Invest Ethiopia 2023: A Flagship Event To Stimulate Nat’l Economy

BY A STAFF WRITER

In its Homegrown Economic Reform Agenda as a pathway to prosperity, notable
investment promotion is one of the priorities in the structural transformation of the Ethiopian economy. More importantly, the government’s growth strategy calls for structural reforms designed to strengthen the private sector and increase investment as an approach to accelerate   Ethiopian prosperity.

The Homegrown Economic Reform Program which fundamentally intends to address macroeconomic imbalances and provides a foundation for growth led by the private sector, Ethiopia has recently been reinforcing the implementation of important reforms to flourish sector investment, in particular.

As part of the endeavor to promote investment, the Ethiopian Investment Commission (EIC) has introduced a flagship event entitled: “Invest in Ethiopia” which helped to hold numerous consultations with various stakeholders. The events are showcasing different investment opportunities available in different parts of the country with a platform where success stories will be shared by successful investors in various sectors.

Couple of days back the EIC announced that a flagship forum of Invest Ethiopia 2023 is taking from April 26- 28, 2023 at Skylight Hotel in Addis Ababa. The forum will attract about 600 new and existing investors from overseas and local ones along with high government officials, companies, chambers, policy makers and other stakeholders.  

Despite Ethiopia passing through horrendous conflicts and a two-year long war in the northern part of the country, FDI inflow into the country has remained a growth trajectory over the last five years. Ethiopia is highly anticipated to register an impressive growth trajectory. 

For instance, the IMF has recently predicted that Ethiopia will be the third largest economy in Africa surpassing Kenya by 2023. Ethiopa’s key investment areas clearly identified in the Ten Years Perspective Plan (2020-2030)—i.e. agriculture, manufacturing industries, mining and ICT,among others, are the opportunities which should be promoted at Invest Ethiopia 2023 Forum. The Strategy enumerated in Digital Ethiopia2025 incidentally focuses on similar digitalization of the national economy through the development of ICT systems across the country.  The author of this article believes that these sectors are among the commanding heights of the Ethiopian economy.

According to EIC’s 2021 report, Ethiopia has managed to lure FDI worth 4.9 billion USD, the biggest FDI in East Africa. It therefore stands to reason that the IMF has predicted a double digit growth of 13 percent, making Ethiopia one of the fastest growing economies in Africa.

 According to EIC, Invest Ethiopia targets 3 billion USD in FDI for 2023 including 500 million USD soft commitment successes in the short run. Ethiopia has now become a major investment destination in Africa primarily because of the comparative advantage the country is enjoying. 

According to global FDI Intelligence, in  terms of agricultural development, Ethiopia ranked first in FDI’s latest assessment of the world’s 100 most competitive countries to set up a grain processing plant, followed by surprise contender Myanmar; Asian powerhouses China and India; and Ghana in west Africa.

 Despite the unprecedented media and information warfare against Ethiopia over the past years, the country has managed to register impressive results. Over the years, Ethiopia has intensified wheat cluster farming and has commenced exporting wheat in 2023. Moreover, the country is endowed with abundant natural resources of adequate farmland and favorable climatic conditions to produce and export avocado as a new food crop for investment.

The manufacturing sector is another important economic sector that is already a focus area for investments. The country is striving to increase the share of the manufacturing sector from the current 5 percent of the GDP to 17 percent FDI. Public investments in the industrial parks are showing growth. This trend is truly imperative for enhancing investments in apparel, pharmaceuticals, ICT products and footwear and other commodities. Local investors tend to invest more in the service sector and are not ready to fully engage in the sector probably because it requires a huge amount of capital investments.

ICT sector is another fast growing area of public and private investment in Ethiopia.  Ethiopia launched its Digital Transformation Strategy 2025 in 2020. The strategy includes five priorities: implementation of a digital ID, digital payments, e-governance, e-commerce and cybersecurity. It is complemented by more specific strategies, such as the National Financial Inclusion Strategy and the National Bank of Ethiopia’s National Digital Payments Strategy, which aim to transform the payment ecosystem and support the building of a cash-lite and financially inclusive economy. 

All told, Ethiopia offers enormous potentials for investment. Parks development initiatives Prime Minister Abiy launched in Addis Ababa and across the country are also potential areas which will inspire investors to engage in tourism development. 

The author is optimistic that the Invest Ethiopia will definitely increase the flow of FDI in the country not only in the areas mentioned but also in other areas. The forum will also help Ethiopia to share its experiences and also learn from others.