Ethiopia hopes to nurture the investment environment with its amended investment proclamation amid the impact of COVID-19.
The impact of the coronavirus is having a profound and serious impact on the global economy and has sent policymakers looking for ways to respond.
It is recalled that about a week ago Ethiopian Airlines has announced suspending 30 flights and losing $190 million because of the coronavirus pandemic.
At the same time investment and tourism sector is severely affected by the spread of the virus. Ethiopia is among the top FDI recipients in the horn of Africa. To attract more investment and create conducive climate for both foreign and local investors the government amended and ratified investment law.
The participation of private sector is essential and backbone for the growth of the economy.
Public Relations Director of the Ethiopian Investment Commission (EIC) Mekonnen Hailu, The Ethiopian Herald, said that the new investment law is revised by considering the global investment climate.
The previous law somewhat was restrictive to foreign investment in certain sectors to protect local enterprises. However, the amended law allows foreign investors to take part in various areas that were restricted before.
On the other hand the current outbreak of the virus is hindering the investment flow and tourism sector as well. The government’s growth strategy calls for structural reforms designed to strengthen the private sector, boost competition, and increase investment which is essential and decisive to speed up the end of Ethiopia’s long reliance on state-led economic development.
He explained that currently, the pandemic has significantly reduced the volume of exports, particularly horticulture products. At the same time it has been affecting investment activities locally and the export of products such as horticulture.
Considering the past the commission amended investment which helps to attract FDI. The ratification of the law is expected to add momentum to Ethiopia’s reform efforts by attracting the private sector, diffusing new technology and expertise. The new law, which updates investment proclamation, consolidates reforms and confirms that many of the economic sectors to be open for private sectors.
The objectives of the new investment law are primarily to enhance the competitiveness of the national economy by promoting investments in productive and enabling sectors.
Ethiopia is among the top FDI recipient in Africa and top destination in the Horn of Africa. With the recent reform and privatization of state-owned companies FDI is expected to increase significantly going beyond the previous year.
Privatization will speed up the economy and the newly amended investment law will enable the country to create more employment opportunities for its citizens, advance the transfer of knowledge, skills and technology required for the development of the country. Moreover, it would increase foreign exchange earnings by encouraging the expansion in volume, variety and quality of the country’s export products and services.
The Ethiopian Herald April 4/2020
BY HAILE DEMEKE
