Italy Plans Major Investment in Ethiopia: Opportunities for Growth

Addis Ababa, November 15, 2025 – Italy is set to embark on a significant investment initiative in Ethiopia, with keen interest from Italian businesses amidst a favorable investment climate established by the Ethiopian government. This move is aimed at strengthening bilateral trade relations and harnessing the untapped potential of both nations.

The Current Trade Landscape

In a recent interview, Italian Trade Commissioner Claudio Pasqualucci emphasized that despite the rich history and diplomatic ties between Italy and Ethiopia, bilateral trade remains surprisingly low. He noted, “As we speak now in November 2025, the bilateral trade is very low, considering the opportunities and the potential within the two countries.” This indicates significant room for growth in mutual trade partnerships.

Strategic Goals and Priorities

Italy’s ambition is clear: to elevate the volume of exports and strategically import key products from Ethiopia. Pasqualucci highlighted that coffee and essential materials from the mining sector are among the primary focus areas for enhancing trade collaboration.

“Our goal is to increase our volume of exports and also increase certain strategic imports from Ethiopia to Italy,” he stated.

Investment Plans and Industrial Collaboration

Pasqualucci confirmed that Italy is serious about its investment agenda in Ethiopia, citing ongoing discussions with Ethiopian authorities aimed at catalyzing Italian investments. Notably, Ethiopia has been designated as a primary destination within Italy’s expansive investment strategy.

The plan includes developing industrial parks that will allow Italian companies to establish joint ventures with local businesses.

“There is a big project on social housing. They (the investors) were discussing where Italian companies can work with local companies. So, I think it is a path. But it started very well,” Pasqualucci added.

Prospects for Growth

The future appears promising for both nations. While acknowledging the current trade deficits, Pasqualucci expressed optimism about improving bilateral relations. He stated that both countries have robust potential that remains largely untapped.

Ethiopia has been earning recognition as one of Africa’s largest and fastest-growing economies. This transformation is largely attributed to the government’s comprehensive Homegrown Economic Reform Agenda, which aims to revitalize the economy.

Economic Reforms and Achievements

Ethiopia’s recent economic reforms have yielded impressive results, including:

• Increased Economic Growth: The reforms have spurred GDP growth at record rates.
• Rising Export Revenues: Significant increases in export income have been reported.
• Declining Inflation: Efforts to stabilize the economy have led to lower inflation rates.

Other accomplishments include substantial job creation and improved foreign exchange earnings, demonstrating Ethiopia’s transition towards a more sustainable economic model.

Conclusion

The partnership between Italy and Ethiopia holds significant promise for both nations, presenting opportunities for mutual progress in trade and investment. By enhancing commercial ties and leveraging each other’s strengths, Italy and Ethiopia can pave the way for a prosperous future together. As discussions continue and collaborations grow, stakeholders from both countries remain optimistic about what lies ahead.

For more on investment opportunities and economic reforms in Ethiopia, visit UNCTAD and World Bank.