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Country Commercial Guides for FY 2000: Ethiopia Report prepared by U.S. Embassy Addis Ababa, released July, 1999 Note*

CHAPTER IV. MARKETING U.S. PRODUCTS AND SERVICES

A. DISTRIBUTION AND SALES CHANNELS:

Ethiopia requires that all imports be channeled through Ethiopian nationals registered with the government as official import or distribution agents. The importer or agent is required to apply for an import license with the Ministry of Trade and Industry and with the Controller of Exchange of the National Bank of Ethiopia to obtain access to foreign exchange.

B. INFORMATION ON TYPICAL PRODUCT PRICING STRUCTURES

All transactions in Ethiopia are conducted in the local currency, the "birr." Prices are generally very low for locally produced products while import prices reflect the high cost of transportation.

C. USE OF AGENTS AND DISTRIBUTORS; FINDING A PARTNER:

In Ethiopia it is not difficult to find experienced and reputable agents and distributors. To conduct business effectively and participate in local tenders, it is advisable for U.S. firms to appoint local agents to represent their products in Ethiopia. The Embassy maintains a list of experienced local representatives interested and able to assist U.S. companies in bids on major projects.

D. FRANCHISING:

Even with the relaxation in rules governing the convertibility and repatriation of Ethiopia's currency, product quality control, banking regulations, and continuing foreign exchange convertibility issues make franchising difficult. Currently, there are no U.S. franchises operating in the country.

E. DIRECT MARKETING:

Limitations on foreign exchange and the reservation of import and export services to nationals makes direct marketing difficult.

F. JOINT VENTURES/LICENSING:

Foreign investment inflows through joint ventures are promoted and encouraged in Ethiopia. The following are the major criteria for the approval of joint venture proposals:

(A) Transfer, absorption, and adaptation of needed technology and know-how into the country;

(B) Improvement of the country's foreign exchange position;

(C) Utilization and development of the country's resources, including the generation of local employment, and;

(D) Development of forward and backward linkages, and increased added value in various economic sectors.

G. STEPS TO ESTABLISHING AN OFFICE:

All importers and exporters must be registered with the Ministry of Trade and Industry and obtain a business license. Foreign investors are required to seek project approval and receive incentives from the Ethiopian Investment Authority. The Ministry of Trade and Industry regulates imports and exports. Foreign exchange permits are required for all imports.

H. SELLING FACTORS/TECHNIQUES:

Methods used by successful competitors in the Ethiopian market place include active contact with key officials responsible for various major programs and projects, personal visits by representatives for initial market surveys, and contact with local representatives knowledgeable about future plans and market potentials.

I. ADVERTISING AND TRADE PROMOTION:

Advertising and trade promotion are important in the Ethiopian market. The Government-owned mass media (radio, television, and newspapers) and privately-owned magazines and newspapers are the major means of advertising. In Ethiopia, radio and newspapers have a wider audience than television, which is very limited. Some of the major English-language newspapers and magazines include:

Ethiopian Herald
P.O. Box 30701  
Addis Ababa, Ethiopia
Tel:  251-1-123-879
251-1-112-041, 251-1-118-252  

The Monitor
P.O. Box 22588
Addis Ababa, Ethiopia
Tel:  251-1-156-400, 251-1-511-880
Fax:  251-1-518-409

Addis Tribune 
P.O. Box 2395
Addis Ababa, Ethiopia
Tel:  251-1-129-524, 251-1-118-613
Fax:  251-1-552-110

The Capital 
P.O. Box 259
Addis Ababa, Ethiopia
Tel:  251-1-185-100
Fax:  251-1-533-323

Ethiopian Trade Journal
Ethiopian Chamber of Commerce
P.O. Box 517
Addis Ababa, Ethiopia
Tel:  251-1-518-240
Fax:  251-1-517-699

Nigdna Limat
Addis Ababa Chamber of Commerce
P.O. Box 2458
Addis Ababa, Ethiopia
Tel:  251-1-518-055, 251-1-513-814
Fax:  251-1-511-479

Entrepreneur
P.O. Box 26845
Addis Ababa, Ethiopia
Tel:  251-1-128-584

J. PRICING PRODUCTS:

All retail prices except petroleum, fertilizers and pharmaceuticals have been decontrolled.

K. SALES SERVICE/CUSTOMER SUPPORT:

Sales service is obtainable for products in most sectors. Neither consumer advocacy or protection associations currently operate in Ethiopia.

L. SELLING TO THE GOVERNMENT:

Government purchases account for about 60 percent of total imports, with funds coming from project loans by international financial institutions such as the World Bank.

M. PROTECTING PRODUCTS FROM IPR INFRINGEMENT

Regulations for the registration of patents and copyrights do not exist in Ethiopia. Some protection can be secured through registration of trademarks at the Ministry of Trade and Industry and the publication of cautionary notices in local newspapers in Ethiopia. In mid-1999, the Ethiopian Parliament began discussing a proposed copyright law to address many aspects of intellectual property protection.

N. NEED FOR A LOCAL ATTORNEY

Most of the necessary commercial and investment procedures and licenses can be handled through a local business agent.

O. PERFORMING DUE DILIGENCE

Due diligence and project analysis are highly recommended, though Ethiopia's investment provisions to not yet accord full privileges for pre-investment research.