit, foreign exchange, land, procurement contracts and import duties. Traditionally, very few SOEs release detailed financial statements, which makes it difficult to scrutinise their financial data. Corporate governance of SOEs is monitored by a board of directors composed of senior government officials. That said, the Ministry of Public Enterprises has begun streamlining governance and financial management of SOEs, as well as improving transparency.

  8. Ethiopia's foreign ownership restrictions are above average for the region, particularly in the service industries. Certain sectors are reserved to domestic investors. Reserved sectors include: broadcasting, retail and wholesale trade (except in petroleum and locally produced goods), import trade, export trade of local agricultural products, small- and medium-scale construction, bars and nightclubs, small hotels and restaurants, travel agencies, car and taxi services, bakery products, grinding mills, barber shops and beauty salons, goldsmith shops, tailoring services, building and vehicle maintenance services, saw-milling, customs clearance, museums and theatres and printing.

  9. A comparatively large number of sectors are dominated by government entities, including telecommunications, defence, financial services, media, transportation, and retail. Notable additional sectors dominated by publicly owned enterprises include electricity and transport.

  10. All foreigners are required to open accounts denominated in ETB with one of the commercial banks or authorised dealers or with special permission from the NBE. Credits to the accounts can be made only with foreign exchange receipts from abroad or checks from other similar accounts. Credits between two locally-based accounts are not permitted.

  11. All foreign currency transactions must be approved by the NBE. The birr usually operates under a managed float regime, which sometimes raises risks of foreign currency liquidity constraints.

  12. There are no discriminatory or excessively onerous visa, residence or work permit requirements applicable to foreign investors.

  13. Foreign currency exceeding the equivalent of USD3,000 must be declared to customs upon arrival in the country. The exchange of foreign currency is permitted only via authorised banks. Currency up to the equivalent of USD40,000 may be exported.

  14. The Ethiopian government's recent policy shift in mid-2018 to allow private and foreign investment in two of its key SOEs – the state telecommunications company Ethio Telecom and air carrier Ethiopian Airlines – suggests upside risks for further economic reforms in the quarters ahead. This will open more opportunities for foreign investors, as in September 2018 the government further announced that foreign ownership will be allowed up to 49% in the logistics businesses. Previously, foreign participation was not allowed.

  15. The Banking and Financial Services sector – which is dominated by SOEs – remains closed off to foreign investors. At present, foreign banks are only allowed to have liaison offices in the capital city of Addis Ababa, mainly to facilitate credit to companies from their home countries and not to provide financial services for the domestic market. Ethiopia's state-owned banks represent one of the most important lenders to the government and other SOEs. This allows the government to allocate resources to its priority areas (agriculture, industrial activities, trade and infrastructure) in line with its strategic objectives.

Sources: Ethiopia Ministry of Revenues, Fitch Solutions

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Investment incentives (general)Ethiopia's Investment Code outlines the following:

- Provides incentives for development-related investments
- Reduces capital entry requirements for joint ventures
- Permits the duty-free import of capital goods (except computers and vehicles)
- Opens the real estate sector to foreign investors
- Extends the relief for losses carried forward
- Gives priority to investors for the lease of land

To encourage private investment and promote the inflow of foreign capital and technology into Ethiopia, the following incentives are granted to both domestic and foreign investors engaged in qualifying areas:

- Exemption from customs duties for certain eligible investors
- Income tax holidays
- Duty draw-back schemes, voucher schemes and bonded manufacturing warehouse schemes
Export credit guarantee- This scheme is available to safeguard local banks against losses they may incur from financing an export trade by local businesses.

- The scheme, which is guaranteed by the Development Bank of Ethiopia (one of the state-owned financial institutions), helps to ease liquidity or funding constraints due to the reluctance of domestic commercial banks to provide funding for exporters.
State-owned special economic zones (SEZs) in operation include Bole-Lemi I and Addis Industrial Park, located near Addis Ababa, as well as Hawassa Industrial Park in the south, Kombolcha and Mekelle

Private industrial zones include Dukem, Sendafa, Ayka Addis, Hujian Industrial Zone
These zones hold numerous benefits for apparel industry, including tax exemptions, duty-free privileges and fewer bureaucratic procedures. Specifically, investors benefit from:

- Exemption from customs duties for certain eligible investors
- Income tax holidays
- Duty draw-back schemes
- Voucher schemes
- Bonded manufacturing warehouse schemes
- A number of export incentives are available, including facilitation of access to working capital finance
Income tax exemptions- The exemption period depends on the sub-sector, investment type (new versus expansion or upgrading existing enterprises) as well as on the location (Addis Ababa and the Special Zone of Oromia surrounding Addis Ababa versus other areas).

