Shrubs are often considered competitive barriers for seedlings planted in reforestation programs, although they can facilitate tree recruitment, especially in ecosystems under high abiotic stress. An alternative reforestation technique using pioneer shrubs as nurse-plants for Olea europaea ssp. cuspidata was tested in exclosures in northern Ethiopia. Seedlings were planted in three different microhabitats, and their survival was monitored. The microhabitats were bare soil patches between shrubs, patches under the dominant shrub Acacia etbaica, and patches under Euclea racemosa, an evergreen shrub, which supports the majority of naturally established Olea recruits. The ability of shrubs to offer protection against browsing goats was tested experimentally. Controlled shading was used to determine whether solar irradiation causes seedling mortality in environments without water stress. Data were analyzed using Kaplan–Meier survival analysis, Kruskal–Wallis analysis of variance (ANOVA), and one-way ANOVA. Olea survival was significantly higher and shoot damage by goats was lower when planted under shrub cover compared to bare soil patches, particularly under Euclea canopies, although high shade levels reduced seedling performance. Reduction of solar radiation by shrub canopies and thus control of soil–water evaporation and seedling transpiration most likely controlled the observed facilitation. Planting under shrubs may increase seedling survival and assist regeneration of dry Afromontane vegetation. Preserving pioneers also reduces soil erosion and conserves biodiversity. Excluding livestock is essential for Olea woodland restoration and allows persistent but morphologically modified Olea shrubs to develop vigorous regrowth. Facilitative processes are guiding principles for assisted forest restoration, but above-average rains may be critical to restore higher biomass levels in semiarid areas.