ADDIS ABABA–Local enterprises have benefited from the technology transfer created by Foreign Direct Investment (FDI) in the country, according to a study by Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA).
In recent years, Ethiopia has become one of the leading FDI destinations in Africa and also globally. The country hosts various foreign companies from across the globe. China, India and Turkey are the leading countries whose investors engaged in various investment areas. Nowadays, technology becomes the most important source of economic growth.
Economic growth results from accumulation of factors of production or from improvements of technology. Technology transfer encompasses uptake of knowhow and experience and this also leads to a better trained labor force. SintayehuMengiste Domestic Industrialist Support Director told TheEthiopian Herald that,FDI has more dominant international technology transfer globally.
It is one of major channels of technology diffusion across the country. Foreign companies come to the country containing new technologies and materials production method. Ethiopia’s investment has created job opportunities for 133,000 citizens over the 2018 year. On the year 2015/16 alone, the country earns 3000million USD. On August, 2018 Ethiopia has attracted more than 3.7 billion USD foreign direct investment (FDI) during the concluded fiscal year.
Sintayehu added that, the high level of economic growth, the provision of better infrastructure, and the successive growth of market sizes and the government’s openness for FDI contributed to high profile investors targeting Ethiopia. FDI is better for Economic Development Stimulation of one country and also it can enhance the target country’s economic development, creating a more conducive environment for investor and benefits for the local industry.
Near recently in Ethiopia some of the local industry and local investors are participating in some activities by producing the product domestically which are imported from abroad.Due to the technology transfer and by using the acquired technology and experience some of the local companies have embarked on machine installation, accessory assembly, mobile manufacturing and paper and sanitary production.
Getachew Regasa Secretary General at AACCSA for his part stated that,- foreigncompanies will come up with a new knowledge, Experience, and mode of production, therefore FDI is a channel for the knowledge and technology transfer. Nowadays, technology has become the most important source of economic growth. Technology transfer encompasses uptake of knowhow and experience.
Many countries have benefited from the technology transfer, and able tojump into the next level. In the globalization era, technology is the decisive factor in enhancing national competitiveness. Getachew added that, recently Ethiopia is successful in attracting and utilizing FDI. Using the acquired technology made a significant change on the economy. As a result of this FDI firms spend more on training employees to achieve better production. This can indirectly improve the quality of labor in the country.
The Ethiopian Herald, December 29/2018
BY HAILE DEMEKE
