Ethiopia Offers Currency Repatriation Guarantees to Attract Saudi Investment

In a bid to lure Saudi investors, Ethiopia's National Bank Governor, Mamo Mihretu, pledged preferential treatment, including guarantees for repatriating profits in foreign currency. This pledge comes amid chronic foreign currency shortages in Ethiopia, which often force foreign investors to wait over a year to get their money out.

The Governor made the announcement during a meeting with a delegation of 79 Saudi investors and Chamber of Commerce representatives in Addis Ababa. He acknowledged the currency challenges, but offered offshore accounts as an interim solution and promised “fundamental changes” to Ethiopia’s foreign exchange regime “very soon.” Details on the planned reforms remain unclear, but sources suggest a devaluation of the Ethiopian birr is on the table.

This preferential treatment for Saudi investors marks a shift for Ethiopia. Previously, such guarantees for repatriation have rarely been extended, despite being permitted by investment legislation.

The Governor also highlighted the recent draft legislation that would allow foreign investment in the Ethiopian financial sector, potentially opening doors for Saudi banks to enter the market.

The Ethiopian government seems keen to capitalize on Saudi interest. Planning and Development Minister Fitsum Assefa noted there are already around 200 Saudi investors in Ethiopia, with many expressing interest in agriculture, textiles, and garments.

The Ethiopian Investment Commission head, Hanna Arayaselassie, also addressed the delegation, paving the way for further discussions and potentially a new wave of Saudi investment in Ethiopia.

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