Latest reports indicate that the FDI has continued to grow. Hence all stakeholders need to step up efforts to build up on current factors that are attracting more Foreign Direct Investment (FDI) and pave the way out of poverty for the country.
Indeed FDI is something all country strives for. Attracting more FDI helps a country to get more forex, create more jobs and achieve success.
Ethiopia has actually opened up its economy only for private sector and foreign investment only for 3 decades that followed the nearly two decades of command economy. So the first few years of the operation of the market economy was responsible for healing the wounds of the command economy that gutted down the economy.
Yet despite the statistical increases in foreign investment and economic growth the economy that started to revive in the years of the free market economy still had challenges to attain the required momentum as there were some policy and procedural hurdles that fettered the smooth operation.
Therefore there was a need for radical action that can lift the economy out of the business as usual trend of development and put in place the necessary policy framework so that the country’s economic development can experience genuine growth.
After the slow but continuous growth of the investment flow to the country Ethiopia is now able to own one of the five largest economies of the continent that combined together accounts for about half of the GDP of the continent. This being a motivating factor, there is a need to world more on incentivizing local private sector as well as to attract foreign investment in fields to catch up with the rapidly growing demand of the people.
The economy needs to address the challenges in job opportunities and cost of living among others. In this regard, the measures that the government started taking since last July need due collaboration so as to address the problems durably.
The macro economic reform has enshrined actions that should have been taken years ago to boost the role of the private sector including foreign investors. Accordingly the government has taken measures to liberalize the economy through allowing the floating of foreign exchange, opening up of sectors like finance and merchandise that were restricted for foreigners for long time, among others.
With the number and capital of those foreign investors who opt to engage in the already opened up sectors increasing, the country is full of hopes to see the influx of more companies in the months and years to come. There are some improvements already flourishing in the country. For instance the operation of the Ethiopian Security Exchange (ESX) in the coming days, which is the first capital market in the country, is a great leap forward.
Ethio telecom, the state owned service provider which monopolized the industry for decades is now finalizing preparations to sell shares which amounts to 10% of its total capital. The bold and pioneering endeavor of EThiotelecom is a pace setter for many of the state owned enterprises as well as profitable business to harness the capital market in the country for effective development progress.
As all these activities go smoothly the country would be able to entertain the possible inflow of investment and make the best out of it for the benefit of the grassroots.
THE ETHIOPIAN HERALD THURSDAY 17 OCTOBER 2024
