For most Ethiopian customers, price is the most important factor in purchasing. Durability is seen by few as an important purchasing factor. Given the sensitivity to price, businesses often depend on low cost imported goods and high turnover. However, for capital/durable items, buyers tend to prefer reliable, quality equipment, with dependable after-sales service. Presenting sales materials in the official local language, Amharic, in addition to English, is an effective way to reach a broader customer base. English is prevalent in the business community.
Trade Promotion & Advertising
Advertising and trade promotion are important in the Ethiopian market. Government-owned mass media outlets (radio, television, and newspapers) and privately-owned magazines, satellite television stations, newspapers, radio stations, and billboards are the major means of advertising. Annually, the Addis Ababa Chamber of Commerce organizes several international trade fairs in Ethiopia. These events attract many Chinese, Indian, Middle Eastern, European, and local exhibitors.
United States companies can contact the U.S. Foreign Commercial Service Addis Ababa office for a Single Company Promotion (SCP) service to brand their company’s products and services.
Please refer to the following list for more information. This list is not comprehensive, and inclusion does not constitute an endorsement or recommendation by the U.S. government.
Chambers of Commerce
- American Chamber of Commerce Ethiopia (amchamethiopia.org)
- Addis Ababa Chamber of Commerce
- Ethiopian Chamber of Commerce and Sectoral Associations (ethchamb@ethionet.et)
Advertising agencies
- B.T. Digital Advert (btta@ethionet.et)
- Champion Communication Cactus Advertising (cactusplc@ethionet.et)
- Flawless Events (info@flawlessevents.net)
- I 251 Communication (info@251communications.com)
- Zeleman Productions (info@zelemanproductions.com)
Newspapers
- Addis Business (aachamber1@ethionet.et)
- Addis Zemen (info@ethpress.gov.et)
- Capital (syscom@ethionet.et)
- Ethiopian Business Review Magazine (info@ethiopianbusinessreview.net)
- Addis Fortune (tamrat@addisfortune.com)
- New Business Ethiopia (contactus@newbusinessethiopia.com)
- Press Digest (Phoenix.Universal@t.ethionet.et)
- The Daily Monitor (themonitor@ethionet.et)
- The Ethiopian Herald (et.press@ethionet.et) The Reporter (mcc@ethionet.et)
Pricing
Commercial imports are subject to up to five separate import taxes, which are all collected by the Ethiopian Customs Commission (ECC). These taxes are charged in a compounding, sequential order as follows: customs duty, excise tax, value added tax, surtax, and withholding tax (not compounding). All taxes are payable at the time of import.
Custom duties range from 0% to 35% and are levied on CIF (cost, freight and insurance) price applied based on Harmonized System (HS) tariff codes. The calculation of the total customs duty is based on the CIF (Cost + insurance + freight) of the imported good.
An excise tax is imposed on products deemed to be luxury items or other products with inelastic demand. This tax is product dependent and ranges between 10% for textiles and most other goods to 100% for alcoholic beverages. The excise tax is applied to specified classes of products identified by ECC (see table below).
| Table: List of Items Liable for Excise Tax | |
| All types of pure alcohol | Any type of sugar in solid form excluding molasses |
| Tobacco and tobacco products | Drinks |
| Fuel super benzene, regular benzene, petrol, gasoline, in addition to other motor spirits | Perfumes and toilet waters |
| Textile and textile products | Garments |
| Personal adornment made of gold, silver or other materials | Disk washing machines of a kind for domestic use |
| Video decks | Television and video cameras |
| Television broadcast receivers | Motor passenger cars, station wagons, utility cars, land rovers, jeeps, pickups as well as similar vehicles |
| Carpets | Asbestos and asbestos products |
| Clocks as well as watches | Dolls and toys |
The value added tax (VAT) is a flat 15% tax on all imports, unless otherwise exempted. Exempted sectors include financial services, educational services, healthcare, and transportation services.
The surtax is a flat tax of 10% on all imports, with exceptions for fertilizer, petroleum, investment goods, raw materials, and some medicines.
The withholding tax is a flat tax of 3% on the CIF price of all imports, unless otherwise exempted. A withholding tax may be offset against qualified business income taxes.
The Ethiopian Customs Commission (ECC) was restructured in 2019. According to the new structure, the Ministry of Revenue is the highest authority with oversight over customs issues. The ECC operates now under the Ministry of Revenue and is led by a commissioner.
ECC has developed an import tax calculator to assist traders in determining the applicable taxes for their products. The calculator requires entry of the following information: six or eight-digit Harmonized Tariff Schedule (HTS) code, cost of the imported item, freight, and insurance, as well as any other cost. The HTS code along with the associated import taxes can be found on the ECC’s website (https://customs.erca.gov.et).
