Africa: Is Ethiopia the Ideal Investment Spot in Africa?


Photo: Addis Fortune

As car decor sales rise in Addis Abeba, it seems that for car decoration shops business is booming.

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Foreign Direct Investment (FDI) has been steadily growing in Ethiopia due to the various incentives both federal and regional governments offer to investors. The incentives include tax holidays, improved bureaucracy and infrastructure development. The government has been investing heavily to improve the country’s infrastructure that added values to the steady investment growth in the nation.

Local and foreign investors have invested, and are still investing a large volume of capital in agriculture, construction, manufacturing and other sectors here. As a result the Foreign Direct Investment (FDI) influx to Ethiopia has grown up to be the highest in Africa.

The government has been paying due attention to attract more FDI by providing export incentives, customs duty exemption, income tax holidays and offering land in competitive lease price, all are expected to keep this momentum of investment inflow from abroad to Ethiopia but a lot remain to be done in the years to come.

The availability of land and abundant labor forces also contribute a lot to attract giant investing companies to the nation. More investments are coming to the country by seeing the performance of companies that have already invested here.

The enduring peace and stability of the country has also contributed a lot in attracting foreign investors. Despite being in a volatile region of the world, Ethiopia has succeeded to maintain its peace and stability for the last 25 years which has added its credibility among foreign investors who value security as an integral input for doing business.

Hence, globally reputed investors are flocking to Ethiopia en masse to reap benefits from the country’s huge potentials in infrastructure, service delivery and other sectors. Success of these foreign investors is even more significant to the country as it would speed up its economic transformation and help realize its vision of attaining middle income status nations by 2025.

The achievements of the country so far is undoubtedly encouraging. But we still have to think bigger and work harder towards our goal considering our big economic potential, the ever changing and dynamic needs of the people, as well as the need to fend of possible challenges that could incur damages to our development like the recent incidents of drought and infestation of pervasive pest like FAW.

This could not be taken as ambitious or exaggerated as we already have what it takes to achieve it, and has been tested practically that it would help us achieve our big dreams if we work hard with synergy and commitment.

By taking lesson from the experiences so far as well as considering the comments and advises by economists and seasoned investors, the government is taking measures to rectify hurdles observed in investment as well as the need to adequately exploit the country’s development potential.

One indicator to the governments commitment to apply such changes is the rapid expansion of industrial parks across the country that would play essential role in addressing the bureaucratic and infrastructural setbacks investors had been facing.

The parks would also reduce the challenges investors have been encountering in the operation phase by providing them with land, sheds and infrastructural facilities and introducing a single electronic window system.

Due to this move many parks are being built in many directions of the nation with Addis Ababa, Makalle, Hawassa, Kombolacha already operational and the construction of others is going well in other parts of the nation.

Furthermore the government has been working tirelessly to promote the capacity of other relevant infrastructure that have direct contribution to the success of foreign investors. This includes the large scale development of the energy sector, the massive construction of highways and railway lines, expansion and construction of airports in various parts of the country as well as development of ports in Djibouti and Kenya, among others

In addition to the attention given to the investment policy and infrastructure the government is also beefing up its economic diplomacy a cornerstone in Ethiopia’s Foreign Policy, as it boosts the confidence of foreigners in investing in Ethiopia. Ethiopian embassies and consulate generals in many countries are exploiting the enormous potential for trade and investment which is guaranteed by international law and bilateral relations with their respective countries.

All these factors surely make the country an ideal spot of investment in Africa. What remains ahead is to promote all these opportunities so as to benefit both the country as well as those who wish to benefit themselves by harnessing the country’s potential.



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