Introduction

Ethiopia is one of the oldest nations in the world with long history, ancient civilisation and deeply rooted cultural values. Ethiopians are hospitable, law-abiding and tolerant. Ethiopia is the second most populated country in sub-Sahara Africa and is strategically located in Northeast Africa at the crossroads between Africa, the Middle East and Asia. Addis Ababa the capital of Ethiopia is host to the African Union (AU), United Nations Economic Commission for Africa (UNECA), and several other regional and international organisations also have their headquarters and branch offices in the Capital.

Investment Climate

Ethiopia enjoys a stable political environment with good democratic governance. Its democratic constitution guarantees fundamental freedoms and rights, including freedom of association, press and freedom to undertake business and own property in Ethiopia. Significant steps have been taken to transform the economy through liberalization, deregulation and privatisation measures. There have been major positive changes in the government’s policy towards the market economy in general and foreign investment in particular. The investment code has been revised two times to make it compatible with changing domestic and international economic environments. Ethiopian Investment Authority has also been established to fully implement the code, oversee the investment activities and provide a one-stop shop to facilitate entry of foreign investors.

Ethiopia is endowed with wide-ranging agro-ecological zones and diversified resources and all types of cereals, fibre crops, oil seeds, coffee, tea, fruits and vegetables are grown in the country. The potential for irrigated agriculture is estimated at 3.5 million hectares. Ethiopia has the largest livestock resources in Africa, and fisheries and forestry resources are also significant. Hence, considerable opportunities exist for private investment in the production and processing of agricultural crops and resources.

The manufacturing sector, which is now at an early stage of development, offers attractive potential benefits to prospective investors in food and beverages, leather and textiles, chemical and paper, electrical and electronics, building materials, non-metallic minerals and metallic industries sub-sector.

Ethiopia offers excellent scope for mineral prospecting and development. The country is blessed with good deposits of gold, tantalum, platinum, nickel, potash and soda ash. Besides construction and industrial minerals such as marble, granite, limestone, clay, gypsum, gemstones, iron ore, coal, copper, silica, etcetera exist in Ethiopia.

In the tourism sector, the country’s unique cultural heritage, magnificent scenery, pleasant climate, rich flora and fauna, important archaeological and historical sites and friendly and hospitable people, put the country among the leading tourist destinations in Africa. These tourism potentials clearly show the existence of huge opportunities for private investment in hotels, lodges and international restaurants.

In a nutshell, the main business sectors in which Ethiopia is seeking foreign investment are manufacturing, agriculture, real estate development, education and health services, first grade construction contracting, mining and quarrying of gold, marble and granite, engineering and management consultancy. For further information contact the Ethiopian Investment Authority at www.ethioinvestment.org.

Ethiopia – India Relations

Trade and economic relations between Ethiopia and India date back centuries when the Indian Ocean served as a main highway for commercial and cultural interaction between the two countries. These age-old ties have been further strengthened by measures undertaken in the past few decades. The relationship was given great fillip on 12 November 1982 when the two countries signed a bilateral trade agreement that laid down the framework of cooperation to expand and further develop the trade relations between the two countries.

Furthermore, in view of growing realisation of the need to diversify and further strengthen the bilateral economic relations, particularly in the area of trade and investment, the following cooperation agreements have been signed and are now under implementation:

Memoranda of Understanding have also been signed between the following entities: Ethiopian Investment Authority and Indian Investment Centre; Federal Micro and Small Enterprises Development Agency of Ethiopia and the Federation of Indian Micro and Medium Enterprises (FISME); The Ethiopian Private Industries Association and Confederation of Indian Industry (CII); Addis Ababa Chamber of Commerce and CII; and, Addis Ababa Chamber of Commerce and Indo-African Chamber of Commerce.

In the last six years trade between the two counties has witnessed steady growth from US$ 58,566,700 in 1997, to US$ 80,199,944 in 1998, to US$ 97,312,787 in 2000, and over 100 million thereafter. In the same period India’s exports to Ethiopia increased from US$ 57,155,801 to US$ 90,075,176, whereas Ethiopia’s exports to India, which was to the tune of US$ 7,237,011 in 2000, reached US$ 18 million in the month of July 2002.

Ethiopia’s exports to India include semi-processed hides and skins, pulses, natural gum, oilseeds and spices, and there is a potential to expand exports to include raw coffee, tea, marble, minerals, cotton, textile, leather products, gemstones, sugar and others.

In areas of industrial cooperation, a wide-range of Indian companies are showing mounting interest in setting up projects in Ethiopia either wholly or in joint collaboration with domestic entrepreneurs. Since issuance of the new investment code in 1992, approximately twenty-seven Indian companies have been issued an investment licence to undertake manufacturing. Projects in the manufacturing sector include galvanised sheet, plastic, soap, nails, corrugated paper boxes, industrial gasses, mineral water plant, yarn, paint and others.

Some Indian companies are actively participating in infrastructure projects especially in road and water sectors consultancy. It is widely believed that Indian companies by availing their expertise and experience in these sub-sectors could take advantage in participating in a number of projects in Ethiopia. Besides this, enormous prospects exist for prospective Indian investors in agro-industries, leather and leather products, garment, machinery for light industry, disposable syringes, processing of oil seeds, assembly of tractors, chemical dyes for leather and textiles, manufacturing industries, construction, mining, hotel and tourism, small scale industry, commercial farming, health, human resource development sectors, and we look forward to a mutually beneficial and further strengthened economic relationship between Ethiopia and India.

Ethiopia Country Data