20 September 2017

Ethiopia: Chinese Investors Help Ethiopia Expand Employment Opportunities

Addis Ababa — Sherry Zhang, the General Manager of Huajin shoe making factory, is a zealous Chinese investor with a determination to expand job opportunities for Ethiopia's skilled youthful population.

In the next five years, her firm that is located in Ethiopia capital Addis Ababa's Eastern Industrial Zone will be prospecting 100,000 jobs for the locals.

"We currently have 4,200 employees and next year we expect to increase the number to 6,000," Sherry told Xinhua during a recent tour to the factory.

"But our plan is to increase the workforce to 100,000 in the next five years," she added.

Ethiopia, an Eastern Africa country with 102 million people has a lower unemployment rate than neighboring Kenya based on the 2017 Human Development Index (HDI) by United Nations Development Programme (UNDP).

Kenya with its 45 million population ranks higher on percentage of unemployed people of working age. It stands at 39.1 percent against Ethiopia's 21.6 per cent with such investments as Huajin likely to drop the rating.

The firm which opened its doors in 2012 manufactures shoes exported exclusively to the United States but sources raw materials including leather from local suppliers.

Workers here are properly inducted into the system before they are officially taken in to undertake particular duties ranging from piecing the materials together to packaging the shoes ready for the market.

They are taken through training on shoe making to enable them understand the process, basic Chinese language to break language and communication barriers as well as the company culture for seamless assimilation into the firm's working environment.

"We are very keen on transferring technological and shoe making skills to the Ethiopians so that they are also able to become accomplished entrepreneurs," she said.

Employees' social welfare is equally catered for as a canteen is suited within the premises and well equipped with cooks who never miss to prepare 'Injera', the Ethiopians' popular flatbread made from fermented teff flour.

According to Sherry, the company hopes to generate annual revenue of 30 million U.S. dollars.

By extension, establishment of Huajin is an achievement under the Forum on China-Africa Cooperation (FOCAC). Its financing partner is China-Africa Development Fund created out of FOCAC's resolutions.

Experts argue that FOCAC provides a platform for African countries to advance industrialization within their respective territories.

"FOCAC presents partnership opportunities for Chinese investments in the African countries. It is however important that focus is put on building youth's technological capacities so that they are able to become entrepreneurs," said Gedion Jalata, the Program Manager for Africa-China Dialogue Platform.

Mulugeta Tiruneh, Ethiopian Investment Commission (EIC) One Stop-Shop Service (OSS) Manager for the Eastern Industrial Zone, said the populous nation has the advantage of cheap labor, an attractive incentive to investors.

He said the country's investment laws offer incentives to investors, profoundly creating a favorable environment for external business community.

"Foreign investors can invest on their own or in partnership with their domestic counterparts in areas open for FDI (Foreign Direct Investment). There are no restrictions on equity ownership in joint-venture investment," said Tiruneh.

He added that foreign investors are also exempted from payment of customs duty on imported capital goods, construction materials and spare parts worth up to 15 percent of the value of the imported goods.

The World Bank in its Global Economic Prospects reckoned Ethiopia as among the fastest growing economy in 2017, which is projected to grow by 8.3 percent backed by its infrastructural development.

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