WHY ETHIOPIA?
Top/favorable FDI destination in East Africa— USD 4.1 Billion in 2021 and USD 3.7 billion in 2022 (UNCTAD)
- Fastest growing economy: – One of the fastest growing economy of the millennium—10% av. growth since 2010. And With 126.5 million people, it’s Africa’s second-most populous, offering a vibrant domestic market.
- Competitive work force: – With a population of 126 million, Ethiopia boasts the second-largest labour force in Africa, with 60% falling within the productive age range of 15 to 65. This dynamic workforce, characterized by its youthfulness, fast-learning abilities, and productivity, continues to grow with 300,000 university and 367,000 TVET graduates joining the labor market every year. There are also a relatively low wage rates and large industrial workforce that offer significant labour-cost advantages for investors. Our investor-friendly labour regime features one of the lowest labour-tax contributions of the region (12.4% of profits in 2019)
- Strategic location: – Given its strategic location and with its capital serving as the seat of the African Union, Ethiopia stands as a gateway to Africa. Its active participation in key regional blocs, such as the African Continental Free Trade Area and BRICS, highlights its pivotal role in the continent’s economic landscape. Furthermore, its accessibility to major ports beckons international investors for a smooth entry into the African market.
- Dynamic Policy: – Ethiopia introduced investment climate reforms in 2020 in the form of a new investment proclamation. And several other reforms designed to make investing in Ethiopia easier including introducing multi-year investment visas, improving investment protections, expanding our One-Stop-Service, improving investment protections, fast-tracking investor grievance handling, and so much more. The reforms have been recognized as global best practices, and in 2021 Ethiopia received the top “Gold” Award in the World Association of Investment Promotion Agencies/World Bank ‘Strengthening IPA Advocacy Services’ global competition.
4. Connected Market
Our national airline, Ethiopian Airlines, plays a pivotal role in linking Ethiopia to key regional and global markets. It stands as the largest carrier in Africa in terms of passengers carried and holds the fourth position globally for nations served. Currently, Ethiopian Airlines operates two daily flights to four Indian cities, namely Delhi, Bengaluru, Chennai, and Mumbai.
6. Abundant Resource
Ethiopia possesses abundant and diverse untapped mineral resources, offering substantial opportunities for exploration and development. These include tantalum, potash, gemstones, gold, iron ore, and various other minerals crucial for industrial, energy, and construction purposes.
The mining sector has seen a surge in investor interest, with 24 companies currently operating, contributing to 14% of total exports and creating 54,000 jobs.
7. Enabling Infrastructure
In the past decade, Ethiopia has dedicated the highest share in Africa, allocating 10% of its GDP to infrastructure development. This commitment has facilitated the provision of affordable electricity, establishment of specialized industrial zones, and the creation of a well-connected network of roads and railways.
- Cheap Electricity: – We have built the largest hydroelectric generation dam in Africa, the Great Ethiopian Renaissance Dam (GERD), with the capacity to generate 6,450 MW of electricity—significantly improving the supply of power to local industries and providing energy-exporting opportunities. We are now offering electricity at one of the lowest utility rates in the world: at 023 US cents/KWH
- Industrial parks: – With the goal of economic agglomeration, we have built 13 industrial parks equipped with the required infrastructure and services and are catering to 189 companies.
- Roads and railways: – We’ve constructed 145,000 kilometres of roads and are working on an additional 50,000 kilometres. Our 780-kilometer Addis Ababa–Djibouti railway transports 24.9 million tons of freight annually, reducing shipping times from three days to 10 hours.
8. Attractive Incentives
The Government of Ethiopia offers attractive fiscal and non-fiscal incentives to investors.
Fiscal
- Exemption from income tax: up to 6 years for enterprises outside Industrial Parks.
- Exemption from income tax: 8 – 10 years for enterprises inside Industrial Parks, and 15 years for Industrial Park developers
- Exemption from duties and other taxes: on imports of machinery, equipment, construction materials, spare parts, raw materials
- Full export duty exemption
- Loss carry forward
Non-fiscal
- Customs facilitation through bonded-export-factory and similar schemes
- Guarantee against expropriation
- Guarantee for repatriation of funds
- Relaxed industrial parks land regime―60-80 years charge-free lease for IP developers
Other
- Expedited visa procedure for securing entry, work permits and certificate of residency
- Multiple entry visa for shareholders and general managers
- Facilitation of market linkages
- One-stop-shop service at EIC including licensing, registration, and aftercare
