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ETHIOPIA: A NEW HORIZON OF HOPE
Ethiopia at a glance
Federal government structure
9 semi-autonomous regions; 2 chartered cities
Parliamentary system
Governance
structure
Federal Democratic Republic of
Ethiopia
Official Name
Horn of Africa, at the crossroads
between Africa, the Middle East
and Asia
GDP- 84.35 USD Bn
GDP growth rate: 10%
Economics
Population: ~105 Mn (2017), second most
populous country in Africa
Population growth (annual %)- 2.5%
Life expectancy- 65 years
Demographics
Location
1.1 million square kilometers
Area
▪ Prime Minister: Dr Abiy Ahmed
▪ Head of Government
▪ President: Sehale-Work Zewde
▪ Head of State
Ethiopia’s economy has registered double digit economic growth successively for
over a decade and half asserting itself as one of the world’s fastest growing economy
6.3%
6.4%
7.0%
7.4%
10%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%
Ghana
Tanzania
Senegal
Cote d'Ivoire
Ethiopia
Total FDI inflow & share of manufacturing FDI 2006/07 - 2016/17 (in USD million)
Source: Ethiopian Investment Commission: National Bank of Ethiopia, USAID - Ethiopia Performance Monitoring and Evaluation Service (EPMES) 2017
Four folds increase in FDI flow has been registered over the last 5 years (from a little
over 1 billion USD to more than 4.2 billion USD)
4
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
Total FDI Manufacturing FDI
As one of the largest recipient of FDI in Africa, Ethiopia has attracted several global
brands highlighting competitive investment opportunities
5
So what efforts is the country taking to sustain this momentum?
Ethiopia has undergone significant changes over the last year; opening up of the
economy is currently underway
Doing Business
reforms
▪ National initiative to improve
Ethiopia’s ease of doing
business launched by PM Dr.
Abiy Ahmed
▪ More than 80 reforms, vision
to place Ethiopia amongst the
top 100 countries on WB’s
Ease of Doing Report
Investment legal
reform
▪ Efficient, transparent,
predictable and modern
investment regulatory and
administrative framework
▪ Further open up investment
areas to private sector
Investment and Job
Steering Committee
▪ Forging an enabling
environment to create a
productive and
competitive private sector
that creates jobs for the
youth and lower youth
unemployment
Several reforms underway to create a predictable, transparent and efficient
regulatory framework
Regional economic
integration
▪ Signature to AfCFTA, which
unlocks market access
potential of 1.2 billion
people
The country has also taken leadership in building a positive political landscape in the
region
1 Targeted investment in priority areas
KEY GOVERNMENT STRATEGIES TO ATTAIN VISION
DEEP DIVE FOLLOWS
3
2
4
Development of world-class industrial parks fitted with
sustainable infrastructure
Conducive enabling environment
Tailored incentives
The country has set the vision to become the leading manufacturing hub of Africa
and a preferred destination for FDI by 2025
1
Agro-processing
• Land size and climate: 8th largest in Africa and 27th in
the world; large arable land, diverse topography and agro-
climatic zones, a long growing season, fertile soils and
water availability for irrigation
• Birthplace of coffee: Regional leading producer and
exporter of coffee Arabica and 5th in the world)
• Livestock: Regional lead and among top 10 in the world-
immense potential in meat processing and dairy sector
• Continental lead in honey and beeswax production
• Variety of different sesame seeds which are highly valued
on the international market. Production of sesame in the
country has doubled in the past five years.
Horticulture
• Flowers: 4th largest non-EU exporter to the EU cut-
flower market and the 2nd largest flower exporter from
Africa
• Fruits and Vegetables: Land able to grow tropical and
sub-tropical, temperate fruits, as well as majority of
vegetables; Land suitable for organic certification
• Herbs and Spices: 122,700 Has being used for spice
farming, with spice production reaching 244,000 tons
per year (Potential of 200,000 hectares)
Strategic priority areas have been identified for FDI attraction and export promotion
Textile and Apparel
• Potential to develop a competitive cotton or textiles industry:
potential for backward and forward linkage
• 54 million trainable workforce with competitive wages, cheap
electricity
• Strategically located with easy access to international value
chains with access to a state-of-the-art container port (Djibouti)
• Duty-free and quota free access to the European Union (EU)
and U.S. markets through the African Growth and Opportunity
Act
• Investment Opportunities
• Ginning, integrated textile mills, spinning, weaving and/or
knitting, dyeing and printing,
• Production of garments; the manufacturing of knitted and
crocheted fabrics, carpets, and sportswear, among others
Leather and leather products
• Regional lead in livestock population (9th from the world):
+53 million Cattle, 25.5 million Sheep and 24.1 million Goat
population: only 50% of hides and skins potential are being
utilized
• Potential for price competitive and quality supply of skins
and hides: Ethiopia’s highland sheepskins have a worldwide
reputation in terms of quality, thickness, flexibility, strength,
compact structure, and a clean inner surface.
