This paper provides empirical evidence of agile method adoption in smaller companies in Ethiopia. Agile methods are emerging as best practice for software development in the global north. So, is there evidence that agile methods are being used in Ethiopia? A Grounded Theory approach was adopted using face-to-face interviews with 17 software professionals from 7 software companies, which were selected by using a snowball sampling technique. The interviews were semi-structured and open-ended and have been audio-recorded and transcribed. Participants in the study identified the importance of agile principles, values and practices. Agile practices are used to address issues with requirements and to encourage user participation. However, it was discovered that the companies in the study were conducting software projects for government clients that mandate substantial documentation with elaborate staged approval procedures, using fixed price contracts with predefined delivery schedules.