Occupying the vast central part of the country, Oromia National Regional State, as the State names itself, takes the lion’s share in investment activities in Ethiopia. With its all types of geologies and diversified climate, the State is convenient to all kinds of investment mainly; agriculture, manufacturing, agro processing, service, tourism, mining and animals breeding among others, Wasihun Golga, Deputy Commissioner of the State’s Investment Commission said.
While approached by The Ethiopian Herald, the Deputy Commissioner said that the region is preferable by many investors for ample of reasons. Among these are its proximity to the central market, relatively better access to infrastructure such as road transport, electric power supply, telecom service, easily accessible and trainable man power among others make the region advantageous to be one of the top attractive in the country.
Blessed with all these features, Oromia National Regional State is well performing in attracting, accommodating and nurturing the investment sector. As per this, by the end of the last budget year, the commission has shown green light to 12,940 investment projects owned by foreign and local investors that registered 343.3 billion Birr and provided jobs for 614,261 citizens residing in the State, Wasihun said.
According to the Deputy Commissioner, Projects’ performance during the past six months of the current budget year is also successful. Projects licensed during the report period are 4,285 with the capital amount of 83 billion Birr that offered job for 313,565 citizens.
The State’s investment accommodation performance since its establishment up to the six months’ report of this budget year is appreciable. All together, 17,000 projects that registered over 420 billion Birr capital have been licensed and about 930,000 citizens have been offered job.
The leading projects registered such amount of capital are agriculture, agro processing, and the service sector whilst the manufacturing industry sector takes the lion’s share in bringing capital, saving foreign currency expenditure and creating vast jobs.
According to the Deputy Commissioner, the performance of the past budget year coupled with six months of this budget year has increased the total performance of the past 26 years by 50 percent.
“This achievement is attained due to historical decisions made following the national reform. Among these is the decision that considered farmers to be included in the investment projects who were displaced from their land because of development especially in the outskirts of big cities such as Fifine. Besides, there is a scheme in which the youth are able to be organized in small scale investments in the same areas. As per this over 3,500 projects were identified for the farmers and 316 projects for the youth as well,” he remarked.
Previously, the farmers used to be displaced in need of their land, on which their entire life depend, due to the investment projects without sufficient compensation and substitute means of livelihood. The directives on the ground prior to the reform valued the land more than the owners so that there were no arrangements to incorporate the farmers in the projects, he added.
Currently, however, this trend has been changed for good that the farmers become owners of their own properties and can engage in investment by own capital or joint venture instead of being chased barehanded from their land. Moreover, they are also privileged with the incentives of importing necessary inputs duty free.
As part of the scheme, follow up and support towards these projects are underway at the State level to assure their better fruitfulment and application in accordance with their intended target. The follow up and support scheme is a must do action because the investment sector is a key means to accelerate the State’s economic growth through hiring huge number of job seekers, bringing capital and earning foreign currency that the market needs.
On top of this, the State stretches its gorgeous hands for the investors via providing benefits of importing vehicles, machineries, construction materials and other essential inputs duty free by putting in place incentives as per the directive set by government.
As a result, the State’s investment commission had accomplished 60 percent of its plan for the year only in a quarter of the year. Doing so, the State takes the lion’s share in the nation’s investment activities, Wasihun said.
In line with this, the investors are also discharging their social corporate responsibilities such as building schools and clinics, extracting potable water, engaging the people in development activities and providing jobs among others for the communities dwelling in the surroundings of their investment. They also undertake environmental protection based on their agreement.
As of the Deputy Commissioner, apart from the region’s inviting nature for investment due to its location; in the central part of the country; proximity to the central market at the capital Addis that simplifies also export trade; the commission is doing its best to promote its potential for investment.
The promotion task is being carried out by identifying the sites convenient for agriculture, manufacturing, agro processing and other investment opportunities. Consequently, inviting the investors via different media outlets both regional and national; through programs and documentaries along with zoom video conference that portrays geological maps of the investment locations is underway. By the same token, existing investors can share their experience to new investors regarding the opportunities in the State, he added.
The invitation is posted for both local and foreign investors including the Diaspora community and foreigners of Ethiopian origin. Foreign investors directly communicate with the Ethiopian Investment Commission but they can access locations they are choosing to invest on through website ‘Invest at Oromia’. In order to simplify the process, the State has classified investment areas in to three zones ranking one up to three based on their accessibility for different infrastructure.
In line with this, aiming to provide efficient service, the commission has launched one stop service in collaboration with different concerned offices such as land management, construction, banking, and revenue among others to minimize the cost and fatigue the investors encounter while processing investment license.
Recognizing the investment issue is given special consideration by the State, the commission has signed memorandum of understanding with these concerned stakeholders ahead of time. Currently, the one stop service is available at eight selected towns in the Sate like Adama, Bishoftu, Dukem, Sebeta and others, Wasihun said.
Among the challenges the sector encounter are delay among some investors to swiftly engage into operation, keeping idle the land fenced for a long time or passing to third party in a rental form and lack of fully engagement in production process. The later is basically due to outer problems like infrastructure and financial deficit.
In this regard, the State and the Commission are striving to identify core problems and working accordingly to come up with appropriate solutions prioritizing the manufacturing sector. As a result, many projects become fully operational gaining consecutive follow up and support from the government side. For instance, in this fiscal year alone, about 200 projects have become fully operational receiving the assistance.
Wasihun said, however, that the recent unrest in some parts of Oromia have played adverse role in the partial or total destruction of private properties thereby enforcing investors to abandon investment projects.
The State government has been hugely engaged to tackle the situation and create enduring peace and stability as well as creating conducive business for both local and international companies. Furthermore, the government has rendered extensive support to enable damaged projects to commence operation and allowed them duty free importation of machineries and other equipment and entitled companies tax relief and extended their bank loan payment, Wasihun noted.
Besides, conducting public discussions in the presence of investors, the surrounding community and the youth have been underway and consensus was reached to enhance investors’ sense of ownership in the projects among the community and the investors to discharge their social responsibilities. Some complaints that were raised by both sides had been well entertained and given remedial solution for mutual benefit.
“Apart from the defaming news or rumors that are blown around meaning it is hard to invest in Oromia because of security threat, the investment inflow to the State has been increased in recent times as there is better condition in security and in the bureaucratic procedure and no one should hesitate to invest at Oromia,” the Deputy Commissioner assured.
BY BACHA ZEWDIE
The Ethiopian Herald May 1/2021
