Ethiopia Opens Freight Forwarding Sector to 100% Foreign Ownership to Boost Trade Efficiency and Investment
Ethiopia has removed long-standing restrictions on foreign participation in freight forwarding, allowing 100% foreign ownership in a major liberalization move aimed at improving logistics efficiency and attracting investment into its trade infrastructure.
The reform, approved by the Ethiopian Investment Board under the Ethiopian Investment Commission, abolishes previous rules that limited foreign equity to 49% and required joint ventures with local firms.
Freight forwarding is central to Ethiopia’s trade system, managing customs clearance, cargo handling and inland transport along the Djibouti corridor, through which more than 90% of the country’s imports and exports pass.
Despite its strategic importance, Ethiopia’s logistics sector has long been hampered by high costs and inefficiencies.
International assessments, including from the World Bank, have consistently highlighted elevated logistics costs in landlocked African economies, often reaching 30–40% of product value in certain supply chains.
In Ethiopia, exporters have faced delays at ports, fragmented logistics services and limited digital integration across the supply chain, affecting competitiveness in agriculture and manufacturing.
Previously, freight forwarding was tightly regulated under Investment Regulation No. 474/2020, reflecting government concerns over strategic control of trade facilitation and customs-related services.
Earlier reforms allowed limited foreign participation through joint ventures, but the new policy fully removes these restrictions.
The Ethiopian Investment Commission said the change is part of broader efforts to modernize the investment climate, attract capital into key sectors and address structural bottlenecks in trade and logistics.
Ethiopia has in recent years also opened wholesale and parts of retail trade to foreign investors, alongside easing import-export participation, marking a gradual but significant shift toward a more liberalized commercial sector.
