Business Dynamics: Ethiopia

October 2025

Ethiopia's business environment showed mixed progress from 2019 to 2024, with significant improvements in business and trade freedom, but setbacks in labour and monetary freedom. In addition, the country's judicial effectiveness and corruption issues pose risks to investor confidence. Furthermore, despite these challenges, technological advancements and a stable banking sector offer potential opportunities for economic growth and innovation.

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Overview:

The Country Briefings series examine market potential, economic and consumer trends impacting each country and how they are set to change.

Each Country Briefing covers one of these topics:

Economy, Finance and Trade: Understanding the structure, health and potential risks of an economy are important for decision-making within an existing operating environment as well as for expansion strategies. Real GDP growth, inflation and exchange rate fluctuations will directly impact consumer market potential. Import and export trade profiles help gauge how open an economy is to trade and investment, while analysis of government finances can be used to explore macroeconomic stability and susceptibility to economic shocks.

Income and Expenditure: Insights into income, wealth and expenditure of consumers are vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Households: Global shifts in gender, ageing, migration and housing are transforming the size, location,  general make-up as well as income and expenditure of households around the globe, with diverse implications for governments and companies. Households insights can help identify the decision-making processes and consumption tastes of different household groups and types within a country, and assess household appliance and digital readiness that is key for formulating market technology and internet strategies.

Business Dynamics: A stable and competitive business environment is vital to operate efficiently and attract inward investment. Businesses can assess these factors alongside challenges such as corruption, political instability and terrorism, also gain insight into business operating environment and make strategic investment decisions. Transport infrastructure, ICT readiness and labour force dynamics will also identify potential issues with a supply chain and the level of workforce skills.

Commodities: Insights on key sectors directly related to the environmental commodities of a country such as energy, water, pollution, environmental resilience, forest and biodiversity and food and agriculture help businesses to make strategic decisions in relation to environmental and commodities trends, improve brand reputation and ensure long-term operations while ultimately growing the bottom line.

The briefings cover 103 countries and identify topics of crucial interest to planners, marketers and researchers.

Business Dynamics: Ethiopia

HEADLINES

Ethiopia's business environment supported by Homegrown Economic Reform Program
Persistent investment restrictions remain despite efforts to open trade sectors
Lack of skills development restricts labour market progress
Major milestone as Ethiopia begins trading under the African Continental Free Trade Area
Ethiopia lags in digitalisation but forecasts gradual improvements over five years
Chart 1 Operational and Legal Environment Key Indicators 2024
Chart 2 Index of Economic Freedom Ranking by Pillar in Ethiopia and Regional Comparison 2024
Chart 3 Index of Economic Freedom Ranking 2019-2024
Chart 4 Index of Economic Freedom: Judicial Effectiveness Pillar Rank in Ethiopia and Regional Comparison 2019-2024
Chart 5 Index of Economic Freedom: Government Integrity Pillar Rank in Ethiopia and Regional Comparison 2019-2024
Chart 6 Corruption Perceptions Ranking: Ethiopia and Regional Comparison 2019-2024
Chart 7 Key Financial and Investment Indicators 2024
Chart 8 Index of Economic Freedom: Property Rights Pillar Rank in Ethiopia and Regional Comparison 2019-2024
Chart 9 Bank Nonperforming Loans to Total Gross Loans 2019-2024
Chart 10 Key Skills and Labour Indicators 2024
Chart 11 Population Aged 15+ with Higher Education 2019-2024
Chart 12 Education Indicators 2024
Chart 13 Number of University Graduates by Programme 2024
Chart 14 Employment by Age 2024
Chart 15 Employment by Gender 2024
Chart 16 Youth Unemployment Rate 2019-2024
Chart 17 Labour Structure Change 2019-2024
Chart 18 Labour Structure Comparison 2024
Chart 19 Self-Employed as % of Total Employed Population 2024
Chart 20 Index of Economic Freedom: Labour Pillar Rank in Ethiopia and Regional Comparison 2019-2024
Chart 21 Wage per Hour in Manufacturing Sector 2019-2024
Chart 22 Labour Market Regulations in Ethiopia and Regional Comparison 2024
Chart 23 Key Infrastructure Indicators 2024
Chart 24 Index of Economic Freedom: Trade Freedom Pillar Rank in Ethiopia and Regional Comparison 2019-2024
Chart 25 Ethiopia’s Top Four Largest Export Categories 2019-2024
Chart 26 Turnover of Transport and Storage Industry by Category in Ethiopia 2024
Chart 27 Transportation Mode Indicators in Ethiopia and Regional Comparison 2024
Chart 28 Road Infrastructure 2024
Chart 29 Innovation and Digitalisation Key Indicators 2024
Chart 30 Network Readiness Ranking by Pillar in Ethiopia and Regional Comparison 2024
Chart 31 Network Readiness Ranking for Ethiopia and Regional Comparison 2019-2024
Chart 32 Network Readiness Ranking: Technology Pillar for Ethiopia and Regional Comparison 2019-2024
Chart 33 Intellectual Property: Ethiopia Compared to Selected Regional Peers 2024
The 2024 Index of Economic Freedom
The Network Readiness Index (NRI) 2024
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