Assessing the Challenges and Prospects of Ethiopia’s Ratification of the International Centre for Settlement of Investment Dispute (ICSID) Convention
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Date
2025-04-01
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Addis Ababa University
Abstract
The International Centre for Settlement of Investment Disputes (ICSID) plays a vital role in
addressing the growing concerns of host states and foreign investors in resolving investment related disputes.
As Ethiopia continues to attract investors from around the world, the need for
reliable and effective dispute resolution mechanisms becomes increasingly critical. One such
mechanism is ICSID, which offers a neutral and internationally recognized forum for investment
dispute resolution. However, despite its potential advantages, Ethiopia has not yet ratified the
ICSID Convention
This study aims to assess the challenges hindering, and the prospects supporting, Ethiopia’s
ratification of the ICSID Convention. To achieve this objective, the researcher employed doctrinal
research methodology. The analysis focused on international and domestic legal frameworks
governing investment disputes, with particular attention to the ICSID Convention. Additionally,
interviews were conducted with officials and experts from the Ethiopian Investment Commission
(EIC), the Ministry of Foreign Affairs (MoFA), and the Ethiopian Federal High Courts.
The findings reveal that Ethiopia’s reluctance to ratify the ICSID Convention is shaped by legal
uncertainty, lack of institutional preparedness, and risks tied to international arbitration exposure.
However, the study also identifies growing momentum for reform, driven by the need to attract
quality FDI, address investor concerns, and enhance credibility through a more predictable
investment dispute resolution framework.
The study concludes by recommending key government institutions particularly the Mo FA,
Ministry of Justice and the EIC work closely with legal and policy experts to build institutional
readiness and legal clarity. Rather than pushing for ratification in isolation, Ethiopia should first
strengthen the enforcement of its domestic dispute mechanisms and gradually align its dispute
resolution mechanisms with international standards. This measured approach would not only
protect national interests but also boost investor confidence and elevate Ethiopia’s credibility on the international stage
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Keywords
Dispute Resolution, ICSID, Investment, FDI, Ethiopia