Ethiopia is emerging as a manufacturing hub and preferred investment destination in Africa due to its clear long-term vision, rapid economic growth, availability of trainable labor, and improving infrastructure. The country aims to become a middle-income economy by 2025 through manufacturing-led growth. Key sectors of opportunity include textiles and apparel, leather products, agribusiness, pharmaceuticals, and basic manufacturing. Ethiopia offers competitive wages, duty-free market access, and various investment incentives such as tax holidays, import duty exemptions, and one-stop facilitation services to attract investors. Several industrial parks are being developed across the country to support the growth of export-oriented manufacturing.

1. Ethiopia
Emerging Manufacturing Hub and
Preferred Investment Destination in Africa
2018

2. Why
Ethiopia?
Clear vision and strategy
Rapid and sustainable
economic growth
Trainable labour at
competitive rates
Favorable infrastructure and
market access
Areas of investment opportunity
1
2
4
3
5

3. Why
Ethiopia?
1 Clear vision and strategy

4. Vision 2025: Making Ethiopia the leading manufacturing hub
in Africa
 Middle income
 Average annual GDP growth of more than 10%
 Manufacturing growth for structural economic transformation
 Annual growth rate 25%
 Increase by 4 times to 20% of GDP
 Creating 2 million manufacturing jobs (200,000/year)
 Targeted investment Promotion: Key sectors, high-quality

5. Priority Sectors: Focus on Manufacturing Industries
Leather & leather
products
Agro-
processing
Industrial parks Pharmaceuticals
Construction
materials
Metal
engineering
…
Apparel & textile
Chemicals
Light Manufacturing Industries Basic Import
Substitutions

6. Why
Ethiopia?
2 Rapid and sustainable
economic growth

7. Fastest growing economy

8. Source: UNCTAD, World Investment Report 2018
Remarkable FDI performance – 2nd largest FDI recipient in Africa
according to UNCTAD

9. Pioneer Indonesian Investors located in Ethiopia (in textile and apparel,
food processing, chemical manufacturing etc)

10. High-level Commitment for Investment Promotion and
facilitation

11. Why
Ethiopia?
3 Trainable labour
available at competitive
rates

12. Demographic advantage• 100+ million population;
 World Rank #13
 Africa Rank #2
• Median age is under 20 -
large & young;
 Wages very competitive in
the world;
 Growing educated labor force
- 50+ Universities; 1,300+ TVETs
• Gov-supported industrial
skills trainings
12

13. Why
Ethiopia?
4 Competitive
infrastructure and market
access

14. Ethiopia is building mega infrastructure projects which
will capitalize its geographic and market access
advantages and boost investment
New electric railway connecting
industrial parks to Djibouti port
- 4-12 hour travel time
Africa’s aviation hub: daily flights
by Ethiopian Airlines to various
parts of Africa, Asia and Europe,
1. Accessible export market with proximity to European Union, U.S., Middle East, and Asia and
leading aviation industry
2. Duty-free Quota-free access to USA and EU; preferential market access to several countries
3. ACFTA with access to 1.2 billion population
Market access advantages
Several road projects such
as Addis-Adama express
way
Building Infrastructure as Path to Middle Income

15. Railway networks connecting important corridors of the
country – set to ease trade logistics
Coupled with recent reforms on trade logistics:
1.Access to Assab port – adds proximity and variety/options for access to sea
2.Privatization of ESLSE (among other SoEs – amined at enhancing quality
service provision through private sector participation)

16. Ethiopian Airlines
 Africa’s world-class and Star Alliance member,
 Fliesto 110+ international passenger and 40+
dedicated cargo destinations;
 Operates the largest cargo network and terminal in
Africa

17. Substantial investment in
electricity generation
Clean and new energy sources
(3 US cents/kwh)

18. Industrial Parks
Development
More than 10 Industrial Parks being developed through out the
country

19. Industrial
parks
anchor
principles
Specialized
parks
Export
Oriented
Vertical
Integration
Sustainab
ility
Skills
Developme
nt
19

