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A Swiss business delegation of 12 companies visited Addis Ababa last week and met with officials from offices such as the Ethiopian Investment Commission (EIC) and the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) during their five day stay. “I have been here for 10 months now and as soon as I arrived this was what the government wanted from me. They wanted me to bring in Swiss businesspeople so we can see if we can pick up on investments. I cannot decide myself, I just bring the business people here let them see for themselves and let them make their own decisions,” stated Andrea Semadeni, Ambassador of Switzerland to Ethiopia at the forum held at the Radisson Blu on Monday September 29th.
The Swiss companies that were in the delegation operate in areas like agro-processing, railway technology, pharmaceuticals, mining, and finance development.
“I think people abroad are really starting to notice that Ethiopia is a big country with a huge population and a huge potential, they are like vultures waiting outside looking at ways to engage in this market. It is not only Swiss companies, but many countries are sending in delegations, every week I see a Turkish delegation or an Indian delegation, or from other countries, coming in. So we are not the only ones, maybe we are a bit late,” said the ambassador.
Several challenges were underlined in presentations by the ECCSA and the EIC at the forum. They looked at Ethiopia’s investment opportunities, the legal framework for investment, and at future prospects. An experience sharing session with already operating companies was also included.
According to the Swiss ambassador, although there may be some challenges in the way things are done in new markets, it is something that companies need to adapt to.
“It is kind of a normal process when you do business in a country that is not yours and where the customs are different. You adapt, and to adapt means having a local partner who can help you navigate in this difference. For example, the land tenure issue in Ethiopia, for us the system of leasing land from the government doesn’t exist; either we buy the land or we don’t. So these kinds of things you have to understand before you do the investment. That is why we brought the companies here, to show them the good sides as well as the problems, and then they can make the decision,” the ambassador stated.
According to Tilahun Gemechu, Domestic Investors Transformation Directorate at the Ministry of Industry, the Swiss companies have already shown interest in Ethiopia.
“The companies’ visit at this time is just to explore what kind of opportunities Ethiopia can offer them and there are no done deals yet. But, the fact that they decided to make the visit here shows that they are already interested in what we offer. Otherwise, they would not be troubled to come,” Tilahun said.
He also stated that Ethiopia is known to have political and economical stability which is something investors look at initially. “That is why many foreign investors, when they look at Africa, they tend to choose Ethiopia. In some cases, some companies that invested in different African countries, show interest in relocating here because of the viable investment environment and stability. This is why investment is continuously growing in Ethiopia,” Tilahun added.
Paula Oberli, representative of the State Secretariat for Economic Affairs (SECO) in Switzerland who attended the forum as part of the delegation said that the fact that the Swiss companies showed interest in coming to Ethiopia shows for sure that there are bigger possibilities for the two countries to cooperate on.
“We came here to get an insight on what the conditions are because Swiss companies rely on a predictable business environment. What we have seen here is that there are many opportunities. When we look at Ethiopia, we are also looking at the region and Ethiopia could be a hub, you cannot separate the country from the region. I am glad to see the openness here, that is very important because the two countries do not have an intense trade relation so far and in order to develop that it is important to show openness,” Oberli said.
Another member of the business delegation was Gianni Rezzonico, Senior Vice President of Banca della Svizzera Italiana Bank (BSI Bank), one of the oldest Swiss banks.
“I work in a financial institution and my presence in the forum is more to act as a bridge between my clients and Ethiopia. The session we had was really good; I was really happy and surprised to see a lot of opportunities. The government seems to be very serious about it and compared to other countries in Africa and in some parts of the world, I think there is a fundamental advantage in Ethiopia which is the size of the domestic market and the location which is suitable to many kinds of industries,” Rezzonico said.
Among the potential investing companies that came with the business delegation was Roche, a Swiss global health-care company that operates worldwide under two divisions: Pharmaceuticals and Diagnostics. According to data, the company’s total revenue in 2013 was USD 50.5 billion and is said to be the fifth largest pharmaceutical company in the world.
“There are big opportunities; big growth opportunity for almost any industry and it is very attractive for our pharma company. Currently we operate in Northern Africa, we operate in selected countries in Sub-Saharan Africa and also in South Africa. We have a good presence in the continent,” Thomas Peter Kraehenbuehl, Project Manager, African Strategy at Roche told Capital.
The delegation was the first official business delegation from Switzerland to visit Ethiopia.