• Investment Opportunities
• Tanning of hides and skins up to finished level;
• Manufacturing of luggage (such as handbags), saddle
and harness items, footwear, and garments; and
• Integrated tanning and manufacturing activities.
1 Strategic priority areas have been identified for FDI attraction and export promotion
1
Tourism
• Located in the horn of Africa’s rift valley region and
best known worldwide for being the origin of
mankind and one of the oldest civilizations
• Home to several cultural and historical heritage sites,
nine of which are included in the UNESCO list of world
heritage.
• In addition, Addis Ababa’s significance as the political
capital of Africa brings high representation of
international and regional organizations, including the
seat of the African Union and the United Nations
Economic Commission for Africa.
ICT
• Identified as strategic priorities by the Government of
Ethiopia as it will drive and facilitate the
transformation of Ethiopia's predominantly
subsistence-agriculture economy to into an
information and knowledge-based economy and
society, that is effectively integrated into the global
economy.
• Tailored industrial park has been dedicated to the
sector
Strategic priority areas have been identified for FDI attraction and export promotion
1
Energy
• Rapidly growing electricity demand at 30-35% annually;
Growing population, 13+ industrial parks requiring more than
1700 MW of electricity, electric powered national railway
requiring over 4,500 KM, plans of exporting power to Kenya,
Tanzania, Sudan and Djibouti
• More than 80 GW of exploitable renewable energy reserves;
 45 GW of Hydro power exploitable energy reserves,
>80% is unexploited;
 7 GW of Geothermal exploitable energy reserves, >86%
is unexploited; and
 An average of 5.5 kwh/m2/day of Solar energy
capability, >98% is unexploited
• Low electricity access provides opportunity for off-grid
solutions; Over 95% of rural areas and over 14.3 million
households are without the access to power.
Mining
• Ethiopia has a wide variety of untapped mineral resources
and offers opportunities in upstream and downstream
operations.
• Ethiopia is the only producer of opal in Africa, major gold
exporter, and emerging country for oil and natural gas
exploration.
• Mining potentials: gold, potash, platinum, opal, iron,
tantalum, marble, granite, limestone etc
Strategic priority areas have been identified for FDI attraction and export promotion
1
Pharmaceuticals
• Growing local market: Ethiopia’s pharmaceutical market is
expected to grow by 15% annually and reach $ 1 billion by
2020
• Accessible local and regional market: Ethiopia has the
potential to serve as an export hub for the > $ 20 billion
pharmaceutical markets in Africa
• Trainable workforce with competitive wages
• More than 10 schools of pharmacy in Ethiopia are planning to
expand with sector specialization programs
• Availability of tailored investment incentive schemes towards
the pharmaceutical sector and industrial park development
• A big demand and supply gap for pharmaceutical products,
with only a few local manufacturers covering < 20% of the
demand
Strategic priority areas have been identified for FDI attraction and export promotion
Industrial Parks:
Catalyst to drive Ethiopia’s
industrialization agenda
2 Several plug-and-play Industrial Parks are being developed through out the country
Africa’s 1st park with zero
liquid discharge facility (ZLD)
2 Sustainability is integral element of the parks
Electric-powered Railway
to ease logistics
Africa’s 1st electric-powered railway
Development of world-class industrial parks fitted with sustainable infrastructure
Massive investment has also been made in infrastructure development in support of
industry (1/3)
2
Ethiopian Airlines – Cargo hub
Largest cargo network and terminal in Africa
Massive investment has also been made in infrastructure development in support of
industry (2/3)
2
Green electricity generation supports industrialization
cost-competitive, renewable and
clean energy
Development of world-class industrial parks fitted with sustainable infrastructure
Massive investment has also been made in infrastructure development in support of
industry (3/3)
2
 Income Tax exemptions
 Custom tax exemptions
 Loss carry forward
 Full export duty exemption
 Guarantee against expropriation
 Guarantee for repatriation of
funds
 Customs facilitation through
bonded export factory and
similar other schemes
 Relaxed Industrial park land
regime
 One-Stop Shop Service
 Expedited procedure for securing
visa, work permit and certificate
of residency
 Facilitation of market linkages
NON-FISCAL
FISCAL OTHER
Tailored and competitive incentives
Tailored and competitive incentives are provided to foreign investors
3
21

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20190819EthiopianInvestmentCommissionpresentation.pptx

  • 1. ETHIOPIA: A NEW HORIZON OF HOPE
  • 2. Ethiopia at a glance Federal government structure 9 semi-autonomous regions; 2 chartered cities Parliamentary system Governance structure Federal Democratic Republic of Ethiopia Official Name Horn of Africa, at the crossroads between Africa, the Middle East and Asia GDP- 84.35 USD Bn GDP growth rate: 10% Economics Population: ~105 Mn (2017), second most populous country in Africa Population growth (annual %)- 2.5% Life expectancy- 65 years Demographics Location 1.1 million square kilometers Area ▪ Prime Minister: Dr Abiy Ahmed ▪ Head of Government ▪ President: Sehale-Work Zewde ▪ Head of State
  • 3. Ethiopia’s economy has registered double digit economic growth successively for over a decade and half asserting itself as one of the world’s fastest growing economy 6.3% 6.4% 7.0% 7.4% 10% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Ghana Tanzania Senegal Cote d'Ivoire Ethiopia
  • 4. Total FDI inflow & share of manufacturing FDI 2006/07 - 2016/17 (in USD million) Source: Ethiopian Investment Commission: National Bank of Ethiopia, USAID - Ethiopia Performance Monitoring and Evaluation Service (EPMES) 2017 Four folds increase in FDI flow has been registered over the last 5 years (from a little over 1 billion USD to more than 4.2 billion USD) 4 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Total FDI Manufacturing FDI
  • 5. As one of the largest recipient of FDI in Africa, Ethiopia has attracted several global brands highlighting competitive investment opportunities 5 So what efforts is the country taking to sustain this momentum?
