The Ministry of Industry has acknowledged that Ethiopia’s young entrepreneurs and innovative startups are struggling to secure investment partners, despite growing government efforts to foster a vibrant startup ecosystem.

Minister of Industry Melaku Alebel made the remarks ahead of this year’s Ethiopian Product Expo, emphasizing that while the government is working to create opportunities for startups, many still face significant barriers in connecting with investors who can help scale their ideas into profitable ventures.

The challenge is not new. Ethiopia’s startup sector has long grappled with limited funding opportunities, an underdeveloped investment culture, and regulatory complexities. Recent studies highlight that early-stage investment remains sparse, with inconsistent funding for both seed and growth-stage startups. Only a handful of Ethiopian startups have attracted substantial capital, and most entrepreneurs cite a lack of access to investors as a primary constraint.

To address these issues, the government has introduced a draft “Startup Ecosystem Development Policy,” aiming to provide a comprehensive framework to support startups from inception to market expansion. The policy identifies key challenges, including the absence of clear definitions for startups, limited access to skilled talent, and regulatory hurdles. However, it also notes strengths such as a young, entrepreneurial population and increasing support from international partners.

At the upcoming Ethiopian Product Expo, over 288 participants-including 161 high-end manufacturers and 100 small and medium enterprises-will showcase their products, with more than 120,000 visitors expected. The minister expressed hope that the expo will facilitate over 6,000 business transactions worth more than 4 billion birr, potentially opening new avenues for startup investment.