Industrial Policy & Trade Monitor· 2662 actions· ✨ 89 recent

Ethiopia's Council of Ministers adopted Regulation No. 586/2026 on 23 February 2026, published in the Federal Negarit Gazette No. 17 (Year 31), repealing in its entirety the prior Investment Incentives Regulation No. 517/2022. The regulation replaces the legacy 6-15 year corporate income tax holiday regime with a performance-based reduced-tax-rate architecture: 5% for SEZ developers and recognised startups (up to 10 years), 15% for priority sectors including manufacturing, renewable energy, agro-processing, mining value-addition, and technology (2-6 years by sector), and 25% for companies listing on the Ethiopian Securities Exchange. Incentive eligibility requires a minimum USD 10 million capital investment threshold for most priority sectors, and every beneficiary must sign a binding Performance Agreement with the Ethiopian Investment Commission committing to employment, capital-deployment, production, and export targets before incentives are activated — failure to meet targets results in suspension of all incentives with no grace period.

Ethiopia's Banking Business Proclamation No. 1360/2025, ratified by the House of Peoples' Representatives on 17 December 2024 and gazetted in March 2025, repeals Proclamation 592/2008 and opens Ethiopia's banking sector to foreign participation for the first time since the 1974 Derg-era nationalisations. Foreign banks may enter via subsidiary establishment, branch licensing, representative offices, or equity acquisition in existing domestic banks. A single strategic foreign investor is capped at 40% ownership per domestic bank, with aggregate foreign ownership across all investors capped at 49%. The reform positions Ethiopia — Africa's second-most-populous country — as a competitor to Nairobi, Lagos, and Johannesburg as an African banking centre, unlocking entry plans by Standard Bank, KCB Group, Equity Bank, ABSA, and GCC-based institutions.

The Ethiopian Capital Market Authority (ECMA) issued Directive No. 1009/2024 on 16 July 2024, establishing the comprehensive licensing, operational, and supervisory framework for securities exchanges, derivatives exchanges, and the over-the-counter (OTC) market under the authority of Article 108 of the Capital Market Proclamation No. 1248/2021. The directive consolidates Ethiopia's previously fragmented securities-trading architecture into a single, licensed, and regulated market structure and provided the statutory pathway for the Ethiopian Securities Exchange (ESX) to receive the country's first securities-exchange licence. This is the first capital-markets architecture filing for Ethiopia on the IPTM register, forming the operating- licence layer alongside the banking-sector liberalisation enacted under Proclamation 1360/2025.