Ethiopia has been attracting high amount of FDI for consecutive years. It has been leading the continent and the region. Ethiopia’s encouraging incentives for investors, and a predominantly younger population of the country, that offers affordable and easily trainable labor, among others, are the driving forces to the high inflow of FDI.
It has also competitive electrical power supply in the continent. Furthermore, its strategic geographical location at the crossroads of Africa and the Middle East also allows it to be preferred destination for FDI.
Above all these factors, Ethiopia needs to provide a good investment proclamation to promote its investment and increase FDI. Investment proclamation is a determinant legal framework in the investment activities of a country. A good proclamation enables the country to boost investment.
Surprisingly, it has been attracting such big investment with a proclamation that somehow lags behind in terms of providing modern and speedy service to investors. This is to mean that despite the record level of FDI it attracted, compared to countries in the region and continent, Ethiopia has not yet obtained the right amount of investment inflow compared to its potential.
There are many issues that it has to improve in order to further enhance its FDI inflow. One of the comments forwarded include revision of the current investment proclamation.
The proclamation was last updated seven years ago. Throughout the times customers complained about some irrelevant procedures and inefficiency in service delivery of the commission which is mainly related to the proclamation.
For example, the existing proclamation requires applicant investors to physically appear to the investment commission for registration and renewal, among others. In addition to the time wastage, the cost incurred only to obtain license and facilitate registration can be taken into consideration here.
Obviously, this is one of the many contents of the investment proclamation that clients could suggest to be improved. Possibly, there are likely to be many more suggestions to make the proclamation more conducive.
The commission’s effort to issue a new proclamation is a commendable and timely one. At a time Ethiopia is undergoing massive and deep reform process, the issue of coming up with a new and modern legal framework for a better performance in the field of investment is mandatory.
According to the Commission, the draft new proclamation has incorporated some of the burning issues of investors that were hampering their smooth operations for years. The draft will be tabled for discussion with stakeholders today.
Hence, investors and scholars in the field should take this timely opportunity to forward all their concerns and suggestions regarding investing in Ethiopia. Inputs of those in the field are valuable to put in place a better legal framework of investment for the country.
The Ethiopian Herald July6/2019
