Ethiopia Turns to Property Ownership Incentives to Attract Foreign Investors

Ethiopia’s upcoming shift in foreign property ownership is a crucial component of Prime Minister Abiy Ahmed’s broader economic reform plan to liberalize key sectors of the nation’s economy. This policy serves both long-term and short-term objectives, with the government hoping that permitting foreign ownership may attract more international investment to Ethiopia, increase tax revenue, and spur competition in the local real estate market.

Local property developer Solomon Assefa sees the potential advantages of this policy, stating that it could bring much-needed foreign exchange into the economy. However, he acknowledges that Ethiopia may not be as appealing to foreigners seeking property as other destinations like Dubai due to its high political instability and lack of infrastructure. Nevertheless, Assefa believes that Ethiopia’s low labor costs and subsidized electricity offered by the state could make it an attractive option for foreign investors.

In support of foreign investment, the government has allocated prime city-center plots for the construction of luxury apartments in Addis Ababa. Over the past year, property developers have been granted access to land throughout the capital, with agreements requiring them to reserve 30% of new housing units for public-private partnerships with the state. The finance ministry announced plans in January to construct over 78,000 affordable housing units in Addis Ababa through international tenders. The government aims to raise funds through auctions, leading to widespread demolitions in the capital to make way for these developments. However, this may come at a cost to Ethiopians who are evicted from their homes to accommodate the new properties.

The impending change in foreign property ownership is a significant shift that forms part of Abiy’s broader economic reform agenda to liberalize key sectors of Ethiopian economy. This policy is not only a long-term strategy but also a measure to address short-term issues.

Many see the potential benefits of this policy, with local property developer Solomon Assefa stating that it could bring much-needed foreign exchange into the economy.

However, he recognizes that Ethiopia may not be as attractive

By Samantha Johnson

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