- Depending on the sub-sector, investment in Addis Ababa and the Special Zone of Oromia surrounding Addis Ababa is eligible for 100% income tax exemption for a period ranging from one year to five years.

- Investment in other areas is eligible for 100% income tax exemption for a period of one year to six years.

- A business is allowed to carry forward a loss for a period half of the original income tax exemption period if it incurred a loss in the original income tax exemption period, though this cannot exceed five income tax periods.

- In addition, investors expanding or upgrading their existing facilities will be entitled to these income tax incentives. Investors establishing their enterprises in certain specified states (mainly underprivileged) will receive an additional 30% income tax deduction for an additional three years following the expiration of the general incentive period.

- Businesses exporting more than 80% of their manufactured products or supply inputs to another business that exports its output are eligible for an additional two years of tax exemption if they are located in an industrial zone in Addis Ababa or the Special Zone of Oromia or for four additional years if it is located in an industrial zone in other areas.
Custom duty exemption- Capital goods, construction equipment and materials that businesses import to establish new or expand their existing enterprises are eligible for duty-free import.

- There are a few activities for which this incentive is not available, including real estate development, publishing and the supply of petroleum and its by-products.

Sources: Fitch Solutions, National Sources

8. Taxation – 2019

  • Value Added Tax: 15%
  • Corporate Income Tax: 30%

Source: Ethiopian Ministry of Revenues

8.1 Important Updates to Taxation Information

As part of modernising its services, the Ministry of Revenue of Ethiopia is set to start collecting tax from large tax payers using electronic payment system. The e-tax payment system is planned to be fully operational in the 2019 fiscal year. The e-tax payment has been tested on the system of Commercial Bank of Ethiopia, the state financial institution which has over half market share of the banking business in Ethiopia.

8.2 Ethiopia – Business Taxes

Type of TaxTax Rate and Base
Resident company: Corporate Tax Rates
30% on profits
Turnover Tax2% and 10% on goods and services
Excise Tax35-100% on specified goods manufactured in Ethiopia and on imports
Customs duties0-35% on imports
Social security contributions- The employer must contribute to the social security scheme on behalf of the employee at a rate of 11% of basic salary
- The employee’s contribution is 7%
VAT/GST (standard)15% on sale of goods and services

Source: Ethiopian Ministry of Revenues
Date last reviewed: June 13, 2019

9. Foreign Worker Requirements

9.1 Localisation Requirements

Companies encounter few barriers when hiring expatriate workers. All foreigners wishing to engage in employment in Ethiopia are required to obtain a work permit, which will be granted if the employer can prove that the job cannot be performed by a local recruit.

9.2 Foreign Worker Permits

Expatriates and work permit visas may be secured via an application to an Ethiopian diplomatic or consular mission abroad. The eligibility criteria for obtaining a work permit are set by the Ethiopian Ministry of Labour and Social Affairs. The requirements may differ depending on the type of organisation that intends to hire the expatriate worker or depending on the type of permit sought (i.e., a new work permit, renewal of an existing permit or clearance for a permit). A work permit for expatriates working for a foreign investor upon submission of an investment permit is issued by the Ministry of Labour and Social Affairs. With regard to family members, spouses and children are entitled to stay in the country on special passes, the validity of which depends on the corresponding work permit.

9.3 Visa/Travel Restrictions

Only citizens of Djibouti and Kenya can travel visa-free to Ethiopia. Forty countries, including South Africa, the United States, Canada, Australia, India and mainland China, are issued visas on arrival that are valid for up to three months. Most other African, Middle Eastern and Latin American countries require visas before arrival.

Sources: Government websites, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
B1 (Stable)23/02/2018
Standard & Poor'sB (Stable)09/05/2014
Fitch Ratings
B (Stable)23/11/2018

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World CompetitivenessN/AN/AN/A

Sources: World Bank, IMD, Transparency International, Fitch Solution

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index RankN/A128/202137/202
Short-Term Economic Risk Score
Long-Term Economic Risk Score45.747.046.5
Political Risk Index RankN/A180/202180/202
Short-Term Political Risk Score47.547.947.9
Long-Term Political Risk Score38.741.741.7
Operational Risk Index RankN/A161/201163/202
Operational Risk Score34.434.934.5

Source: Fitch Solutions
Date last reviewed: June 13, 2019

10.4 Fitch Solutions Risk Summary

Ethiopia will post robust growth over the next 10 years, benefitting from continued gains in the agricultural sector, robust infrastructure investment and a rapidly expanding manufacturing sector. Furthermore, the advent of a more reform-minded leader bodes well for political and economic stability in the medium term. With the country's sizeable population, improving logistics and low electricity prices, the country will, increasingly, position itself as a regional manufacturing hub over the next decade. From a risk perspective, Ethiopia's agriculture-based economy remains highly susceptible to adverse weather conditions, while the private sector remains broadly underdeveloped, inhibiting the economy's resilience to shocks in key sectors such as agriculture. Furthermore, Ethiopia's main internal challenges are accelerating poverty reduction and reducing legal risks for businesses.

