ADDIS ABABA – The United Nations Conference on Trade and Development (UNCTAD) report stated that Ethiopia is the top Foreign Direct Investment (FDI) recipient in Eastern Africa and 5th among the largest FDI destination in the continent.
According to the report, FDI inflow in Ethiopia during 2018 was 3.3 billion USD. As number of industrial parks established and assuming recovery in global FDI flows is expected to attract greater amount of FDI inflow in 2019, it stated.
Dr. Tesfachew Tafere, Former Director, Africa Least Developed Countries and Special Programmes said that Ethiopia is still the biggest FDI recipient in the Eastern Africa and the fifth largest FDI destination in a whole Africa in 2018.
The report expects global FDI flows in general to see rebound in developed economies as the effect of the tax reforms in the US winds down. Trade tensions between major economies also pose a downward risk for 2019 and beyond.
According to Tesfachew, efforts are underway in Ethiopia to simplify and streamline administrative procedures for starting business and implementing investment projects.
Current global trade and investment policy with rising protectionism, tariff wars, shifting trade preferences and the prevalence of regional economic cooperation can significantly affect the competitiveness of special economic zones.
Ethiopia is one of the few countries where the bulk of FDI inflow went into the manufacturing sector largely due to investment in industrial parks, he added.
Dr. Stephen Karingi, Regional Trade Division Director for his part said that there is no doubt FDI remains as one of the main sources of development finance for Africa.
And Africa needs to expand its intensification capacities for investment in order to close financial gap. In order to achieve its goal of structural transformation, it is necessary to boost domestic resource mobilization.
Special economic zones or industrial parks are policy instruments to attract investment, create jobs, promote exports, facilitate technology transfer and promote industrial development and structural transformation. Ethiopia is among the latest countries to establish industrial parks. As new comer, Ethiopia can learn many valuable lessons from other countries both successful and less successful ones, report noted.
In 2018, the total global FDI flows was 1.3 trillion USD that showed the continuation of the downward slide globally. Globally, FDI flows is projected to 1.5 trillion USD in 2019.
The Ethiopian Herald, June 13/2019
BY TSEGAYE TILAHUN
