Foreign Direct Investment (FDI) Outlook in Ethiopia: An Evidence from Oromia Region Selected Special Zones

Abstract

The study examined the Foreign direct Investment (FDI) outlook in Ethiopia; an evidence taken from Oromia Region, Special Zones. Ethiopia, one of the fastest growing economy in the world, projected to join the lowermiddle income countries by 2025, is keep transforming all sectors for better performance and is running a mega projects. In addition to the internal operations, foreign direct investment (FDI) is a catalyst for the economy. Recurrently, the country is keep promoting investment opportunities and signing bilateral agreements to ease trade and investment and remove double taxation with different countries. The economic stability, geographical location, inexpensive and sufficient labour, growing local market are the leading factors to invest in Ethiopia. Trade regulations & custom clearances, limited infrastructure, limited access to foreign exchange & local finance, restriction of preferred business sectors some obstacles of foreign investment in Ethiopia. To improve on the inflow of foreign direct investment (FDI), Government should therefore invest more in infrastructure and Improving policy and regulatory environment, tax reforms, investors’ tax friendly tax and legal systems, removal of capital controls are essential to FDI attraction and contribution to growth in the economy