Ethiopia’s Home-Grown Economic Reform Agenda: A Brief Overview

Introduction

Ethiopia launched the Home-Grown Economic Reform (HGER) agenda in 2019 to address major economic and structural challenges. The reform seeks to shift the country from a public investment–driven model to a private sector–led economy grounded in productivity, innovation, and inclusivity.

A key part of the reform agenda is improving Ethiopia’s investment climate. This overview provides a brief look at Phases I and II of the framework and highlights the investment opportunities emerging from them. It identifies key sectors where trade and investment cooperation with partners can be strengthened.

Home-grown Economic Reform Agenda: Phase I and II

The framework is driven by three core objectives that form the foundation of Ethiopia’s economic transformation. These include achieving macroeconomic stability, enhancing market development and productivity, and accelerating inclusive growth. The strategic pillars of Phase II of the HGER agenda include stabilizing the macroeconomic and financial environment, promoting private sector–led growth, unlocking productive potential, and strengthening institutions. A key aspect of implementation is stronger engagement with partners, with an emphasis on expanding trade and investment partnerships and building alliances based on mutual interests and shared prosperity. These efforts aim to enhance Ethiopia’s integration into the global economy and strengthen economic cooperation with international partners.

Invest in Ethiopia

Ethiopia offers abundant investment opportunities, particularly in mining, energy, agriculture, manufacturing, tourism, and information communications technology. Ethiopia is actively working to ease both tariff and non-tariff barriers to international trade, a measure that will strengthen external competitiveness and enable the export sector to fully benefit from broader macroeconomic, structural, and sectoral reforms. These sectoral reforms are designed to address market failures, remove regulatory and investment constraints, and create an environment that promotes investment across key sectors. By addressing these challenges and improving the business environment, Ethiopia aims to unleash new growth potentials, attract more investment, and ensure that identified sectors reach their full productive capacity. This comprehensive approach highlights that Ethiopia is not only open for business but is committed to creating conditions that encourage sustainable investment and long-term economic growth.

Sector Specific Investment Opportunities

Mining

Ethiopia has vast and diverse mineral resources, including gold, platinum, copper, multi-color marble and granite, cement raw minerals, potash, gemstones, as well as coal, oil and natural gas. New reform measures aim to expand mining to minerals that are proven to be commercially viable. Concerted effort is being made to improve the policy and regulatory framework, boost investment promotion efforts and enhance stakeholder engagement in sector governance. Key reform measures in the sector include, developing policies and institutional capacities to create a sustainable and inclusive mining sector, strengthening geological information accessibility and promotion of the sector, enhancing local community engagement, and reducing incentives for contraband trade.

Energy

Ethiopia has substantial hydropower, wind, geothermal, and solar energy potential. With growing demand and recent regulatory reforms, the country’s renewable energy sector is becoming an increasingly attractive destination for business investment. Current energy-sector development efforts focus on encouraging private and foreign investment in renewable projects—including solar, wind, and hydropower—to expand energy supply and meet rising demand.

The reform agenda will also enhance public–private partnerships for energy generation, distribution, and infrastructure development, while creating regulatory frameworks that ensure a competitive and sustainable energy market. Strengthening the regulatory framework of the Ethiopian Energy Authority (EEA) to enable the development of transparent and effective rules and standards that promote performance and investment in the sector is a key priority. With the envisioned increase in private sector engagement, the regulatory body will be further reinforced to ensure a conducive and competitive business environment.

Agriculture

The reform agenda focuses on modernizing the agricultural sector through technology adoption, irrigation development, and improved market access. This is expected to ensure increased productivity and build resilience to climate shocks and other challenges. This modernization includes adopting new technologies, improving irrigation systems, expanding market access for farmers, and attracting large-scale agribusiness investors to develop commercial farms that can significantly boost Ethiopia’s food security and export base.

Manufacturing

Manufacturing is a strategic sector for Ethiopia that is crucial for driving industrialization, creating jobs, and expanding exports. The ongoing reforms to the sector, including targeted investments, improved value chains, and trade facilitation are strengthening the sector, enabling Ethiopia to move from a regional leader to a continental hub for industrialization in Africa. Industrial development efforts, including the advancement of manufacturing activities and the development of industrial parks, are designed to attract both domestic and foreign investors, enhance productivity, and provide a competitive environment that supports sustainable economic growth. This combination of growth potential, supportive policies, and infrastructure development makes Ethiopia’s manufacturing sector highly attractive for investment.

Tourism and ICT

Tourism and ICT are priority growth sectors in Ethiopia, leveraging the country’s rich cultural heritage, diverse natural attractions, and expanding digital infrastructure to boost innovation, connectivity, and global competitiveness. Ethiopia has substantial tourism potential, with abundant cultural, historical, and natural resources that can be developed into productive economic assets.

Efforts are underway to upgrade tourism infrastructure, attract domestic and international private investment, and strengthen market linkages. The development of natural sites—showcasing Ethiopia’s cultural heritage, historical landmarks, and unique landscapes—is helping increase tourism revenue and position the country as a premier global destination. Ethiopia is also investing in sustainable tourism infrastructure across its 12 UNESCO World Heritage Sites.

Conclusion

Ethiopia’s Home-Grown Economic Reform is a comprehensive strategy to transform the country into a resilient, private sector–led, and inclusive economy. By consolidating macroeconomic stability, promoting market-driven growth, and prioritizing equitable development, the reforms address structural challenges while creating a foundation for long-term prosperity. Through fiscal discipline, regulatory reforms, and strengthened institutions, Ethiopia is building an environment that encourages investment, enhances productivity, and fosters sustainable development across all regions.

The reform agenda highlights Ethiopia’s significant investment opportunities across key sectors, including mining, energy, agriculture, manufacturing, tourism, and ICT. By simplifying business regulations, expanding market access, and supporting public–private partnerships, the country is actively creating conditions for domestic and foreign investors to thrive. These efforts, combined with initiatives to ensure inclusive growth and environmental sustainability, position Ethiopia as a competitive and attractive destination for long-term investment and economic cooperation in Africa and beyond.