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Ethiopia and investment provisions in the AfCFTA: issues and challenges

Briefing/policy papers

Written by Yohannes Ayele, Alemayehu Geda, Guta Legesse, Martha Belete

Briefing/policy papers

The African Continental Free Trade Area (AfCFTA) investment protocol can be leveraged to attract foreign direct investment (FDI) to Ethiopia. Synchronising bilateral and multilateral agreements with domestic economic policies, as well as developing a negotiation position on the National Special Economic Zone Policy to attract FDI, will help Ethiopia prepare ahead of time.

This briefing paper examines Ethiopia's current investment protection regime (including its challenges) and provides practical suggestions on how Ethiopia can leverage the African Continental Free Trade Area (AfCFTA) Protocol on Investment. We do so with the aim to showcase how Ethiopia can support a robust, clear, and predictable investment environment in the country.

We argue that the African Continental Free Trade Area (AfCFTA) Protocol on Investment (PoI) can be leveraged to attract foreign direct investment (FDI) to Ethiopia. We also argue that synchronising bilateral and multilateral agreements with domestic economic policies, as well as developing a negotiation position on the National Special Economic Zone Policy to attract FDI, will help Ethiopia prepare ahead of time. This policy brief provides possible actions to address these issues.

For more information on our AfCFTA work, visit our programme page: Supporting Investment and Trade in Africa.