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28 October 2015
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Like most of the world, Ethiopia is actively competing for foreign direct investment (FDI). Any fair observer has to admit that Ethiopia has done much over the last several years to improve itself as an attractive location for someone to relocate a factory, open a company or in general invest.

Still, Ethiopia’s business environment remains a critical constraint to the private sector development and sustained growth. Starting a business in Ethiopia is significantly tougher in terms of procedures required, duration and cost compared to Tanzania, Mozambique, Malaysia and Vietnam. Higher startup barriers in Ethiopia slow entrepreneurs and businesses to quickly put their resources to productive uses. The need to re-invigorate the country’s environment for private sector investment and doing businesses generally should therefore be enhanced.
No doubt Ethiopia wants to be more competitive and be able to survive competition from foreign firms when its market is more open to international trade. Many in Ethiopia's business world are hoping that today’s visit from President Obama will signal the beginning of a prosperous relationship with the US. There is hope that US investment in Ethiopia will rise to lift significantly its export to the US from the current paltry $190-200 million or so. The two governments can further solidify recent progress in political and security cooperation by hammering out a joint vision statement on the future direction of the partnership and the wider region.
Overall, this visit represents a critical opportunity for the United States and Africa to add more strategic meaning to their existing cooperation. The Obama visit to Kenya and Ethiopia should reinvigorate the message that the United States is serious about making trade and investment the foundation of its engagement in Africa.

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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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