The GOE sets prices for local transportation fares, petroleum, and fertilizer; with periodic reviews on the prices to reflect prevailing local market situation.
Prices of locally produced products have increased significantly in recent years. The relative prices of imported goods are also high, due to inflation, customs duties, transportation costs, and a steady devaluation of the local currency, (birr) against the U.S. dollar. For more information on customs, please refer to the Ministry of Revenue website.
Sales Service/Customer Support
Sales service is available for most products, but customer service levels are poor in comparison to international standards. Service providers that rely on imported parts often face delays in obtaining the foreign exchange to purchase these goods. Consumer protection associations that operate in Ethiopia have weak enforcement capacity.
Local Professional Services
The following list includes companies that render general professional services (see Web Resources section below for website and email links).
Legal Services
A list of attorneys can be found on the US embassy’s website. Note that this list is not comprehensive and inclusion does not constitute an endorsement or recommendation by the U.S. government.
Banking and Finance
Ethiopia’s commercial banks include Abay Bank, Addis International Bank, Amhara Bank, Awash International Bank, Bank of Abyssinia, Berhan International Bank, Bunna International Bank, Commercial Bank of Ethiopia, Construction and Business Bank, Cooperative Bank of Oromia, Dashen Bank, Development Bank of Ethiopia, Enat Bank, Lion International Bank, Nib International Bank, Oromia International Bank, Tseday Bank, United Bank, Wegagen Bank, and Zemen Bank.
Hotels and Meeting Facilities
Ethiopia has a number of hotels that meet international standards operating in Addis Ababa, including: Capital Hotel and Spa, eLilly Hotel, Ghion Hotel, Golden Tulip Hotel, Harmony Hotel, Hilton Addis Ababa, Best Western, Hyatt Regency Hotel, Jupiter Hotel, Marriott Executives Apartment, Radisson Blu, Ramada Addis, and Sheraton Addis Ababa.
Tour Operators
Several tour operators serve the country, including: Abyssinian Tours, Ethiopia Travel, Ethiopian Rift Valley Safaris, Experience Ethiopia Travel, GETTS Travel, and Travel Ethiopia.
Other
Other entities that work with international companies doing business in Ethiopia include:
- American Chamber of Commerce in Ethiopia
- Association of Ethiopian Microfinance Institutions
- Construction Contractors Association of Ethiopia
- Deloitte Ethiopia
- Encore Employment Training Services
- Ernst & Young
- Ethio-Jobs
- Ethiopian Bar Association
- Ethiopian Cotton Producers and Ginners Association
- Ethiopian Business Development Services Network
- Ethiopian Economics Association
- Ethiopian Horticulture Producer Exporters Association
- Ethiopian Information Technology Professional Association
- Ethiopian Leather Industries Association
- Ethiopian Medical Association
- Gazebo International
- Grant Thornton Ethiopia
- HST Consulting
- Precise Consult International
Principal Business Associations
AnchorAnchorAnchorEthiopia has a fully registered American Chamber of Commerce (AmCham) via a cooperative agreement with the Ethiopian Investment Commission, signed in 2016. This agreement allowed the AmCham to formally form a registered AmCham in Ethiopia. As of August 2023, AmCham consists of 70 active members. The AmCham serves as an effective resource for U.S. companies wishing to do business in Ethiopia. In addition, local chambers of commerce and the U.S. Foreign Commercial Service are initial points of contact for U.S. companies wishing to partner with a local agent and do business in Ethiopia.
AnchorAnchorAnchorOther business associations include:
- Ethiopian Chamber of Commerce and Sectoral Association
- Addis Ababa Chamber of Commerce and Sectorial Association
- Ethiopian Entrepreneurs Association
- Ethiopian Women Entrepreneurs Association
- Addis Ababa Women Entrepreneurs Association
- Ethiopian Coffee Exporters Association
- Ethiopian Bankers Association.
All these business associations share a similar goal of promoting trade. Ethiopian business associations look favorably on U.S. companies and are interested in working with them to attract U.S. trade and investment to Ethiopia.
Limitations on Selling U.S. Products and Services
The investment and business environment in Ethiopia has considerable limitations and market challenges. Major challenges are shortage of foreign currency, lack of finance, high logistics costs, bureaucratic approval procedures and slow decision-making. Other challenges include unreliable internet connectivity and power supply and closed service sectors such as the financial and insurance sectors. U.S. companies interested in selling their products and services in this market will generally need to bring their own financing and have patience to obtain payment from buyers.