Different investment related information indicate that Ethiopia is being considered a promising place for investment. The investment information providers assured that the country is a strategic destination for multinational investors following its diversified investment opportunities and various investment incentives by the government.
The Ethiopian government provides various investment incentives to local and multinational investors. This includes capital incentives, industrial raw material supply, construction and laboratory as well as effective transportation service provisions. The Ethiopian government is aggressively working towards increasing transport, electric power, and telecom, among other infrastructures access.
Agriculture, textile and apparel, leather and leather products, pharmaceuticals, agro-processing, ICT, power generation, mining, tourism, among others are the strategic sectors for investment as identified by the government. Ethiopia's natural and various riches such as vast arable land, favorable climate, diverse agro-ecological zones that make it possible to grow almost everything, cheapest electricity per kilo watt hours, and trained and affordable human power combine to make it an incredible hub for investment.
The country has 74.3 million hectares of arable land. Out of this, over 3-million-hectares of land has been made available for investment. Ethiopia offers one of the largest and most diverse agricultural investment opportunities in the continent.
The inauguration of numerous industrial parks across the country is also the other strategic opportunity to attract potential investors. The industrial parks are both government and private owned. Facilities in industrial parks include One-Stop Service, dedicated power sub-station, waste treatment facilities, commercial buildings and housing facilities, health stations, fire brigade, and 24/7 security service.
Currently, the country has given due priority to realize smooth transitions to industrialization through promoting the private sector engagements and privatizing many of the state-owned businesses. The new home-grown economic reform aspires to address foreign exchange challenges and sought to generate tangible revenue by boosting export volume.
The economic reform strengthens multinational investors to join investment in the country. Different investment incentives have been offered by the home grown economic reform policy so as to attain well established economic growth. Experts applaud having a well-organized homegrown economic policy will have a significant role in realizing Ethiopia's sustainable development by ensuring rapid economic growth.
According to the recent World Bank Report, Ethiopia tops East Africa in attracting FDI, with almost half of the inflows to the East African region. The existing suitable development policies, the government's special attention to the sector, competitive and trainable labor force are among the major factors that enabled the country to become successful in attracting FDI. As one of the largest recipients of FDI in Africa, Ethiopia has attracted several global brands highlighting competitive investment opportunities.
Ethiopian Investment Commission (EIC) Public Relations Directorate Director Henok Solomon told The Ethiopian Herald that the country has attracted 2.05 billion USD Foreign Direct Investments (FDI) within nine months of the recently passed Ethiopian budget year. This FDI inflow has been registered amid the Covid-19, global inflation, and internal stability challenges on the investment sector.
Currently, EIC is undertaking massive investment reforms. The new investment proclamation had been ratified by the Council of Ministers during the past budget year. Improving ease of doing business, expanding employment opportunities, promoting FDI inflow, providing standardized infrastructural facilities, among others are the major priorities of the commission, the director said.
More importantly, as to him, the commission has done successful activities regarding motivating multinational investors to join investment in industrial parks and facilitating all the necessary preconditions timely. It is pleased to satisfy the need of investors at anytime and anywhere. The number of multinational investors joining investment in the country is increasing year after year following the government's measures to promote investment. Various international level known manufacturing industries and other local companies are eyeing joining investment in various Industrial Parks throughout the country.
According to him, during the 2020/21 Ethiopian budget year, 132 new giant investors from European and other countries have already licensed and commenced production in the country. 12 local manufacturing investment projects have joined investment in industrial parks following the government's efforts to support domestic investment. The industrial parks have generated 129 million USD only from leather and leather products. Regarding job opportunities creation, 58,631 new jobs had been created by the industrial parks.
Currently, 237 multinational and local projects have commenced operation and manufacturing by the reported Ethiopian budget year. For instance, the 600 million USD giant cement factory, the Lemi Green Building Materials Company operated and run by Ethiopians and British investors had been licensed by the same Ethiopian budget year. An Indonesian company with over 100 million USD has joined investment on machinery and spare parts manufacturing. Out of the total multinational investment projects, 58 percent are licensed in manufacturing, 37 percent in the service sectors, and the rest 5 percent in agriculture, he noted.
The director further elucidated that investors are coming largely to Ethiopia following the promising investment environment and various investment reforms being undertaken by the government.The entrance of globally competitive multinational companies demonstrates the effective implementation of investment policies and strategies in the country.
In addition, the commission has launched latest technology based FDI tracking tool and grievance handling systems platforms to help stimulate multinational investment.
Adding he said that all the investment projects are environmentally friendly and ensured zero pollution to the environment. The industrial parks are installed through waste water treatment plant to protect the environment and ensure healthy investment in the country.
Accordingly, despite the above promising progresses some sort of instability here and there, the COVID-19 pandemic, deficit of foreign exchange, lack of effective investment land holding services, among others are the major challenges the sector is facing, he mentioned.