Enhance the friendly environment for investment
Gemechu Tussa
It is really incredible that a country which was supposed to dismantle and integrate has emerged as one of the fast economic growing country. However, the journey was not so smooth and regular. There were a number of challenges including both natural and artificial. These include drought, rent seeking, extremism and chauvinism.
One of the striking achievements amidst these challenges was the country’s diplomatic relations with other countries in the Horn, in the continent and in the world. The Ethiopian missions abroad have shifted into economic diplomacy which has been dominated by strengthening relations for political cooperation. This has come up with the rising of Foreign Direct Investment influx to the country. The bare reason is the fact that Ethiopia has created a conducive atmosphere that contributed to the continuous flow of well known companies and institutions to the country and invest in different areas.
On June 2017, the Ethiopian Ambassador to India, Asfaw Dingamo, urged the Nepalese investors to invest in Ethiopia as they are endowed with tremendous investment opportunities that could offer a number of rewarding opportunities. The Kathmandu Post reported that the Ambassador proposed a plan for Nepal’s Ministry of Foreign Affairs to strengthen cultural exchanges and tourism promotion between the two countries.
This is one example that Ethiopia has been strengthening its bilateral relation with any country based on mutual benefit and respect. In most countries Ethiopia has formed bilateral consultative committee between the foreign ministries of Ethiopia and Nepal that would strive to strengthen bilateral ties and scale up economic and cultural opportunities.
Ethiopia has now becoming one of the preferable investment destinations for foreign investors. There are a number of incentives for all potential investors to invest in agro-processing, manufacturing, chemical, pharmaceutical, textile and apparels. The expansion of the industrial parks in the country would add values to the growing investment in the country. These sectors are currently booming following the construction of numerous industrial parks across the country. Moreover, foreign investors can benefit from the growing market and economy of Ethiopia which is registering commendable double digit growth.
That is why the trade and investment activities have been booming from time to time. It is known that a lot of foreign investors are investing in agro-processing and manufacturing activities. In doing so, a number of job opportunities to citizens.
Ethiopia has also identified several strategic investment priorities with incentive package. One of the major areas that investors have been favored from is the various government incentives particularly to the manufacturing sector. With the objective of substituting the bulk import of manufactured products, which is consuming the scarce resource of the country, the government has been providing tremendous incentives for the private sector interested to be engaged in a range of investment activities.
The country has imploring foreign investors to Ethiopia that could invest their wealth on various development sectors, which contribute to speed up the ongoing development. In this regard, during the Second Growth and Transformation Plan, Ethiopia envisages raising the contribution of industrial output in the overall economy and eventually changing the agriculture leading economy to industry led. It has now become so customary to see a lot of manufacturers from different countries including China, Turkey, India, USA, UK and Israel engaged in the production of textiles and garments, leather goods, paper, mineral products, cement and chemicals.
Therefore, foreign and domestic investment has been steadily growing in Ethiopia as the country has been exerting considerable effort to desirably improve its business and investment climate through the issuance of various legislative measures. It is now public secret that Ethiopia has ranked the third largest FDI recipient country in Africa since 2013. According to World Investment Report, the country is one of the top performing African countries in attracting foreign direct investment, registering a 46 per cent increase in 2016.
The report further said: “Some diversified producers of East Africa registered strong FDI in 2016, with Ethiopia attracting more inflows than ever before. Ethiopia stood out to become one of the largest recipients of FDI in the continent posting strong and record growth, up 46 per cent to three billion US dollars.” The report attributed the achievements to investments in infrastructure and manufacturing can create thousands of jobs, increase quality of export produce and foreign currency earning.
Noting the role and contribution of FDI to the country’s economy, the government has responsively set up offices vested with special duties to manage and facilitate matters of investors in custom offices and investment destinations. The government has been organizing various forums and events targeted to exchange views and gain invaluable ideas from investors; to proactively iron out possible hindrances that may encounter the investment sector.
The government believes that encountered problems and legislative issues could be alleviated through regular forums and dialogues. Boldly, it is also implementing measures to further privatize and liberalize the trade regime and, in turn, create a safer and more attractive investment environment to foreign and domestic investors.
This boosting of investment in the country has enabled it to enhance healthy growth of the country and secure safety of financial activities in a desirable manner. The measures even help curb illegal out flow of foreign currency which might otherwise be aggravated by racketeers acting in the name of investment.
The very glaring fact on the investment and development history of the country, nation has reached the current level of development due to the unreserved effort of the government which selectively invests in public sectors that are not favored by private investors. The expanding industrial parks are just the results of the consolidated efforts of the government of Ethiopia in enhancing its economic development. These parks raised opportunities to many investors to invest in the country.
The country accepts any investor’s investment proposals without any discrimination as far as it fulfill the requirements. According to information from the Ethiopian Investment Commission, the screening process is not regarded as an impediment to investment, a limit to competition, or a means of protecting domestic interests. It is believed that Ethiopia will continue undertaking activities of enhancing the conducive atmosphere for investment so as to raise the number of international potential investors in the country.