Operational investment projects dropped by 99%

The latest quarterly bulletin of the National Bank of Ethiopia (NBE) indicates that fresh investment projects and investment capital was almost nil in the first quarter of the fiscal year.
The bulletin that shows the overall economic condition of the country states that in the first quarter of 2019/20 fiscal year that ended on September 30, only 9 investment projects with investment capital of 60.7 million Birr became operational. It added that both the number of investment projects and investment capital showed 98.3 and 99 percent decline compared to the same period last year.
At the same period of last year the number of projects operational were 554 with 5.88 billion birr investment capital. The number of operational investment in the fourth quarter of the past fiscal year has been 112 with 898 million birr capital.
According to the quarter review document, from the stated number of investments and capital there was no foreign investments. “All investment projects were private and domestic,” it explained.
However Abebe Abebayehu Ethiopian Investment Commission Commissioner strongly disagrees with the report. “In the first quarter of the budget year there was 700 million dollar inflow of foreign direct Investment. Moreover 33 businesses become operational during the stated period,” Abebe told Capital.
A year ago six foreign investment projects with investment capital of 199.2 million birr were operational, while the public investment were nil during the whole year of last year.
According to NBE’s report, the nine investment projects in the first quarter of this budget year have generated employment opportunities for 112 people of which 45.5 percent (51 jobs) was permanent and 54.5 percent (61 jobs) temporary. Compared with the same period of last year the employment generation has dropped by 99.6 and 98.8 percent respectively for permanent and temporary employment.
These figures were 12, 506 permanent and 5,174 temporary jobs at the same period of last year.
Regarding regional distribution from the nine new operational investments, except one investment in Tigrai all are in Addis Ababa.
“In terms of regional distribution, 88.9 percent of the total projects with 75.3 percent of total investment capital were in Addis Ababa and 11.1 percent of total projects with 24.7 percent of capital are in Tigray,” the report states.
While in terms of job creation Addis Ababa received 80.4 percent of the permanent employment and 67.2 percent temporary employment while that of Tigray region was 19.6 and 32.8 percent respectively.
As for sectoral distribution, manufacturing constituted 55.6 percent of the total investment project while construction and real estate, renting and business activities took 22.2 percent share each. Of the 60.7 million birr capital invested, the share of manufacturing sector was 66.4 percent, and that of real estate, renting and business activities 26.3 percent and construction 7.2 percent.
About 76.5 percent of the permanent employment was created by manufacturing sector while real estate, renting and business activities created 23.5 percent, according to the quarterly bulletin of the central bank.
Likewise, manufacturing sector was the leading sector by employing 67.2 percent of temporary labor force followed by real estate, renting and business activities which constituted 32.8 percent.
The registered operational investment in Tigray region in the stated period was consumed almost one fourth of the total investment for the period, while it has only created 10 permanent and 20 temporary jobs.
The bulletin indicated that operational investment in other regions in the stated period was zero. However in the first quarter of 2018/19 each one investment with capital of 40 million birr and 123 million birr were operational in Amhara and Oromia regions respectively. But it was zero for all regions in the fourth quarter except Tigray and Addis Ababa.
However regional investments slow downed the situation in Tigray region is different for instance in the first quarter of the 2018/19 9 projects with capital of 34.3 million birr were operational that improved to 12 projects and 103 million birr capital at the fourth quarter.
Otherwise all of the 533 projects are based in Addis Ababa.
Hailu Jelde, Commissioner of Oromia Investment Commission, which is the biggest region regarding investment potential, capacity and strategic location, told Capital that the region is focusing in enhancing previous investments to undertake their businesses on full capacity.
A couple weeks ago Investment Trend Monitor, the United Nations Conference on Trade and Development (UNCTAD) report, stated that the foreign direct investment slowed down to USD 2.5 billion in 2019 from USD 3.2 billion a year ago.