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Ethiopia - Legal Aspects of Doing Business in Africa - Second Edition
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Originally from:
Legal Aspects of Doing Business in Africa - Second Edition - Looseleaf
Legal Aspects of Doing Business in Africa - Second Edition - Digital
Ethiopia
Fisseha Bayih
Fisseha Bayih Law Firm
Addis Ababa, Ethiopia
Introduction
Before the eruption of the 1974 revolution, there had existed an ‘Open Door’ economic
policy towards foreign investment in Ethiopia. And it was in line with this policy that the
then Ethiopian Government had promulgated the investment proclamation in 1966 to
attract foreigners to invest their capital.
However, the declaration of socialism as the guiding state principle of Ethiopia, on
20 December 1974, and the subsequent legislation issued on the basis of the new economic
policy, have drastically paralyzed the ‘Open Door’ economic policy for foreign
capital investment and has consequently made doing business in Ethiopia very difficult, if
not completely impossible.
On the other hand, the public sector, which inherited all of the nationalized important
economic sectors and on which the development hope greatly hinges, proved to be unsuccessful
in carrying out the charted economic development plans which were made to
depend on anticipated foreign aid and loan. Thus comes the desperate need to more softening
the country’s economic policy so as to attract foreign capital and know-how.
With this development aim in view, the Government, following the experience of East
European socialist countries, had promulgated six years ago the Joint Venture Establishment
Proclamation Number 235/1983.
Nevertheless, the Government, having been inclined even more toward softening the
country’s economic policy than has been the case before and having been aware of the
problems encountered during the implementation of the aforementioned joint venture
law, has promulgated a new law known as Joint Venture Proclamation Number 32/1989,
replacing and repealing the previous one. In this connection, it is important to note that the
government has also promulgated other laws and regulations which create appropriate
legal conditions so as to enhance extensive participation of private investors both domestic
and foreign in the development of the country’s economy.SmallScale IndustryDevelopment
ProclamationNumber 30/1989 andHotel ServicesDevelopment Proclamation Number
31/1989 are the new legislation recently promulgated.
Fisseha Bayih
Fisseha Bayih Law Firm
Addis Ababa, Ethiopia
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