Ethiopia is one of the most attractive markets in East Africa over the long-term horizon on account of its promising economic outlook, driven by infrastructure-led investments, a large pool of available labour and abundant natural resources. Nonetheless, even though the country has seen strong growth over the past two decades, it is still operating below potential on account of risk factors stemming from an underdeveloped internal transport network, low electrification rates, limited access to credit, high-reliance on foreign aid, a largely unskilled labour pool, wide regional disparities in access to basic services, and security challenges in the Horn of Africa. A solid expansion in the agricultural sector and rising infrastructure spending are set to drive growth in 2019-2020. That said, the pace of economic reform could significantly influence GDP growth and macroeconomic stability. Exchange rate restrictions, coupled with a significant current account deficit, could also restrain business activity in the near term.

Source: Fitch Solutions
Date last reviewed: May 27, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Ethiopia short term political risk index
Graph: Ethiopia short term political risk index
Graph: Ethiopia long term political risk index
Graph: Ethiopia long term political risk index
Graph: Ethiopia short term economic risk index
Graph: Ethiopia short term economic risk index
Graph: Ethiopia long term economic risk index
Graph: Ethiopia long term economic risk index

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Political and Economic Risk Indices
Date last reviewed: June 13, 2019

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Ethiopia Score34.542.430.536.728.6
East Africa Average32.0
East Africa Position (out of 11)6
SSA Average34.538.234.533.332.0
SSA Position (out of 48)2212301328
Global Average49.750.349.849.049.8
Global Position (out of 201)163146169141167

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Ethiopia vs global and regional averages
Graph: Ethiopia vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Security Risk Index
South Sudan18.734.019.316.84.5
Regional Averages32.039.833.031.623.6
Emerging Markets Averages46.048.146.547.444.8
Global Markets Averages49.750.3

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: June 13, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Ethiopia

Graph: Major export commodities to Ethiopia (2018)
Graph: Major export commodities to Ethiopia (2018)
Graph: Major import commodities from Ethiopia (2018)
Graph: Major import commodities from Ethiopia (2018)

Note: Graph shows the main Hong Kong exports to/imports from Ethiopia (by consignment)
Date last reviewed: June 13, 2019

Graph: Merchandise exports to Ethiopia
Graph: Merchandise exports to Ethiopia
Graph: Merchandise imports from Ethiopia
Graph: Merchandise imports from Ethiopia

Note: Graph shows Hong Kong exports to/imports from Ethiopia (by consignment)
Exchange Rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: June 13, 2019

Growth rate (%)
Number of Ethiopian residents visiting Hong Kong896

Sources: Hong Kong Tourism Board, Fitch Solutions

2017Growth rate (%)
Number of African residents visiting Hong Kong142,512

Sources: Hong Kong Tourism Board, Fitch Solutions
Date last reviewed: June 13, 2019

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Ethiopian companies in Hong KongN/AN/A
- Regional headquarters
- Regional offices
- Local offices

11.3 Treaties and Agreements between Hong Kong and Ethiopia

  • There is a bilateral investment treaty agreement between Ethiopia and mainland China signed in 1998, and which came into effect in 2000.
  • In May 2010, the agreement between Ethiopia and Hong Kong governing the avoidance of double taxation from exercise of international air transportation activities came into force.

Sources: UNCTAD, Hong Kong Inland Revenue Department

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Consulate of Ethiopia in Hong Kong
Address: Room 1204, 12/F, Harbour Crystal Centre, 100 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong
Email: ethiopia_consulate@hotmail.com
Tel: (852) 2363 0200
Fax: (852) 3579 2722

Source: Hong Kong Protocol Division Government Secretartiat

11.5 Visa Requirements for Hong Kong Residents

Hong Kong residents may obtain a tourist visa valid for up to three months on arrival at Addis Ababa (Bole) International airport, at a cost of approximately USD52 for one month and USD72 for three months. To get a visa on arrival, travellers need to also have two passport photographs. In June 2018, Ethiopia launched an 'e-visa'. This allows Hong Kong residents to easily apply for tourist visas (more visa categories will be added in future). All other categories of visitors must get a visa from the Ethiopian Embassy closest to their place of legal residence before travelling.

Source: Main Department for Immigration and Nationality Affairs, Ethiopia
Date last reviewed: June 13, 2019

Content provided by Picture: Fitch Solutions – BMI Research
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