Hurdles to Overcome and What’s Needed Next

Challenges:

• Funding bottlenecks & regulatory delays

  Traditional banks hesitate to back startups. Venture capital is sparse, while regulatory red tape still hinders startup operations.  

• Infrastructure & talent constraints

  Reliable internet, affordable office space, and critical infrastructure remain lacking—especially outside Addis. A skills gap and brain drain further undermine ecosystem growth.  

• Legal and financial barriers

  The Startup Act remains stuck in draft phase. Foreign exchange shortages complicate imports and essential payments.  

  Yet recent reforms help—startups no longer need office space to get licenses, and can now keep 100% of foreign exchange earnings.

• Market and investor awareness

  Limited acceleration programs and fragmented network support remain challenges. The ecosystem needs better data sharing, sector-specific incubators, and engaged local investors.