Ethiopia's Council of Ministers has passed a draft law rescinding the country's long-standing ban on foreign nationals or companies owning "immovable property," a significant move towards establishing firm property rights that officials hope will unlock greater flows of foreign direct investment.
Non-Ethiopian individuals and businesses have been banned from owning property, whether for personal or commercial use, since the country's communist revolution of 1974. Since then, property rights have been a sensitive political issue in Ethiopia, with many voters seeing national sovereignty as bound up with land ownership.
Nonetheless, since the election of Prime Minister Abiy Ahmed in 2018, the Ethiopian government has been pursuing a wide range of measures designed to open up the economy to foreign investment and promote stronger growth. Now, subject to parliamentary approval, land and property reform will be the latest liberalising measure.
The Council has argued that the legislation, if passed, would help stimulate greater foreign capital investment, increase affordable housing development, and generate more employment opportunities for Ethiopians in real estate and associated sectors.
At least in theory, higher capital inflows from opening up sectors such as real estate would also help boost Ethiopia's access to hard foreign currency, driving up its foreign reserves and stabilising its currency.