Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Last Published: 10/30/2019

The primary U.S. exports to Ethiopia include aircraft, aircraft parts, trucks, vehicle and machinery parts, medical equipment, as well as construction and agricultural equipment. The most promising commercial opportunities in Ethiopia, are in agriculture and agro processing, infrastructure, energy, aviation, healthcare, and tourism.

Government Tenders
The Government of Ethiopia (GOE) and its public institutions are the leading buyer and market for U.S. products. The GOE invests heavily in large social and economic infrastructure projects, including power generation, industrial zones and parks, housing construction, water and irrigation, roads and railways, airports and dry ports, telecommunication and internet networks, as well as fertilizer factories. There are prospects for U.S. companies to participate in government tenders. U.S. companies heavily rely on high level advocacy support to win government tenders or overturn unfair or non-transparent tender awards associated with irregularities in the tender process.

The GOE welcomes tender bid proposals accompanied by financing options. Bidders who do not include 100% financing options are usually at a competitive disadvantage. Also, there have been reported issues of lack of transparency and fairness in the tender evaluation process. Therefore, bidders should consider working with CS Ethiopia and using the U.S. Commerce advocacy process (see export.gov) to develop a strategy for bidding prior to the tender evaluation process. EXIM’s capacity to finance U.S. exports was limited to only $10 million as it did not have a full board. On May 8, 2019, the U.S. senate confirmed EXIM three members of board of directors restoring its full financing capacity. The U.S. Overseas Private Investment Bank (OPIC), renamed as Intenrational Development Fiannce Corporation (IDFC) with increased capacity, has shown renewed interest in financing projects in Ethiopia with U.S. equity investment.

Ethiopia is endowed with abundant agricultural resources and has diverse ecological zones for agricultural production. Investment licenses can be obtained from the Ethiopian Investment Commission and land can be leased for up to 99 years from regional and city administration bureaus. Recently, land allocation, compensation, and relocation have posed significant issues for the GOE in terms of equity and transparency. In addition, significant regional autonomy in Ethiopia means that respect for land rights varies across the country. U.S. companies should do their due diligence in advance of making investments requiring land use and/or relocation.

Energy is one of the most significant sectors for Ethiopia’s economic growth and development. GTP II targets an increase in power generation capacity from its current near 4000 MW to over 17,000 MW by 2020. While this goal is ambitious, we expect power generation to increase signficantly in the medium run Ethiopia possesses significant renewable energy potential (renewable sources already account for over 90% of Etihopia’s energy production), especially hydroelectric, and seeks to exploit these resources by increasing the installed capacity of renewable energy sources. The GOE issues tenders for several renewable energy projects with the tender evaluation process focusing on quality and project experience.

Aviation is a high-growth sector with increasing demand for air transportation, both passenger and cargo, expanding at an average 20% growth rate.

Africa Continental Free Trade Area
The Africa Continental Free Trade Agreement (AfCFTA), which entered into force May 2019, unites the 52 African countries that have signed the agreement into one common trade area. Ethiopia has ratified the AfCFTA, facilitating trade across the continent between Ethiopia and the 52 countries that have signed the agreement. The AfCFTA creates an opportunity for U.S. companies to use Ethiopia as a regional trade hub to reach neighboring markets.

African Union Opportunities
The African Union (AU), headquartered in Addis Ababa, Ethiopia, replaced the Organization of African Unity in 2002 and serves as the region’s preeminent intergovernmental organization, grouping Africa’s 55 member states. The United States has been accredited to the AU as an observer, represented by the  U.S. Ambassador that leads the U.S. Mission to the African Union. As enshrined in its long-term strategy Agenda 2063, the AU has the mandate to pursue continental integration as one of its top priorities. In pursuit of this goal, the AU coordinated negotiations on an African Continental Free Trade Area (AfCFTA), intended to reduce tariffs and other barriers to trade among African countries. As of mid 2019, 49 AU member states have signed the AfCFTA Agreement, and the ratification process is ongoing. [Note: Twenty-two signatories had to ratify the Agreement for it to come into force.]

With an annual budget of $450 million, the AU offers a variety of business opportunities. The AU is currently undergoing organizational restructuring, opening up multiple opportunities for U.S. firms to compete for management consulting and other contracts related to the reorganization. The AU hosts dozens of high-level and sector-specific conferences annually, both in Addis Ababa and in other African capitals, requiring significant hospitality and conference support services.

U.S. companies interested in bidding on African Union contracts can find a list of open tenders and the AU’s procurement manual on the AU’s website, https://au.int/en/bids. For additional information on AU procurement, contact: Carine Toure Yemitia, AU Commission Head of Procurement Travel and Store Division, Tel: (+251) 11 551 7700 – Ext 4305, Email: tender@africa-union.org
For more information on U.S.-AU economic and commercial affairs, contact: Pren-Tsilya Boa-Guehe, Economic Officer, U.S. Mission to the African Union, Tel: (+251) 11-130-6174, Email: Boa-GueheP@state.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

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Ethiopia Trade Development and Promotion