Despite the odds investing in Ethiopia is profitable say major international companies. They talked about their experiences here at a day long investment summit on the sidelines of the World Economic Forum last Wednesday at the Conference Center of the United Nations Economic Commission for Africa. The Ethiopian Investment Summit (EIS) highlighted the opportunities and challenges of doing business in Ethiopia. The summit, which gathered close to 700 Chief Executive Officers from home and abroad, served as a platform for business leaders to network with each other and share their personal experiences.
Zemedeneh Negatu, Managing Partner for Ethiopia and Head of Transaction Advisory for Eastern Africa at Ernest & Young advised the participants to consider investing in five prime sectors of the Ethiopian economy: agriculture, manufacturing, infrastructure, mining and eco tourism. The investment opportunities in Ethiopia are evolving, adapting and improving, he said.
“Ethiopia still needs to do a lot more to improve the operating environment of business. However, last year’s annual World Bank’s Doing Business Guide indicates that Ethiopia out-ranked three out of the four BRICS countries, conforming that policy reforms in Ethiopia are already showing some positive results,” he said while addressing the summit.
“Ethiopia will be the third largest economy in sub-Saharan Africa in 15 years with a GDP of 472 billion dollars following Nigeria and South Africa,” he added.
Zemedeneh sees the ever increasing population of Ethiopia, already the second largest in Africa only surpassed by Nigeria, as a potential resource for attracting foreign direct investment.
“Ethiopia’s population will reach 120 million in the middle of the next decade with a median age of 20. This represents an abundant and competitive workforce for large scale labor intensive industries. Brazil, Russia, Russia, India, China and South Africa have all leveraged their young population to transform their economics in to the BRICS. And I believe Ethiopia’s demography can do the same,” he argued.
Some foreign companies, like Karaturi Global, Diageo and Schulze Global Investments, shared their experience about investing in Ethiopia. The entertained views both from private and public sides can be summed up in one phrase; despite the odds investing in Ethiopia is profitable.
Neway Gebreab (Dr.), Chief Economic Advisor of Prime Minister Meles Zenawi, explained Ethiopia’s economic achievement over the past two decades and underlines the bright future that awaits the country.
Neway retreated about some of the economic indicators that portray the progress of the Ethiopian economy over the past two decades. For instance, the total fertility rate has decline from 7.1 in 1990 to 4.2 in 2010 while life expectancy at birth increased from 49 to 59 during the same time.
He argued that the economic growth in the country is broad based in that it is widely shared consistently with government policy of avoiding uneven growth geographically and high income inequality.
The chief economic advisor asserted that inflation and exogenous shocks were the only twin challenges to the Ethiopian economy. The massive investment on development infrastructure, the expansion of tertiary education, the commercialization of smallholder agriculture, the development of the private sector and the increasing inward flow of Foreign Direct Investment were identified by him as the prospects of Ethiopia’s Economy in the years to come.