Land for Investment in Ethiopia

By Dagnachew Tesfaye, Managing Partner at DMLF

One of the most important aspects of an investment is the provision and availability of land for investment purposes. The right of ownership of rural and urban land and all natural resources is exclusively vested in the State and the peoples of Ethiopia, says Article 40(3) of the FDRE Constitution of Ethiopia.

Article 44 of the Investment Proclamation No 1180/2020 establishes the Federal Government and Regional State Administration Investment Council( the Council). Sub-Article 4 of Article 45 tasked the Council with powers to render decisions or put forward recommendations among others on the allocation of land for investment. The FDRE Prime Minister or in his absence the Deputy Prime Minister heads the council. 

Similarly the Investment Regulation No 474/2020 Article 18(5) enforces the Federal and Regional investment organs to a duty to provide support to requests of investors among others on the investors request to obtain land. In the previous Investment Proclamation No 769/2012 on Article 30 under one-stop shop services, the Ethiopian Investment Agency  was the one that took the obligation to provide and answer investors’ requests for land required for their investment projects.

Land is made available for investment on lease-hold and rental basis. Lease right for urban and rental rural land is assigned to investors for up to 80 years. The duration of the lease hold depends on the location and economic sector. Urban Land Leasehold Proclamation No 721/2011 and FDRE Rural Land Administration and Land Use Proclamation No 456/2006 and respective regional laws (Oromia Proc.130/2007, Amhara Proc.No 133/2006 and Tigray Region Proc.No. 136/2007) govern the administration of land in Ethiopia. 

On the other hand, Industrial Park Enterprise makes available developed land as subletting. The investor either can construct own production facility inside the industrial park or the investor can rent or buy factory sheds from the Industrial Park Developer. The Industrial Park Proclamation No 886/2015 and Industrial Park Regulation No 417/2017 regulate the activities of industrial parks.

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