Things are rapidly changing in Ethiopia. This country, situated in the north-eastern part of Africa, is considered one of the most politically and socially stable countries in Africa.
Ethiopia is making headways and becoming a great place to do business.
The Ethiopian economy is mainly based on agriculture, which in 2010/11 accounted for about 50% of the gross domestic product (GDP), 90% of foreign currency earnings and 85% of employment. This was highlighted at the Nedbank-NEPAD Business Forum entitled; ‘Ethiopian Investment Forum’, where emphasis was placed on the economic boom the country was experiencing as well as the investment opportunities that existed for the private sector.
Nedbank and the NEPAD Business Foundation hosted the Ethiopian Ambassador to South Africa His Excellency Mr. Mulugeta Kelil Beshir, the Director General of the Ethiopian Investment Agency, Mr. Fitsum Arega and The Secretary General of Ethiopian Chamber of Commerce and Sectoral Associations, Gashaw Debebe at a public and private sector exchange event on 18 March 2014.
At the event, Fitsum Arega, elaborated on the enormous efforts that have been implemented in major key sectors to achieve its Millennium Development Goals (MDGs). “This has resulted in Ethiopia being among the top performing economies with an average GDP growth of 11% per annum since 2004, and rapid growth is expected to continue,” he said.
“The overall economic growth of the country is highly associated with the performance in the agricultural sector,” says Arega.
“Coffee is furthermore critical to the economy and earned US$ 941.8 million in exports in 2010/11. Other important export products include gold, oil seeds, chat, flowers, livestock, pulses, leather and leather products, meat and meat products and vegetables.”
Thabang Chiloane, Divisional Executive Public Affairs at Nedbank says that the times are changing in the Horn of Africa and the larger East Africa region.
“Although Ethiopia may be one of the least developed countries, crime is uncommon and may well be the country with the lowest levels of corruption. The country has a large population and thus potentially one of the largest domestic markets in Africa – which is attractive for domestic and foreign investors.”
Ethiopia provides macro-economic stability and is a growing economy with transparent laws and streamlined procedures. There are adequate guarantees and protections as well as competitive investment incentive packages. Furthermore, it has a vast area of arable land and a large population in comparison to its neighboring countries.
“Ethiopia has huge potential in attracting investment specifically in its agricultural sector as its boasts over 513 million hectares of arable land,” adds the Special Envoy. Ethiopia remains an untapped and unexploited market for investors and currently China, India, Sudan, Germany, Italy, Turkey, Saudi Arabia, Yemen, the United Kingdom, Israel, Canada and the United States are major sources of Foreign Direct Investments (FDI),” says Ambassador Kelil.
To encourage private investment and promote the inflow of foreign capital and technology into Ethiopia, the government has varying customs duty exemptions provided to investors, both domestic and foreign.
This includes among others, new enterprises or expansion projects such as manufacturing, agriculture, agro-industries, generation, transmission and supply electrical energy, information.
Communication technology development, hotel and tourism, are also some of the industries under the spotlight. Ethiopia is a country with great potential in construction contracting, education and training, hotel services, architectural and engineering works.
“Serious investors are encouraged to consider Ethiopia as a destination for their investment,” says the Ambassador.
“The Ethiopian government has formulated a five year Growth and Transformation Plan (GTP) to carry forward the important strategic directions in maintaining a fast growing economy in all sectors. The plan also focuses on private sector investment promoting growth, which includes; attractive tax holidays and duty free packages for investors, investments in infrastructure and a strong commitment to agriculture and rural development through allocation of more than 10% of the total government budget and accordingly, Ethiopia’s economy is projected to grow at an average growth rate of 11.2%,” concludes Arega.