  • 6. Ethiopia has undergone significant changes over the last year; opening up of the economy is currently underway
  • 7. Doing Business reforms ▪ National initiative to improve Ethiopia’s ease of doing business launched by PM Dr. Abiy Ahmed ▪ More than 80 reforms, vision to place Ethiopia amongst the top 100 countries on WB’s Ease of Doing Report Investment legal reform ▪ Efficient, transparent, predictable and modern investment regulatory and administrative framework ▪ Further open up investment areas to private sector Investment and Job Steering Committee ▪ Forging an enabling environment to create a productive and competitive private sector that creates jobs for the youth and lower youth unemployment Several reforms underway to create a predictable, transparent and efficient regulatory framework Regional economic integration ▪ Signature to AfCFTA, which unlocks market access potential of 1.2 billion people
  • 8. The country has also taken leadership in building a positive political landscape in the region
  • 9. 1 Targeted investment in priority areas KEY GOVERNMENT STRATEGIES TO ATTAIN VISION DEEP DIVE FOLLOWS 3 2 4 Development of world-class industrial parks fitted with sustainable infrastructure Conducive enabling environment Tailored incentives The country has set the vision to become the leading manufacturing hub of Africa and a preferred destination for FDI by 2025
  • 10. 1 Agro-processing • Land size and climate: 8th largest in Africa and 27th in the world; large arable land, diverse topography and agro- climatic zones, a long growing season, fertile soils and water availability for irrigation • Birthplace of coffee: Regional leading producer and exporter of coffee Arabica and 5th in the world) • Livestock: Regional lead and among top 10 in the world- immense potential in meat processing and dairy sector • Continental lead in honey and beeswax production • Variety of different sesame seeds which are highly valued on the international market. Production of sesame in the country has doubled in the past five years. Horticulture • Flowers: 4th largest non-EU exporter to the EU cut- flower market and the 2nd largest flower exporter from Africa • Fruits and Vegetables: Land able to grow tropical and sub-tropical, temperate fruits, as well as majority of vegetables; Land suitable for organic certification • Herbs and Spices: 122,700 Has being used for spice farming, with spice production reaching 244,000 tons per year (Potential of 200,000 hectares) Strategic priority areas have been identified for FDI attraction and export promotion
  • 11. Textile and Apparel • Potential to develop a competitive cotton or textiles industry: potential for backward and forward linkage • 54 million trainable workforce with competitive wages, cheap electricity • Strategically located with easy access to international value chains with access to a state-of-the-art container port (Djibouti) • Duty-free and quota free access to the European Union (EU) and U.S. markets through the African Growth and Opportunity Act • Investment Opportunities • Ginning, integrated textile mills, spinning, weaving and/or knitting, dyeing and printing, • Production of garments; the manufacturing of knitted and crocheted fabrics, carpets, and sportswear, among others Leather and leather products • Regional lead in livestock population (9th from the world): +53 million Cattle, 25.5 million Sheep and 24.1 million Goat population: only 50% of hides and skins potential are being utilized • Potential for price competitive and quality supply of skins and hides: Ethiopia’s highland sheepskins have a worldwide reputation in terms of quality, thickness, flexibility, strength, compact structure, and a clean inner surface. • Investment Opportunities • Tanning of hides and skins up to finished level; • Manufacturing of luggage (such as handbags), saddle and harness items, footwear, and garments; and • Integrated tanning and manufacturing activities. 1 Strategic priority areas have been identified for FDI attraction and export promotion
  • 12. 1 Tourism • Located in the horn of Africa’s rift valley region and best known worldwide for being the origin of mankind and one of the oldest civilizations • Home to several cultural and historical heritage sites, nine of which are included in the UNESCO list of world heritage. • In addition, Addis Ababa’s significance as the political capital of Africa brings high representation of international and regional organizations, including the seat of the African Union and the United Nations Economic Commission for Africa. ICT • Identified as strategic priorities by the Government of Ethiopia as it will drive and facilitate the transformation of Ethiopia's predominantly subsistence-agriculture economy to into an information and knowledge-based economy and society, that is effectively integrated into the global economy. • Tailored industrial park has been dedicated to the sector Strategic priority areas have been identified for FDI attraction and export promotion
