Ethiopia’s Council of Ministers has ratified a draft law that will define how foreigners can own real estate, as the country reforms its laws to encourage foreign investment.

Ethiopia has been progressively opening up its economy to foreign direct investment. This has included ending Ethio Telecom’s monopoly by granting a license to Safaricom, and moves to allow foreigners into its banking sector. It has also set up a stock market, and licensed investment banks and securities dealers.

Focus will now likely shift to the details of the new law, as Ethiopia has previously tried to balance national interests with its liberalisation agenda. Its law opening up the banking sector, for example, limits how much of a bank’s total shares foreign investors can own. While it allows foreign nationals to work as senior bank executives, it also mandates that resident Ethiopians be included in their boards.

Concerns remain about the country’s risk profile, with some enterprises finding it difficult to continue operations due to political instability and multilayered conflicts. For example, a few flower farms have shifted operations to Kenya and Uganda, as conflict in Amhara has created logistical hurdles.

The proclamations will now be forwarded to the country’s parliament for approval.