During a rare business panel on Thursday, which aimed at showcasing US firms in Ethiopia and organized by US Embassy in Addis Ababa, diplomats and companies have welcomed the recent changes in the political and business environment of Ethiopia.
Michael Raynor, US Ambassador to Ethiopia, said on the occasion that the recent discussions and debates on the business and economic environment of country, and the proposed changes in this regard are highly encouraging. Nick Barrnet, Press Officer with the embassy, told The Reporter that the business panel was held in line with the recent economic reform which is believed to be encouraging for the growth of solid investment by local and foreign companies.
Dubbed ‘responsible business: American Companies in Ethiopia,’ the panel discussion has featured three US companies to showcase their success and challenges in setting up shops in Ethiopia.
Company representatives of General Electric (GE), DOW Chemical and PVH Corp have showcased what it is like to do business in Ethiopia. Daniel Hailu, CEO of GE Ethiopia, has welcomed the Public Private Partnership (PPP) law which will facilitate the active role of the private sector in areas that previously were reserved exclusively for public enterprises. He welcomed the recently proposed privatization reforms. However, Daniel mentioned still existing challenges for both local and foreign firms working in Ethiopia. He pointed out the lack of consistency and transparency in the procurement procedures, payment delays and the universal hard currency shortages which are dwarfing the day to day operations of GE and others. GE has operations in areas of aviation, energy, renewable energies, healthcare and the like.
According to Matt Butler, outreach director with PVH-Ethiopia, the Hawassa Industrial Park in which PVH has set up shop, is helping Ethiopia to add value on its manufactured goods and create jobs. He said, “so far, 17,000 jobs have been created in the Hawassa Park and as far PVH is concerned, it has been making 82 percent value addition to its shirt product line in the park and exporting to major stores PVH runs across its global chains”. Amassing 9 billion dollars revenue annually, PVH has made the decided to invest Ethiopia in 2014 shifting its 20 percent global supply chain to Africa.
The Hawassa Industrial Park which houses 20 companies at 52 factory sheds has generated USD 100 million in export in 2018. In the coming three years, export revenues generated from companies in the park is expected to reach USD 500 million and jobs to hit 60,000. These figures, however, are contradictory to previous targets set by the government. Arkebe Oqubay (PhD), former board chairman of the Industrial Parks Development Corporation (IDPC), has projected the Park will generate one billion dollars at end of its first year in operation. In addition to that, there are labor issues in the park in-line with decent pay and rights of assembly. According to Butler, such matters are going to be addressed by instituting workers’ management committees.
DOW Chemicals is another group whose activities in Ethiopia including the possibility of introducing a water conservation product were featured in the panel. Currently, DOW supplies agricultural inputs to farmers engaged in teff and wheat productions.
According to Barnett, the US Department of Commerce has announced that Under Secretary of Commerce for International Trade, Gilbert Kaplan is coming to Ethiopia leading a delegation from the President’s Advisory Council on Doing Business in Africa (PAC-DBIA) to Ethiopia.
The fact-finding mission of the Undersecretary’s visit will be accompanied by several US company representatives. Undersecretary Kaplan is expected to meet officials of the government of Ethiopia and sign accords with the Ministry of Finance and Economic Cooperation (MoFEC).