April 22, 2024 12:08 am
Ethiopia Turns to Property Ownership Incentives to Attract Foreign Investors

Ethiopia is set to undergo a significant shift in foreign property ownership as part of Prime Minister Abiy Ahmed’s broader economic reform agenda. This policy, which is both a long-term strategy and a measure to address short-term issues, aims to liberalize key sectors of the country’s economy.

The government believes that allowing foreign property ownership will attract more international investment to Ethiopia, increase tax revenue, and stimulate competition to revitalize the local real estate market. 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, Assefa also recognizes that Ethiopia may not be as attractive to foreigners seeking property compared to other destinations like Dubai. The country’s appeal to foreign investors may lie in its low labor costs and subsidized electricity offered by the state.

To support 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.

In January, the finance ministry announced plans to construct over 78,000 affordable housing units in Addis Ababa through international tenders. The government aims to raise funds through auctions, leading to widescale demolitions in the capital to make way for these developments. However, this may come at a cost to Ethiopians who are evicted to accommodate the new properties, highlighting the challenges that may arise as the policy is implemented.

Overall, this policy represents a significant shift in Ethiopia’s approach towards liberalizing its economy and attracting more foreign investment. While there are potential benefits associated with this policy

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