ADDIS ABABA--The Ethiopian Investment Board has decided to lift the regulation which prevents foreign investors from engaging in the logistics industry which was exclusively reserved for Ethiopian nationals.

According to a statement issued by the Ethiopian Investment Commission here Tuesday, the board has lifted the restrictions, including for investments in bonded warehouse, consolidation and deconsolidation services, and to allow joint venture participation by international logistics service providers holding up to a maximum of a 49 per cent stake.

Explaining the rationale behind the change, the board said no significant improvement in cost or speed to market has so far been achieved by the logistics sector. The country's low performance against its peers under international benchmarks is a key testament in this regard, it added.

The decision is aimed at improving the performance of the logistics sector, which the board believes can be developed as a thriving and productive cluster serving as another pillar of industrialization and a driver of growth.

Policy and regulatory barriers which precluded the participation of international logistics service providers, among others, had imposed serious strains on the export manufacturing sector as it limited the availability of capital and technology-intensive end-to-end logistics solutions, it added.

The promotion of joint venture investments between international players and their Ethiopian counterparts, with the former holding minority stake participation, will not only promote the transfer of technology and know-how to Ethiopia but also ensure that domestic players will retain key decision-making powers, the statement noted.