The country’s economic landscape has taken shape and is now among the fastest-growing in the world and has registered a double digit growth for the last ten years. The political and social stability, rapid economic growth, favourable climate and fertile soils, abundant labour force, competitive incentive packages and access to wide market are some of the reasons that are contributing to growth of Foreign Direct Investment (FDI).
The experience of other countries have witnessed that the contribution of FDI towards job creation is vital. Recipients of FDI often gain employee training in the course of operating the new businesses, contributing to human capital development in the host country. What is more, it allows the transfer of technology—particularly in the form of new varieties of capital inputs—that cannot be achieved through financial investments or trade in goods and services. FDI has also a great role to promote competition in the domestic input market.
It is evident that the world's media agreed up on the fact that Ethiopia is becoming one of the leading economies in the world. In a country like Ethiopia that aspires to achieve economic development the role FDI is beyond question. This is specially true to realize the vision of achieving middle income countries. The country is rapidly becoming one of Africa’s fastest-growing economies and is now drawing the attention of international investors.
Using the available man power and conducive investment policies, several investors are investing their money and knowledge in Ethiopia. Due to this reason, the FDI is increasing. Within the past years, Ethiopia has risen from the lowest place on the list of African foreign direct investment recipients to the highest position and the number of projects in the country have increased dramatically.
The key priority areas for investment in Ethiopia are agro-processing industry, textile and apparel industries, sugar and related industries, chemical industry, pharmaceuticals industry and metal and engineering industries. The establishment of industrial parks that focus on the production of textiles, leather, garments, pharmaceuticals, agro-processing and equipment manufacturing plays considerable role in supporting the endeavor.
Ethiopia has given special attention to investment. This special attention to the sector has enabled foreign investors to look into the country. This is witnessed within the ten past years in which the FDI of the country has increased dramatically.
Several opportunities that were created for investors became the stimulants for international investors to spend their money, skills and knowledge in the country. The installation of railway, road infrastructure, telecommunication service, electricity power, industrial park development projects and others are some of the factors that speed up investment.
According to Ethiopian Investment Commission, in the first Growth Transformation Plan (GTP-I) the country has generated 1.2 billion USD from FDI. This figure has increased at the end of the five year and has increased into 2.2 billion USD.
What is more, in the first year of GTP II the figure has increased into three billion USD. For the last budget year, this figure has also shown a positive increase. Despite all the internal challenges such as drought, security issues and decrease in export, the figure has showed an increase. This is a good witness that the country is really a suitable destination for investment.
Despite the attempts of anti-peace elements to jeopardize the economic progress of the country, the investment growth is at a remarkable pace. This is mainly resulted from the government's commitment to address the public issues immediately. Sources are still indicating that the investment flow into the country are still growing. This is a good indication that the nation is built upon a solid democratic and peaceful foundation that encourages and protects the interests of investors.
Because of the State of Emergency and other measures the government is able to prevent any more anti-developmental activities. This has supported and sustained the investment flow into the country.
The government is providing incentives that encourage investors. And this incentives are attracting investors from every corner of the world. Our recent experience has witnessed that the investment sector is one of the most important engine for country's economic development. It is crystal clear that the role of the investment sector to further boost the economic growth of the country is beyond measure. The sector has a multifaceted benefit to the growing economy of the nation.
Despite the recent unrest in the country, the nation has managed to attract FDI with a combined capital of 1.2 billion USD during the first half year of the current fiscal year, with a slight reduction compared to the same period in the previous year.
In a country like Ethiopia that aspires to advance its economy through agriculture, the investment sector can be considered as an insurance. In this regard, using the already registered achievements as input, the government is expected to further encourage investors. In this regard, the roles of the diaspora and the media are vital in promoting nation's untapped potential in the area.
BY LEULSEGED WORKU