Ethiopia has huge investment potential for various reasons. The country is on the right path in registering sustainable economic growth which is among the top performing economies with average GDP growth of 11 percent since the year 2004. And this fast economic growth is projected to continue. Ethiopia is also relatively stable in fostering a peaceful and secure working environment in the volatile Horn of Africa regions. And the country has established strong political and security ties with nations in the region with the aim of nurturing mutual economic ties and benefits.
The country’s capital is the top host for many embassies and international institutions. Ethiopia has managed to have a healthy policy frame work incorporating it in the out stretched goal of Growth and Transformation Plan (GTP) giving due emphasis to private investors. It reinforces investors with benefits like attractive tax holly days, duty-free packages, investment packages, and other infrastructures. It is also a country with a strong commitment to agriculture and rural development through the allocation of more than 10% of total government budget to transform it.
The country has been aggressively striving to ensure good-governance and tackling corruption and it has become a party to multiple international organizations. Furthermore, Ethiopia has a broad market with the second largest population in Africa. Thus, it supplied investors with low coast and a decent wage. About 70 percent of the total population is below the age of 30 which is supposed to be a great potential for continued growth of the domestic purchasing in addition to the labor force.
The country is also well situated to exploit several markets. Ethiopia is a member of Common Market for Eastern and Southern Africa (COMESA) which enables it to access to 19 member countries and their population of more than 450 million. The country is also exploiting Duty-Free and Quota Free privileges extended by international markets of USA, European Union, China, and India. Investment in Ethiopia is taking place from various countries mainly involving Europe, Asia, Middle East, North America, Africa, and others. The diversified sources of investment is a good opportunity to exchange experience, transfer technology and engage in various sectors.
Investment in Ethiopia is also taking place in various sectors, such as manufacturing, construction, agriculture, real estate renting and services. The government is also vigorously working to expand investment infrastructure setting ambitious plan that will significantly upgrade both hard and soft infrastructures.
According to data obtained from the Investment Commission, the country has built more than 71,000 Km new roads including all-weather roads from kebele administrations to an express way linking Addis with Adama, 2,395 new rail way linking Addis Ababa with Djibouti, stretching 132,000 KM new electricity distribution line, expanding the water supply infrastructure to cover 99 percent population and the drilling of some 3000 water wells per year, power supply and telecom services.
Moreover, be it as it may, there are several comparative and competitive advantages to invest in Agro-Food Processing (AFPI). As one can see the resource endowments for AFPI development, the country is110.43 million hectares in terms of total area of which the 100 million hectare (90%) is a land area. As documents from the Policy Study and Research Center, the country’s farm land has increased from 30.5 million hectares to that of36 .5 million during the course from 2002 to 2012.
The arable land which was 9.9 million hectare in 2002 has grown stepwise to 15.4 million hectares in 2012. Besides, the current irrigation scheme is reported to cover about 640 thousand hectares, which based on the current arable land area takes only 4 to 5 percent share. It is also estimated that the country possesses a potential irrigable land area of 5.3 million hectares given that modern technology and all potential forms of water resources are used.
Ethiopia is known for climatic heterogeneity due to its proximity to the equator and an extensive altitude range which in turn made the country to be the home of numerous climatic futures suitable for different agricultural production. The counties heterogeneous climatic feature ranging from Dalol, one of the hottest places in the world and Ras Dshen, a frigid mountain made the country suitable not only for different agricultural production but also raring of different animals.
Hearald January 17/2019
BY LAKACHEW ATINAFU