20. Hawassa Industrial Park

21. Bole Lemi I Industrial Park
21

22. Kombolcha Industrial Park
22

23. Mekelle Industrial Park
23

24. Adama Industrial Park
24

25. Dire Dawa Industrial Park
25

26. Kilinto Industrial Park
26

27. Other industrial parks under development
Name Details
1 Debre Birhan Industrial
Park
Location: Debre Birhan
Cluster: Agro-processing
2 Jimma Industrial Park Location: Jimma
Cluster: leather and leather products
3 Adama II Industrial
Park
Location: Adama
Cluster: Textile and apparel
4 Bole Lemi II Industrial
Park
Location: Addis Ababa
Cluster: Textile and apparel
Expected to be finalized by April/June
2018
A number of investors including Soufflet,
Shints Suda group etc are in the pipline
to enter in to the park 27

28. Private industrial parks operational and under development
Name Details Investors in the park
1
Eastern Industrial Park
(Phase I and II)
Location: Dukem, 400 ha (total
size), 267 (Phase I operational)
Cluster: Mixed
Over 70 investors in
various manufacturing
sectors
2
George Shoe Industrial
Park
Location: Mojo. Size: 100ha
Cluster: leather and leather
products
George Shoe
3
CCCC - Arerti Industrial
Park
Location; Arerti: 100 ha (Phase I).
Cluster: building materials and
furniture
Under development
4 Huajian Industrial Park
Location: Lebu: 184 ha.
Cluster: Leather and leather
products and others
Huajian
5
CCECC – Dire Dawa
Industrial Park
Location: Dire Dawa – 1000 ha
Cluster: Mixed
Under development
28

29. Why
Ethiopia?
5 Areas of investment
opportunity

30.  Large land size and conducive
climatic conditions for cotton and
fibres production
 > 3.2 million hectares of land is
dedicated for cotton production
(<3% utilized so far)
 Easy access to industrial land
with promotional lease rate
 Abundant and trainable workforce:
labor costs 20% of China, lower
than other East African countries
 Globally competitive energy costs
(estimated at USD 0.03/kWh);
reliable green energy supply in
industrial parks
 Rich in supply of water
 Potential areas of operation
include:
 Integrated textile mills
 Spinning
 Weaving and/or knitting
 Dyeing and printing
 Garment factory
(knitted/woven)
1. Textile and Apparel – Opportunity for cost competitive and
vertically integrated manufacturing

31. 2. Leather - Ethiopia has one of the largest livestock population in
the world
Rawhides and Skin
According to FAOUN,
Ethiopia ranks 9th in the
global Raw hide and Skin
with the kill rate of:
•Cattle – 7%
•Sheep – 33%
•Goat – 33%
Thus, every year Ethiopia
produce:
•66,500 tones of salted hide
•20 million pcs of skins
Livestock
Ethiopia ranks 7th in the
global livestock population;
& according to CSA livestock
survey in 2016/2017,
•Cattle – 59,486,667
•Sheep – 30,697,942
•Goat – 30,200,226
Finished leather
• There are more than 33
tanneries
• Locally owned – 17
• Foreign owned tanneries
– 15
• Total annual finished
leather production
reaching between: 120-
135 million sq.ft
• Sheep and Goat – 80
million sq. ft.
• Cattle: 40 million sq. ft.
• Export: 60 million sq.ft
($69,552,960 dollar)
Footwear
• There are 16 local and 3
FDI footwear factories
• Total production: 7.81
pair pairs
• Export: 3.31 mil pairs
($38,567,000)
Gloves
• There are more than 30
factories with 19
exporting
• Total production: 1.3 mil
pieces
• Export: $2,555,000 dollar
Goods and Garment
• Three foreign owned
factories
• Total production: 1.5 mil
pairs1.26 mil pairs
• Export: 1.26 pairs
($5,004.56)
Source: Central Statistical Agency (2016) FAO (2016) LIDI (2016)

