BY ABEBE WOLDEGIORGIS
The relation between Ethiopia and Turkey reached to the level of best. Business and investment is growing. While Ethiopia exports agricultural products to Turkey, Turkey exports machinery, steel and iron to Ethiopia.
The recent visit by Deputy Prime Minister and Minister of Foreign Affairs Demeke Mekonen to Turkey will play a pivotal role in strengthening the two countries trade and investment relation, said Yaprak Alp, Turkish Ambassador in Ethiopia. As to her, Demeke’s discussion with Turkish officials in Estambul created a good opportunity to strengthen the 125 years old diplomatic relation.
According to the Ambassador,
the economic reform that has been undergoing in Ethiopia is very important and
her government follows closely. As Ethiopia is a very important regional
player, Turkey wants Ethiopia to be prosperous. The country’s economic growth
has spillover effects at the regional level and even beyond that.
Currently, Turkey has huge investment in Ethiopia. And two hundred companies have invested 2.5 billion US Dollar and created job opportunities for 25 thousand Ethiopians.
The Turkey Embassy here in Ethiopia advices companies to stay here for long because there is abundant natural resources to be exploited and human resources to be employed here with average labor cost. Side by side with this, the Embassy exerts its efforts to bring more Turkish investors to come and invest here.
As to the Ambassador, Turkey needs to see a functioning liberal economy flourish here and hopes that the ongoing economic reform will bring structural change.
Liberalizing the economy also makes things go much easier for investors and Ethiopia can draw lessons from Turkey in this regard. Currently, Turkish investors here in Ethiopia engaged in various garment, textile and agriculture and there are more expected to come here. Despite the break out of COVID 19 and the flare up of conflicts here and there, Turkish investors never showed reluctant not to continue their activities.
Ethiopia is one of the 17 African countries where Turkish investors are present. According to recent statistics the trade exchange between the two countries rose to 606 million US Dollar.
Both countries agreed to increase their trade volume to 1 billion US Dollar. As per the Ministry of Trade recent report, currently almost all of Ethiopia’s export earnings derives from primary agricultural products. From these primary products, the major export items from Ethiopia to Turkey from 2017 to 2020 are: oilseed followed by pulse, textile and garment products, coffee, spice, leather products, and others.
Top ten export commodities from Ethiopia to Turkey from 2017 to 2020 items are: oil seed, pulse, textile and garment, coffee, spice, others, flower, leather products, finished leather Though the export sector is still dominated by a few primary products, the contribution of value added products such as flowers, finished leather products, and chemicals & construction materials became foreign exchange earners for the country.
Additionally, the value of manufactured exports is at a low rate. Generally, the contribution to foreign exchange earnings of manufactured export has been limited and manufactured exports concentrated on a few consumer goods yet.
Ethiopia mainly imports from Turkey plastics and article thereof, machinery and mechanical appliance, iron and steel, articles of iron or steel, rubber and articles thereof, electrical machinery and equipment and parts, miscellaneous manufactured articles, aluminum and articles thereof, furniture, copper and articles thereof and many other manufactured products.
Top ten import items from Turkey to Ethiopia from 2017 to 2020 include: plastics and articles thereof, machinery and mechanical appliances, iron and steel articles of iron ore steel, rubber and articles thereof, electrical machinery and equipment and parts, miscellaneous manufactured articles, aluminum and articles thereof, furniture, copper and articles thereof.
As to the Ambassador, to conduct business and investment smoothly Turkey demands the establishment of preferential trade agreement with Ethiopia because the custom and tax laws to some extent inhibit boosting the trade as much as the Turkish want.
They also want more commodities to be exported to Turkey from Ethiopia for example coffee and sesame are the most consumable items in the Turkey market. Currently more than 85 million people in Turkey consume coffee and this indicates the high demand of coffee and the amount of money exporters could make. These products are also exported to Turkey from various countries all over the world because they have high demand there.
However, the delay for making preferential trade agreement inhibits Ethiopian coffee exporters from gaining more money. As the result, Turkey is forced to import coffee from Latin American countries. The flight from Addis Ababa to Turkey is only five hours; in this regard, Ethiopia has a comparative advantage to penetrate Turkish market by its agricultural products but unable to do so.
Ethiopian coffee quality is the highest in the world and this also provides the nation good opportunities to enter the outside market. Hence, liberalizing the economy can avoid the prevailed bureaucratic bottleneck and business could smoothly flourish.
As to the Ambassador in 2017, negotiation took place between the two countries’ high level officials with regard to establishing preferential trade agreement but still not yet finalized. Boosting trade relations could benefit both countries and to that end strengthening high level officials visit is essential.
There are also other areas that could boost trade and among others health tourism. Currently, many Ethiopians go to Thailand for medical treatment but they can find the treatment in Turkey which is nearer to Ethiopia. “Some assume that getting a visa in Turkey Embassy is very difficult but it is not true; the Embassy welcomes all who want to go to Turkey for various purposes,” said the Ambassador.
The Ethiopian Herald March 14/2021
