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Ethiopia: The New Horizon of Hope

Ethiopia: The New Horizon of Hope. General Background. Rapid economic growth. One of the fastest growing economies in the world 10% average growth over the past 14 years. Favourable destination for FDI. One of the top destinations for foreign direct investment (FDI). Population.

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Ethiopia: The New Horizon of Hope

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  1. Ethiopia: The New Horizon of Hope

  2. General Background Rapid economic growth • One of the fastest growing economies in the world • 10% average growth over the past 14 years Favourable destination for FDI • One of the top destinations for foreign direct investment (FDI) Population • Total: 105m (est. 2018) Young and productive population • Second most populous country in Africa and growing at 2.3 million annually. • 60% of the population are young age group FDI • FDI inflow: $3.6bn (2017) • FDI growth: 46% (2016) