In a groundbreaking move, Ethiopia has decided to open its real estate market to international investors. Announced by Prime Minister Abiy Ahmed on 23 March, this change ends a long-standing restriction on foreign property ownership. It’s a key part of Ethiopian government’s plan to invigorate the economy through liberalisation and foreign investment, a focus since its 2018 election win.

Historically, Ethiopia’s approach to foreign property ownership was cautious, rooted in its past socialist revolution and subsequent control by an authoritarian regime. This was further influenced by its status as one of the few African nations that remained uncolonised, leading to a guarded stance on foreign economic participation.

In recent years, Ethiopia has sought to open its economy, encouraging foreign investments in sectors like telecoms and banking. However, facing challenges such as dwindling foreign currency reserves, surging inflation, and regional conflicts, Ethiopia is pressed for more radical economic reforms.

Allowing foreign real estate ownership aims to boost direct foreign investment, enhance tax revenues, and invigorate the local property market. However, this development has sparked concerns over the displacement of current residents.

The success of this policy, critics say, hinges on Ethiopia’s political stability and its respect for human and property rights. Oromia, the country’s largest region, is set to lead in property development, with the ambitious Sheger City project, including a new airport, showcasing Ethiopia’s infrastructural ambitions by 2027.