Addis Ababa, August 16, 2024 (FBC) – The full implementation of macroeconomic reform policy in Ethiopia is a big change to further place the country as a more favorable destination for foreign direct investment (FDI), Ethiopian Investment Commissioner Ms. Hanna Arayaselassie remarked.
The government of Ethiopia announced recently that it has embarked on full implementation of macroeconomic reform policy.
Chief Commissioner Hanna said the macroeconomic reform policy is a very big change to further enhancing investment in Ethiopia.
So far the nation had very good successes in attracting FDI, she said, adding but one of the burning issues and continuous challenges for investments has been shortages of foreign currency.
“The floating of the currency will have a very good impact on that. As investors look at Ethiopia as a potential destination for their investment, one of the key challenges that they bring up has now been addressed.”
Because in the previous discussions with investors, they had serious concerns as to how to access foreign exchange, in terms of getting their inputs, repatriating their profits and to be able to pay if their foreign debts, among other things, she said.
“Now with the unification of this foreign exchange regime, the concerns have been addressed for both the existing investors, especially those that are engaged in export trade and for potential investors looking at Ethiopia,” she elaborated.
The Commissioner added that this is a very big change that is expected to further “place Ethiopia as a more favorable destination for FDI.”
Moreover, she elaborated that Ethiopia is one of the most effective countries in terms of attracting FDI.
Ethiopia has attracted 3.82 billion USD in FDI in various sectors during the concluded Ethiopian Fiscal Year.
The Ethiopian Investment Commission, in collaboration with other government agencies, has been working to increase the flow of FDI, she added.
“If you look at sector distribution over the last five or 10 years, the bulk of our FDI projects are happening in the manufacturing sector. One of the things we are looking at is diversifying our source of FDI.”
For instance, in the just concluded Ethiopian Fiscal Year, about 80 percent of all incoming projects have been in the manufacturing sector, which is, of course, very much aligned with the government’s policy to industrialize the country, she added.
But on the other hand, she reiterated that we need to be mindful of sector diversification.
Hanna mentioned that the energy sector has been clearly identified as one of the priority sectors; our work in supporting and attracting investments in that sector so far has been limited, as reported by ENA.
But going forward, “we are working towards aligning our efforts so as to increase investments in energy, agriculture, tourism, among other sectors.”
Speaking on the continual improvements the nation has been making in the investment climate, Hanna said the recent opening up of new sectors, most notably the trading sector, is key enabler for increasing FDI into the country.
“The new Special Economic Zone proclamation is also another key enabler, because from our past experience, the industrial parks or special economic zones have been very critical as an investment promotion tool to attract investments, particularly in the manufacturing sector.”
Therefore, she noted all these policy changes are expected to continue to make Ethiopia favorable destinations for FDI in Africa.