Current Market Trends
Capital: Addis Ababa Population: 102.4 million (2016)
GDP: 72.37 billion (2016)
Language: Amharic and others
The Government of Ethiopia (GOE) is working to strengthen the healthcare system to align it with the Millennium Development Goals of the country. Ethiopia has a large, predominantly rural, impoverished population with poor access to safe water, housing, sanitation, food and health services. The government has made significant investments in the public health sector, which has led to improvements in the health status of the population. Ethiopia is still one of the countries with a very high morbidity and mortality rate from a triple burden of diseases. Communicable diseases like HIV/AIDS, TB, malaria, respiratory infection, and diarrhea also remain a serious challenge in Ethiopia. High fertility rates, and low contraceptive prevalence continue to drive a rapidly increasing population in Ethiopia. With an increasing middle class, the GOE is facing an increase in non-infectious diseases such as cancer, diabetes, heart diseases, Hepatitis B&C and high blood pressure.
Under the second Growth and Transformation Plan (GTP II) and Health System Transformation Plan, the Ministry of Health (MOH) is planning to work on various aspects of the healthcare system. This program will encourage the introduction of new technology in the healthcare system. The government has increasingly decentralized management of its public health system to the Regional Health Bureau levels. The Food, Medicine and Health Care Administration and Control Authority (FMHACA) is being strengthened to provide increased regulatory oversight for the registration, importation and quality of medicines in the Ethiopian Market. The Pharmaceutical Fund and Supply Agency (PFSA) is tasked with procurement and distribution of medicines throughout the country. In the coming few years under GTP 2, further improvements will be made to further ensure proximity of PFSA distribution hubs to health facilities and to establish efficient systems for inventory, fleet and information management. These improvements are targeted to increase efficiencies and improve the availability of commodities throughout the public sector.
The following list is the 2020 impact-level targets for the Health System Transformation Plan (HSTP):
The health sector is one of the few sectors which is open for foreign competition, unlike other services such as banking and telecommunication. The country’s trade and investment policies and strategies aim at creating a competitive economy driven by the private sector. The policy also enables the government to regulate the services provided by the private health providers. Health and health-related services are not subject to discriminatory taxes on trade. In addition, the country has put in place different laws to regulate the healthcare market. Suggested market entryways which are recognized by Ethiopian Commercial Code of 1960 are ordinary partnerships, joint ventures, general partnerships, limited partnerships, Share Companies and private limited companies. The Government of Ethiopia requires all imports channel through Ethiopian Nationals registered as official import or distribution agents with the Ministry of Trade.
There are an estimated 3,691 private clinics and 334 privately-owned hospitals in the country. A total of 16,600 health posts are available in Ethiopia. There are also 246 pharmacies, 476 drug stores and 1,754 rural drug vendors in Ethiopia. The Government of Ethiopia has taken a proactive role to address health related challenges by increasing the health budget. The Government of Ethiopia is actively working on a Public-Private Partnership to tap into and make optimal use of available resources for healthcare and promote quality improvements on the part of the private sector. The major priority areas of the healthcare sector development program are maternal and newborn care, child health, and to halt and reverse the spread of major communicable disease such as HIV/AIDS, tuberculosis and Malaria. However, there is increasing focus on other communicable and non-communicable diseases such as cancer, heart diseases, high blood pressure, diabetes and others.
The major percentage of medical equipment and supplies are imported from India and China. However, there are some imports from European countries like Germany, United Kingdom and France.
Market prospects for the health sector is promising as it is one of the major areas the government gives attention. The Ethiopian community is interested in new technology developments and products in relation to medical equipment and supplies. In the new Growth and Transformation Plan of Ethiopia, 2015-2020, it is envisaged that necessary incentive packages such as tax exemption for heavy machines and some medical equipment as well as importing of vehicles for ambulance service will be made available to the private sector working on health and healthcare related services. In addition, the Government of Ethiopia is working on improving Private Public Partnerships, to improve the health service in the country.
A U.S. firm wishing to establish a branch office in Ethiopia must submit the following documents for registration:
The government of Ethiopia is working to address the challenge of high out of pocket costs for the use of health services which includes the introduction of community-based health insurance (CBHI) and social health insurance (SHI) for the informal and formal segments of society, respectively. The Ethiopian Health Insurance Agency (EHIA) has already been established and is undertaking the necessary preconditions to offer SHI. Currently patients are using on the spot payment for medical services as Ethiopia does not yet have an insurance system in place.
The prohibition of foreign financial services institutions from operation in Ethiopia and the undeveloped regulatory environment are significant barriers for market entry and access to credit, especially for Small and Medium Sized Enterprises (SMEs). Additional factors are periodic foreign exchange shortages, lack of access to finance due to companies unable to access finance from banks and private investors, lack of skilled manpower, poor infrastructure in areas such as communication, road, electricity, bureaucratic procedures, and high transportation and transactional costs.
Procurement & Tenders
Most of the tenders and procurements are posted on the local newspapers.
1. What is the best way to enter to the Ethiopian market?
Building a partnership with a well-established local importer is the best way to enter to the Ethiopian market.
2. What is the biggest challenge U.S. firms face in the procurement process?
The biggest challenges faced by U.S. firms in the procurement process is the lack of transparency and unequal treatment amongst bidding firms.
U.S. Commercial Service Contact Information
Name: Yemesrach Kassu
Position: Commercial Specialist
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