Abstract:
The main subject of this paper is to examine the rules that regulate FDI for national economic
security matters protection under domestic investment laws of Ethiopia. Evaluating the Ethiopian
law of FDI screening is important at the time when a number of countries have been changing their
approach to FDI screening for the national economic security ground and securing the advantage
of FDI by guarantying their sovereignty. In line with the dynamic field of the law of FDI, Ethiopia
has currently enacted a new investment regime. However, the country is tackling with two
interconnected issues: namely, a question of attracting foreign investors for purpose of sustainable
economic development and gaining foreign capital (the access question) and a question of
designing a proper foreign investment regulatory framework for domestic national economic
security matters (a regulation question). The challenges surrounding these two questions are the
subject of the study, Hence, this paper evaluates the rules i.e. entry procedure rules, sector specific
exclusion rules, foreign ownership restriction rules, entry condition rules and performance
requirement rules that are applicable to the screening of FDI in general and for the national
economic security matters protection in particular in Ethiopian investment regime and tests their
level/extent/ degree of control by using a qualitative methodology, specifically doctrinal method
of doing research. The researcher found that, the issue of foreign direct investment regulation for
national security matters under Ethiopian domestic investment law is not as such transparent and
not consistence subject matter and left for policy matters which make it ambiguous and very
bureaucratic. In addition, the paper after evaluating the rules that applies to FDI for the protection
of national economic security give some recommendations which enable the investment regime of
Ethiopia to include a clear provision for FDI screening mechanisms, measures should be
proportional, entrance procedure should be less bureaucratic. In sum, Ethiopia needs to have a
specific and specified national security exception in both its domestic investment laws and BITs,
according to the researcher
