The National Bank of Ethiopia (NBE) has implemented stricter rules for foreign investors looking to repatriate profits and dividends, in line with ongoing forex market reforms. These regulations aim to protect forex reserves and stabilize the local currency, amidst economic challenges like rising inflation and foreign currency shortages. Prime Minister Abiy Ahmed’s government seeks to attract more foreign investments while addressing past economic issues resulting from state control.
The new rules outlined in the Foreign Exchange Directive No. FXD/01/2024 prohibit Ethiopian nationals from owning foreign currency accounts abroad and set criteria for foreign investors to acquire external loans. Investors must provide tax receipts, board minutes, audited financial documents, and various licenses when repatriating funds. Strict guidelines ensure transparency and compliance with regulations, requiring approval from NBE for capital repatriation upon operation shutdown.
These measures also regulate foreign portfolio investments and limit ownership shares, emphasizing long-term commitments from investors. Additionally, individuals entering Ethiopia must convert foreign currency to the local currency within 30 days. The NBE’s comprehensive regulations aim to attract foreign investments while ensuring financial stability in Ethiopia’s evolving economy.
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