Doing Business In Ethiopia

  1. Ethiopia's overall Doing Business 2013 ranking is 127 out of 185 economies. Its overall score is 2 points lower compared to last year, reflecting a steep decline of 45 points in the Paying Taxes indicator.
  2. According to the latest Enterprise Surveys (2006), the top 3 obstacles to running a business in Ethiopia are Access to Finance, Access to Land, and Practices of the Informal Sector. However, in Ethiopia 46.0% of firms report having lines of credit or loans from financial institutions, compared to 22.7% regionally. On the other hand, 96.3% of loans in Ethiopia require collateral, compared to the regional average of 80.4%.
  3. Among the 21 countries covered by the Investing Across Sectors indicators in the Sub-Saharan Africa region, Ethiopia presents foreign equity ownership restrictions above average for the region. It imposes restrictions on foreign equity ownership in many sectors, in particular the service industries. Of the 33 sectors covered by the indicators, 13 are closed to foreign capital participation. The list of sectors in which FDI is prohibited includes the telecommunications industry (including fixed-line and mobile/wireless services and infrastructure), the financial services industry (insurance and banking), the media sectors (TV broadcasting and newspaper publishing), the transportation industry, and the retail sector.
  4. Ethiopia’s economic freedom score is 52.0, making its economy the 134th freest in the 2012 Index. Its overall score is 1.5 points higher than last year, reflecting improvements in four of the 10 economic freedoms including investment freedom and monetary freedom. Ethiopia is ranked 28th out of 46 countries in the Sub-Saharan Africa region, and its overall score is slightly below the regional average.

Source: World Bank


Visa Information

Nationals of 33 countries receive one-month visas (US$20) at Bole International Airport. These include USA, Canada, Australia, New Zealand and most of Europe.
Ethiopian embassies abroad charge up to US$63 for visas, and usually require an onward air ticket (or a visa for the next country you’re visiting), a yellow-fever vaccination certificate and proof of sufficient funds. African Ethiopian embassies are less strict.
Visa extensions
Visas can be extended to a maximum of three months in Addis Ababa at the Department of Immigration (0111 553899). It takes 24 hours and costs US$20.
The embassy requires US$30 and two photos. It’s usually a same day service.
Three-month visas cost US$50 (or Birr438) and require one photo. Apply in the morning and pick up the following afternoon. Visas are also easily obtained at the Moyale crossing and Nairobi’s airport.
Visas require US$40 and one passport photo. It takes 24 hours to process. You must call ahead. While Somaliland is proving accessible to intrepid travellers, the recent outbreak of war between Ethiopia and the Islamic militia in Somalia makes Somalia a strict no-go area.
Obtaining a visa can take ages (or simply prove impossible). A letter of introduction from your embassy may help. Visas cost US$61 and require one photo.

Business Etiquette

Meeting Etiquette

Greetings are formal and courteous.

Handshakes are somewhat prolonged and not especially firm.

They are always combined with strong, direct eye contact.

There is generally no touching between the sexes; however, if a foreign businesswoman extends her hand, a cosmopolitan Ethiopian may accept it to avoid causing her offense.

Never rush greeting; enquire about people’s families, health and work.

Government officials may be addressed as "Excellency" without using their name.

Wait to be invited before moving to a first name basis without the honorific title.

Business cards are given without formal ritual.

Present and receive business cards with the right hand only or with both hands.


Communication Style

Ethiopians can be very sensitive when it comes to communication. Since they have only recently begun working with foreigners in business situations they are still getting used to new ways of doing business and communicating. 
As a general rule, they are humble and respect that quality in others. They generally speak in soft tones. Loud voices are seen as too aggressive. Ethiopians pride themselves on their eloquent speaking style and expect others to speak clearly and use metaphor, allusion, and witty innuendoes. They often use exaggerated phrases to emphasize a point. 
As a rule, Ethiopians tend to be non-confrontational and offer what they believe is the expected response rather than say something that might embarrass another. Honour and dignity are crucial to Ethiopians and they will go out of their way to keep from doing something that could bring shame to another person. Therefore, it is important to treat your Ethiopian business colleagues with utmost professionalism and never do anything that would make them lose dignity and respect. 

Business Meetings

Meeting schedules are not very rigid in Ethiopia. There may be an agenda, although it is not part of the local culture. If one is used, it functions as a guideline for the discussion and acts as a springboard to other related business topics. 

Since relationships are extremely important, meetings start with extended social pleasantries. You will be offered tea or coffee and will be expected to ask questions about the other person and respond to questions about yourself. 
Meetings seldom have a scheduled ending time since it is considered more important to complete the meeting satisfactorily than be slavishly tied to the clock. The meeting will end when everyone has had their say and the most senior Ethiopians decide that there is nothing left to be discussed. 
Performing favours indicates friendship. Therefore, Ethiopians feel obliged to do something if asked by a friend. Since they generally only conduct business with people they consider friends, they have difficulty saying "no" to requests from business associates. This does not indicate that they will do what they have agreed to do, however. 

General Business Hours

Banks, post offices and telecommunications offices are open at least 8.30am to 11am and 1.30pm to 3.30pm weekdays and 8.3