32. Ethiopia is:
-Africa’s leading producer and exporter of
coffee Arabica and ranks 5th in the world
-2nd largest flower exporting country in Africa
-Regional lead in livestock resource and
among top 10 in the world
-Continental lead in honey and beeswax
production.
Priority areas for investment: Horticulture
(flowers, fruits, vegetables and herbs),
plantation of cotton, palm tree, rubber tree,
coffee, tea, sugarcane, oilseeds, livestock,
apiculture, and high-value crops such as barley
for malting.
32
3. Agribusiness - Ethiopia has one of the largest livestock population
in the world

33. - Ethiopia is the first African country to
develop a national strategy for
pharmaceutical manufacturing (2015-2025)
- GoE encourages clusters - state of the art
Industrial Park specialized in
pharmaceutical manufacturing (kilinto)
- Growing pharma market both in Ethiopia (at
15% per year) and throughout Africa
- Opportunity to serve the African market by
locating in Ethiopia (creating regional export
hub)
- New and generous incentives package –
covering corporate income tax exemption,
personal income tax exemption, customs duty
exemption, price preference etc
33
4. Pharmaceuticals - Huge potential to substitute import and also
export

34. The proposed corporate income tax incentives are bolder than the current exemption scheme
and incentivize export in a way that is well-suited for the pharma sector
Active Pharmaceutical Ingredient (API) production
inside of industrial parks
In
Addis/surroundi
ng areas
Outside of
Addis/surrounding
areas
Base 8 years 10 years
30% export (in
terms of value,
successively for 3
years)*
+ 2 years + 2 years
60% export (in
terms of value,
successively for 3
years)*
+ 2 years + 2 years
TOTAL Up to 12 years Up to 14 years
Formulation/final medicine production inside of
industrial parks
In
Addis/surroundi
ng areas
Outside of
Addis/surroundin
g areas
Base 6 years 8 years
30% export (in terms
of value,
successively for 3
years)*
+ 2 years + 2 years
60% export (in terms
of value,
successively for 3
years)*
+ 2 years + 2 years
TOTAL Up to 10 years Up to 12 years
Pharmaceutical packaging production inside of industrial parks
In Addis/surrounding areas Outside of Addis/surrounding areas
Base 3 years 4 years
30% export (in terms of value, successively for 3 years)* + 2 years + 2 years
60% export (in terms of value, successively for 3 years)* + 2 years + 2 years
TOTAL Up to 7 years Up to 8 years
Wide-ranging incentives for pharma manufacturers located in IPs –
Business income tax exemption

35. Wide-ranging incentives for pharma manufacturers located in IPs –
other incentives
• Pharmaceutical inputs
• Capital goods/machinery
• Construction materials
• Spare parts
• Vehicles necessary for the investment
Personal income
tax exemption
Loss carry forward
100% Customs
duty and other
tax exemption on
import of
• 5-10 years for expatriate experts
• Long-term employment visa and work permit
• For up to 5 years
100% Export duty
exemption on
• Export of all pharmaceutical products
Procurement
• 25% price preference provided to firms manufacturing in Ethiopia
• Long term procurement framework on local sale of exported pharmaceutical
products
Finance and forex
• Increased export earning retention: 30% can be retained indefinitely,
and 70% can be used in 28 days
• Higher external loan threshold: 60:40 debt:equity ratio

36. Ethiopia: Country ProfileGeneral incentive packages and investment facilitation
support – for investment in priority sectors
 Corporate income tax exemption - up to 10 years income tax
exemption
 Import duty exemption - on import of capital goods, construction
materials, spare parts, motor vehicles, raw materials for export
commodities & personal effects for residents in industrial parks.
 Export duty exemption – on all products
 Loss carry forward – a right to carry forward loss incurred within the
period of income tax exemption for half of the income tax exemption
period after expiry
 Free repatriation of funds
 Guarantee against expropriation
Investment
Incentives
and
protection
 One-stop shop and aftercare services under the EIC
 Customs facilitation through bonded warehouse and voucher
schemes
 Expedited visa procedure
Investment
Facilitation

37. Thank You!