ADDIS ABABA - Ethiopian Investment Commission disclosed that the number of foreign companies investing in the manufacturing sector is surging compared to the other sectors of the economy.
While Ethiopia's FDI inflow is steadily augmenting/rising, there has been a growing trend of an FDI inflow increase towards the manufacturing sector, with the Commission revealing that 136 foreign manufacturing companies have been operational for the 2016/17 fiscal year alone, compared to 42 and 23 companies in the service and agriculture sector respectively.
Mekonnen Hailu, Director of Public Relations with Ethiopian Investment Commission (EIC), told The Ethiopian Herald that the number of foreign manufacturing companies ready to invest in the country is growing by the day, compared to the other sector, mirroring the huge attention given by the government to the sector and the policy and strategy implemented.
Citing the Agency's data, he stated that manufacturing sector takes the biggest portion of the FDI in the last two years, with manufacturers from China, India and the Netherlands taking the lead. This year looks the same as most of the companies that took investment license are readying themselves to invest in the manufacturing sector, which again is more than the other sectors.
According to Mekonnen, this has economic implications. Firstly, the surge in FDI in the sector will play a role in helping the country achieve its vision of transforming the economy from agriculture to industry-led, as there will be technology transfer to the local manufacturers.
Also, in addition to helping with job creation, as the sector is the biggest job creator, this spike will do its part in increasing the country's export volume, and in solving the country's foreign currency issue, he reiterated. "41 companies of those operational from last year are involved in the export sector."
The secret behind the surge has to do with various factors, as to Mekonnen. "One is, Ethiopia has huge trainable workforce, along with a suitable investment policy with incentive packages." Further, he said, various other conducive attractive packages like industrial parks that are for the most part designated for labor-intensive manufacturing including textile and leather, along with the country's competitive infrastructures have played a role in growing the investment that is poured into the manufacturing sector.