18 October 2017

Ethiopia: Commission Foresees FDI Amounting to U.S.$4.5 Billion

The Ethiopian Investment Commission (EIC) discloses that it has set target to secure Foreign Direct Investment /FDI/ amounting to 4.5 billion USD in 2017/18 fiscal year.

Capitalizing on the massive industrial parks development and enhancing the private sector's involvement in the establishment, the Commission is striving to attain large scale foreign investment, Fistum Arega, EIC Commissioner tells The Ethiopian Herald.

The Commissioner notes that the plan was set taking in to account the ever-increasing demand that foreign companies have shown to enter into the existing industrial parks and build their own.

While Hawassa Industrial Park, which is set to be engaged in exporting high-end products to international markets was fully occupied by foreign companies, investors are also flocking to Mekele and Kombolcha industrial parks, Fistum adds.

Furthermore, the Commission is working to attract foreign companies in Adama I and Dire Dawa I industrial parks which are expected to be inaugurated in a couple of weeks' time.

He says: " The Commission has been giving due attention to lure large-scale foreign companies in the existing industrial parks and encouraging them to be engaged in parks' development and expansion activities."

Alongside the government-owned 13 industrial parks, currently six parks have been built by private companies.

While a Chinese Company with an estimated investment capital of one billion USD took plot in Adama I Industrial Park, a big Italian firm acquired land in the Kombolcha Industrial Park.

The government has been paying due attention to keep this momentum, says Fistum, adding that it has been providing export incentives, customs duty exemption, income tax holidays and offering land in competitive lease price for foreign investors.

Furthermore, EIC's branch offices in the industrial parks are partnering with relevant bodies in providing land, electricity, water and other amenities for investors. Through one-stop-shop service, the offices have also been easing procedures for foreign investors to obtain visas, work permits and other licenses.

Concerning Ethiopia's last year performance, the Commissioner states that the past unrest in some parts of the country has not caused serious impact on FDI flow into the country.

He says: "Significant investments have been witnessed during the State of Emergency and the country has secured 4.18 billion USD in the 2016/17 fiscal year. The figure surpassed the previous year same period by over 900 million USD."

In the reported year, manufacturing sector had the lion's share in attracting FDI. Asian companies, primarily Chinese and Indians are engaged in labor-intensive projects such as textile and leather industries, Fistum states.

In 2016/17 Ethiopia has become the second largest destination for textile and garment industries in the world next to Vietnam.

"Following the commencement of Hawassa Industrial Park and other parks such as Bole Lemi I, Kombolcha and Mekele attracting large-scale investments, Ethiopia has become Africa's textile and garment hub."

Due to the labor-intensive nature of textile and garment industries, many young people, women with remarkable proportion, have got jobs and improving their livelihoods, the Commissioner notes.

The presence of industrial parks has also brought a significant progress in luring FDI and a growing number of companies have made decision to invest in the country after their first visit in the parks.

According to Fistum, Ethiopian missions abroad have been instrumental in promoting nation's investment opportunities to potential stakeholders and encouraging them to do business in the country.

The government has made various investment policy amendments and exerting efforts on improving the quality and quantity of infrastructure as well as enhancing good governance so as to make Ethiopia an attractive destination to FDI, the Commissioner states.

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