Official Name: Federal Democratic Republic of Ethiopia
Political system: Federal State with a multi-party system
Capital City: Addis Ababa, seat of the African Union (AU) and
United Nations Economic Commission for Africa (UNECA)
Location: Horn of Africa, at the crossroads between Africa, the
Middle East and Asia
Area: 1.1 million square kilometres
Population: 2nd most populous country in Africa with a population size of over 100 million
Language: Working Federal language – Amharic,
English is widely spoken
Exports: Leading exports: coffee, oilseeds, gold, pulses,
horticulture, live animals, growing manufacturing export (textile and apparel, leather and leather products etc)
Climate: Temperate in the highlands: 20°C – 30°C, low in the
lowlands: up to 45°C Rainfall ranges from 200 mm to 2000 mm and highly suitable for production.
Currency: Ethiopian Birr (ETB)
Country Code: +251
Time Zone: GMT+3.
Why invest in Ethiopia?
Ethiopia has become a preferred destination for foreign direct investment and emerging hub for manufacturing in Africa due to its: Political stability and committed government
- Stable socio-economic governance with sustained peace and security.
- High level political commitment for investment promotion and protection; investment policy making is led by the Ethiopian Investment Board chaired by the Prime Minister
- Ranked 34th /138 economies for impartial public decision making (Global Competitiveness Report, 2016).
- Wide-ranging incentive packages for priority sectors and export-oriented investments.
- Bold initiative in the development of state-of-the art industrial parks, electric-powered railway connecting the capital and other economic corridors to the port of Djibouti.
Conducive economic factors
- An average of about 11% annual GDP growth for the last 14 years, one of the fastest growing economies in the world during the same period (World Bank Global
- Stable and conducive macroeconomic environment.
- Implementing phase II of its Growth and Transformation Plan (GTP II) which aims to realize a structural transformation of the economy.
- 46% growth in FDI inflow– one of the most dynamic and largest FDI recipients in Africa (UNCTAD World Investment Report 2017)
Favourable market factors
- Africa’s second most populous nation with a population size close to 100 million.
- 54 million active labour force, trainable and available at competitive wage rate.
- Duty-free, quota-free access to the USA and EU markets through AGOA and EBA, respectively
- Duty-free, quota-free access to Japan, Canada, China, Turkey, Australia and New Zealand – covering substantially all export goods from Ethiopia. Preferential market access to India.
- Member of COMESA with preferential market access to a regional market of 400 million people.
- Strategic location with proximity to the Middle East, Europe and Asia. Well developed infrastructure
- Newly built Addis-Djibouti electric-powered railway
- Africa’s world-class and Star Alliance member Ethiopian Airlines flying to about 100 international passenger and 36 dedicated cargo destinations; also flies to over 20 domestic passenger destinations
- Huge investment potential in renewable energy including hyrdo, wind and geotermal;
Grand Ethiopian Renaissance Dam – the largest hydroelectric power dam in Africa – under construction (close to 60% completed), expected to generate additional 6,000MW electricity.
- Expanding telecommunication services.
- Expansive road networks connecting national and regional markets.
- Two operational and seven upcoming government industrial parks; eight private industrial parks in the pipeline.
Areas of investment opportunities and incentives
- Vision: To become the leading manufacturing hub in Africa.
- Ethiopia offers a remarkable competitive advantage for manufacturing industries dueto:- government facilitation of efficiency-enhancing investment solutions including industrial parks that are ready for ‘plug and play’;
– large pool of trainable work force available at competitive wages;
– cheapest energy rate on a global standard;
– geographic proximity and preferential access to key markets; and- abundance of high-quality industrial raw materials;
- Ethiopia is Africa’s largest raw material supplier for the leather industry.
- Priority areas for investment: Textile & apparel, leather & leather products, agroprocessing, pharmaceuticals, chemical products, metal & engineering industry, electronics & electrical products, paper & paper products, and construction materials.
- Income tax exemption incentive:
– Up to 10 years corporate income tax exemption
- Up to 6 years exemption depending on sector of engagement;
- Additional 2-4 years exemption for industrial park enterprises with at least 80% export or input supply to exporters;
- Additional 2 years exemption for 60% exporters or input suppliers to exporters within or outside of industrial parks;
- Additional 30% deduction for 3 consecutive years if investment inunderdeveloped regions).
– Up to 14 years corporate income tax exemption for pharmaceutical manufacturers located in industrial parks:
- Up to 14 years exemption for manufactures of active pharmaceutical ingredients (varying based on export levels)
- Up to 12 years exemption for manufactures of formulation and final medicine (varying based on export levels)
- Up to 8 years exemption for manufactures of pharmaceutical packaging materials (varying based on export levels)
– Up to 5 years personal income tax exemption for expatriate employees of industrial park enterprises (tenants) following issuance of business license.
See here complete info An Investment Guide to Ethiopia PDF