ADDIS ABABA — The Ethiopian government has introduced draft legislation that, for the first time, would allow foreign nationals to own homes and property in the country — a sweeping policy shift aimed at attracting foreign capital and addressing a deepening housing crisis.
The proposed law, unveiled Thursday by the Prime Minister’s Office, was submitted to the House of People’s Representatives by the Council of Ministers following a regular session in which six agenda items were reviewed. The government described the measure as a cornerstone of its broader strategy to stimulate economic growth and modernize the nation’s real estate sector.
“This proclamation is expected to create significant job opportunities, expand housing access, and strengthen real estate development across the country,” the Prime Minister’s Office said in a statement.
The move signals a deliberate break from decades of tightly controlled property ownership laws in Ethiopia, where land is technically owned by the state and long-term leases are granted to citizens and investors. The draft legislation, officials say, has been designed to respect the land rights of Ethiopian citizens while opening the door for increased foreign participation.
Allowing foreign nationals to own property, the government argues, will inject much-needed capital into the housing sector, help narrow the demand-supply gap, and catalyze urban infrastructure development. The country has long faced chronic housing shortages, particularly in major cities like Addis Ababa, where real estate prices have surged and slums continue to grow.
The draft law builds on a related proclamation passed in November 2024, which permitted foreign investors to participate in real estate development projects for the first time. That earlier reform was accompanied by an official guidance paper titled “Real Estate Development and Real Estate Transactions and Valuation,” which outlined the legal and economic rationale behind liberalizing Ethiopia’s property market.
That document cited insufficient domestic capital, outdated construction technologies, and a severe housing backlog as key obstacles to urban development. It also warned that the housing crisis could become a drag on national economic growth if not addressed with urgency.
While the new proposal is expected to spark debate within Parliament, economic analysts say it reflects a growing recognition within Ethiopia’s leadership that foreign investment will be critical to bridging infrastructure gaps and sustaining growth in one of Africa’s most populous nations.
If passed, the legislation would mark one of the most significant reforms in Ethiopia’s investment landscape since Prime Minister Abiy Ahmed launched his economic liberalization agenda in 2018.
