The Role of the Government to Support & Promote Private Sector Development in                  Africa          The Case of...
The National Development Path• Ethiopia is a country endowed with diverse natural  resources, 2nd largest populous country...
• Agriculture is the main stay of its economy, which  constitutes 40 % of employment and more than 60 % of exporter earner...
Legal and administrative    frameworks• The constitution protects Private property;• Ownership of multiple businesses is a...
Support structures• Associations: leather, textile, major exporters  association, Chambers of Commerce;• Centres of Excell...
Investment Incentives• 100% duty free privilege for construction equipment and 15%  worth of spare parts to be allotted to...
• Remittance – investment profits, dividends, payments to loads to  foreign banks and buying of technology transfer;• Enco...
Export Incentives• Export Credit Guarantee Scheme• Duty Drawback Scheme• Foreign Exchange Retention Scheme• Franco Valuta ...
Outcomes has become the major source of• The private sector  employment;• Competitiveness and growth;• Youth employment on...
Thank You            Hirut ZemeneTrade & Investment Minister Counsellor          Embassy of Ethiopia    e: hirut@ethioemba...
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Hirut zemene the role of the government to support private sector - ethiopia

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Hirut zemene the role of the government to support private sector - ethiopia

  1. 1. The Role of the Government to Support & Promote Private Sector Development in Africa The Case of Ethiopia Entrepreneurship and Economic Development in Africa Embassy of Ethiopia 10 march 2012 SOAS, London
  2. 2. The National Development Path• Ethiopia is a country endowed with diverse natural resources, 2nd largest populous country in Africa;• Ethiopia is on a fast track development, it has registered 11 % GDP growth over the past 7 years;• It aims to join middle income countries by 2025- meet MDGs Goals by 2015;• The country’s successive 5 year development plans have given due emphasis to Private sector development;• Ethiopia has advanced a free market economy in the past two decades;• Private sector is an engine of the economy;
  3. 3. • Agriculture is the main stay of its economy, which constitutes 40 % of employment and more than 60 % of exporter earner;• It is the major source of private sector development;• Ethiopia is a country of small holder farmers managing their own private property;• Hence, entrepreneurship is a deep rooted culture;• The current 5 year plan emphasises on SME and industrialization;• This constitutes of an expansion of the private sector both in the urban and rural areas;
  4. 4. Legal and administrative frameworks• The constitution protects Private property;• Ownership of multiple businesses is allowed;• Relaxation of quota and tariff restrictions on trade;• Investment Code – with a number incentives;• Micro finance – one of the largest micro- finances is found Ethiopia (provision of seed money for small businesses and farmers)• Protection of local businesses;• Intellectual Property Rights;• Almost non-existent corruption;
  5. 5. Support structures• Associations: leather, textile, major exporters association, Chambers of Commerce;• Centres of Excellence: metallurgy, Leather, textile, agriculture, horticulture support centres, commodity exchange market• Privatization: more than 60 companies are out there for privatization• Education: TVET #253and higher learning institutions #32;• SMEs: from MSEs to SMEs;• Dialogue: high-level dialogue with the private sector;
  6. 6. Investment Incentives• 100% duty free privilege for construction equipment and 15% worth of spare parts to be allotted to the initial stage of investment;• Exemption from income tax – 2 to 7 years tax holiday;• Loss carry forward- investors that suffer losses during the income tax holiday period, by the end of the term, get extension for half of the term;• Bank loans – on a 30-70% basis;
  7. 7. • Remittance – investment profits, dividends, payments to loads to foreign banks and buying of technology transfer;• Encourages increased flow of the Diaspora
  8. 8. Export Incentives• Export Credit Guarantee Scheme• Duty Drawback Scheme• Foreign Exchange Retention Scheme• Franco Valuta Import Facility• Bonded Manufacturing Warehouse Scheme
  9. 9. Outcomes has become the major source of• The private sector employment;• Competitiveness and growth;• Youth employment on the rise;• Backward and forward linkages;• Work ethics and innovation;• Flourishing of towns;• Poverty headcount reduced by half in the past 10 years;• Local capacity development, engineering, business, agro- processing;• On the right path to meet MDGs Goals and target of being a Middle Income Country.
  10. 10. Thank You Hirut ZemeneTrade & Investment Minister Counsellor Embassy of Ethiopia e: hirut@ethioembassy.org.uk
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