Nine Unique Opportunities of Investment in Ethiopia

Ethiopia is Africa’s oldest sovereign country and one of the best-suited in the region. The smooth transition of power to a new Prime Minister in 2012; and again in 2018, underlined the evolution of Ethiopia’s political system and parliamentary form of government. Ethiopia also offers nine unique investment advantages. 

Investment Opportunities of Ethiopia

1. Economic and Political Reforms

Ethiopia’s new transitional government is overhauling economic institutions and rules in order to stimulate investment. Ethiopia’s economic transformations are an incredible example. Similarly, pushing and encouraging political parties to return to Ethiopia; as well as increasing gender equality in political participation, are notable instances of Ethiopian political reform.

2. Growing Economy of Ethiopia

According to the World Bank Report, Ethiopia has one of the world’s fastest-growing economies. Ethiopia is also positioned 57th for its favorable macroeconomic environment, ranking higher than its regional neighbors like (Kenya, Rwanda, and South Africa).  

Ethiopia is also acknowledged by UNCTAD for supporting investment in the Sustainable Development Goals (SDGs); as well as by the World Bank through its “Star Reformer Award” for Ethiopia’s excellent achievement in investment policy reform and promotion. Furthermore, the steady and favorable economic prognosis projects growth of more than 7%, as anticipated by the IMF; and the African Development Bank, placing Ethiopia among the world’s growth leaders over the medium term. As a result, Ethiopia’s second investment opportunity is the country’s stable and favorable macroeconomic climate.

3. Favorable Climate and Fertile Soil

Ethiopia is the world’s 27th biggest country in terms of land area. It is suited for the development of some of the world’s most prized food crops, such as grains, pulses, oilseeds, a broad variety of fruits and vegetables, coffee, tobacco, sugar cane, tea, and spices, among others, due to its diversified terrain and geographical position.

Because of its high height, the bulk of Ethiopia has a fairly moderate temperature by African standards. It has a high central plateau that ranges in elevation from 2,000 to 3,000 meters above sea level. Ethiopia is one of the world’s greatest producers of coffee, and the third largest producer of Arabica beans, owing to its excellent grounds (USDA). Ethiopia is also the biggest non-EU supplier of cut flowers to the EU market and Africa’s second largest flower exporter.

4. Guarantee and Protection for Investors

Ethiopia is a member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank affiliate which issues guarantees against non-commercial risks in signatory countries, and of the World Intellectual Property Organization (WIPO).

In addition, Ethiopia has concluded over 30 bilateral investment promotion and protection agreements, of which 11 are with individual European Union Member States. Significant other partners include China, India, South Africa, and Russia, and a number of regional economic partners (Israel, Egypt, and Sudan, among others).

5. Youth and Available labor force

Ethiopia is the continent’s second-most populous country, employing 60% of its population. Ethiopia also has a young and trainable workforce (median age of 19), as well as a supporting government policy that allows companies to source labor. As a result, Ethiopia’s labor law, which oversees employee-employer interactions, meets international norms.

6.Local and International Market Access

Ethiopia is Africa’s second-largest market, and it’s also a member of the Common Market for Eastern and Southern Africa (COMESA), which has 19 members and a population of over 400 million people. Addis Ababa has also established itself as a regional hub, with the African Union (AU), the United Nations Economic Commission for Africa (UNECA), and the United Nations Development Programme (UNDP) all based there. Addis Ababa is also Africa’s largest aviation center and home to Ethiopian Airlines, which has been named Africa’s best airline on several occasions.

Ethiopian goods are duty-free and quota-free in a wide range of markets, including important markets such as the United States and the European Union: COMESA (Common Market for Eastern and Southern Africa), which has 19 member countries and a population of over 400 million people, AGOA (African Growth and Opportunities Act) and GSP (Generalized System of Preferences) of the United States government efforts, and EBA (Everything But Arms) of the European Union.

7. Improves Facilities and Infrastructure

Ethiopia has the continent’s second-largest hydropower potential (Deloitte, 2014). The Grand Ethiopian Renaissance Project (GERD), Africa’s largest hydroelectric power project under construction on the Nile River, would generate 6,000MW of electricity. Ethiopia will become a regional powerhouse with the Gilgel-Gibe III (1,870MW) and Genale-Dawa III (254MW) wind power projects. Ethiopia has the lowest energy prices in Africa and the world as a result of this. Ethiopia’s enhanced infrastructure also includes expanding and improving telecommunications services as well as transportation infrastructure that link national and regional markets.

8.Competitive Incentives Policies

Ethiopia provides a wide range of subsidies, notably for key industries. As a result, both international and domestic investors may take advantage of these chances to invest in Ethiopia and expand their businesses.

9. Commitment of the Government

Investment promotion and protection, investment regulations, and incentive packages are all used by the Ethiopian government to demonstrate its commitment.

Would you want to learn more about investment? Or do you have any knowledge about Ethiopian business? For more information, refer the official website of Ethiopia Investment Agency. Please leave your response in the comments area. Other blogs might be of interest to you.