  • 13. 1 Energy • Rapidly growing electricity demand at 30-35% annually; Growing population, 13+ industrial parks requiring more than 1700 MW of electricity, electric powered national railway requiring over 4,500 KM, plans of exporting power to Kenya, Tanzania, Sudan and Djibouti • More than 80 GW of exploitable renewable energy reserves;  45 GW of Hydro power exploitable energy reserves, >80% is unexploited;  7 GW of Geothermal exploitable energy reserves, >86% is unexploited; and  An average of 5.5 kwh/m2/day of Solar energy capability, >98% is unexploited • Low electricity access provides opportunity for off-grid solutions; Over 95% of rural areas and over 14.3 million households are without the access to power. Mining • Ethiopia has a wide variety of untapped mineral resources and offers opportunities in upstream and downstream operations. • Ethiopia is the only producer of opal in Africa, major gold exporter, and emerging country for oil and natural gas exploration. • Mining potentials: gold, potash, platinum, opal, iron, tantalum, marble, granite, limestone etc Strategic priority areas have been identified for FDI attraction and export promotion
  • 14. 1 Pharmaceuticals • Growing local market: Ethiopia’s pharmaceutical market is expected to grow by 15% annually and reach $ 1 billion by 2020 • Accessible local and regional market: Ethiopia has the potential to serve as an export hub for the > $ 20 billion pharmaceutical markets in Africa • Trainable workforce with competitive wages • More than 10 schools of pharmacy in Ethiopia are planning to expand with sector specialization programs • Availability of tailored investment incentive schemes towards the pharmaceutical sector and industrial park development • A big demand and supply gap for pharmaceutical products, with only a few local manufacturers covering < 20% of the demand Strategic priority areas have been identified for FDI attraction and export promotion
  • 15. Industrial Parks: Catalyst to drive Ethiopia’s industrialization agenda 2 Several plug-and-play Industrial Parks are being developed through out the country
  • 16. Africa’s 1st park with zero liquid discharge facility (ZLD) 2 Sustainability is integral element of the parks
  • 17. Electric-powered Railway to ease logistics Africa’s 1st electric-powered railway Development of world-class industrial parks fitted with sustainable infrastructure Massive investment has also been made in infrastructure development in support of industry (1/3) 2
  • 18. Ethiopian Airlines – Cargo hub Largest cargo network and terminal in Africa Massive investment has also been made in infrastructure development in support of industry (2/3) 2
  • 19. Green electricity generation supports industrialization cost-competitive, renewable and clean energy Development of world-class industrial parks fitted with sustainable infrastructure Massive investment has also been made in infrastructure development in support of industry (3/3) 2
  • 20.  Income Tax exemptions  Custom tax exemptions  Loss carry forward  Full export duty exemption  Guarantee against expropriation  Guarantee for repatriation of funds  Customs facilitation through bonded export factory and similar other schemes  Relaxed Industrial park land regime  One-Stop Shop Service  Expedited procedure for securing visa, work permit and certificate of residency  Facilitation of market linkages NON-FISCAL FISCAL OTHER Tailored and competitive incentives Tailored and competitive incentives are provided to foreign investors 3
  • 21. 21

Editor's Notes

  1. “Stellar FDI performance” (World Bank) Led by investment in manufacturing sector Top 3 FDI destination in Africa (UNCTAD 2017) 2nd largest recipient of FDI in the apparel & textile industry (UNCTAD 2017)
  2. “Stellar FDI performance” (World Bank) Led by investment in manufacturing sector Top 3 FDI destination in Africa (UNCTAD 2017) 2nd largest recipient of FDI in the apparel & textile industry (UNCTAD 2017)
  3. “Stellar FDI performance” (World Bank) Led by investment in manufacturing sector Top 3 FDI destination in Africa (UNCTAD 2017) 2nd largest recipient of FDI in the apparel & textile industry (UNCTAD 2017)
  4. “Stellar FDI performance” (World Bank) Led by investment in manufacturing sector Top 3 FDI destination in Africa (UNCTAD 2017) 2nd largest recipient of FDI in the apparel & textile industry (UNCTAD 2017)