In relation to the rapid economic growth and various investment policy reforms, the number and type of FDI inflows to Ethiopia has been increasing. During the GTP I period, net foreign direct investment inflow increased from USD 1.2 billion in 2010/11 to USD 2 billion by 2014/15. Overall, a total of USD 7.2 billion net foreign direct investment inflows has been registered over the five years of GTP I period. Although the flow of FDI has been increasing in Ethiopia; there are several issues, prospects, and challenges that have been mentioned by the investors.

AACCSA commissioned a study that aimed at undertaking an empirical analysis of FDI in Ethiopia with the purpose of forwarding recommendations that could improve the business environment for enhanced trade and investment. The study focuses on analyzing the trend, ownership sectoral and regional distribution as well as the employment and other macroeconomic contribution of FDI in Ethiopia.

To reach the stated objectives we used both secondary and primary data. Primary data is collected from supporting institutions through key informant interviews and from a sample of foreign investors using questionnaires. DAB also use a desk review of a range of relevant literature and data collected from UNCTAD, ADI, WDI, MOFEC and CSA reports for our descriptive and time series econometric analysis