16 March 2017

Ethiopia: Securing the Investment Sector to Further Boost the Economy

Photo: Y. Gegziabher/Deutche Welle
A state of emergency was announced after widespread protests largely by the Oromo community.

It is evident that the world's media have agreed up on the fact that Ethiopia is becoming one of the fast-growing economies in the world.

Within the past years, Ethiopia has risen from the lowest place on the list of African Foreign Direct Investment (FDI) recipients to the highest position. And the number of projects in the country have increased dramatically. This is a direct result of a sprouting economy and a government that set its eyes on growth via investment.

Ethiopia is attracting FDI from global investors. The country's economic landscape has taken a concrete shape. And the country has registered a double-digit growth for the last ten years.

The reasons that makes Ethiopia an attractive destination to foreign investors are basically political, social stability and rapid economic growth, excellent climate and fertile soils, private sector friendly government, abundant and trainable labour force, competitive incentive packages, access to wide market.

The key priority areas for investment in Ethiopia are agro-processing industry, textile and apparel industries, sugar and related industries, chemical industry, pharmaceuticals industry and metal and engineering industries.

The establishment of Industrial Parks that focus on the production of textiles, leather, garments, pharmaceuticals, agro-processing and equipment manufacturing displays.

Ethiopia has given special attention to investment. This special attention to the sector has enabled foreign investors to look into the country. This is witnessed within the past years that the FDI of the country has increased dramatically.

Several opportunities created for investors have become the stimulants for international investors to spend their money, skill and capital in the country.

The installation of railway, road infrastructure, Telecommunication service, electricity power, industrial park development projects and others are some of the factors that speed up investment.

According to Ethiopian Investment Commission, in the GTP I the country has registered 1.2 billion USD FDI. This figure has increased at the end of the five year and has increased into 2.2 billion USD.

What is more, in the first year of GTP II, the figure has increased to three billion USD. For the last budget year this figure has also shown a positive increase. Despite all the internal challenges such as drought, security issues and decrease in export, the figure has showed an increase. This is a good evidence that the country is really suitable destination for investment.

Despite the attempts of anti-peace elements to jeopardize the economic progress of the country, the investment growth is still proceeding at a fabulous pace. All pretexts that attempts to destabilize the peace and security of the nation by anti-peace elements does not slacken the investment flow into the country. This has mainly resulted from government's commitment to address the public issues immediately.

It is already known that due to some public grievances in Oromia and some parts of Amhara states, there was a loss of life and damages on some factories by anti-peace elements. However, this did not prevent the flow of investment into the country.

Sources are still indicating the investment flow into the country are still growing. This is a good indication that the nation is built up on a solid democratic and peaceful foundation that encourage and protect the interests of investors.

Using its state of emergency and other measures, the government has managed to parry anti-developmental activities. This has supported and sustained the investment flow into the country.

Using the fertile economic ground of the country, the government is providing incentives that encourage investors. And this incentives are attracting investors from four corners of the world.

Our recent experience has witnessed that the investment sector is one of the most important engines for country's economic development.

It is crystal clear that the role of the investment sector to further boost the economic growth of the country is beyond measure. The sector has a multifaceted benefit to the growing economy of the nation.

Despite the recent unrest in the country, the nation has managed to attract foreign direct investments with a combined capital of 1.2 billion USD during the first half year this fiscal year, with a slight reduction compared to the same period in the previous year.

In a country like Ethiopia that aspires to advance its economy through agriculture, the investment sector can be considered as an insurance or a fail-safe method. In this regard, using the already registered remarkably achievements as input, the government is expected to further encourage investors.

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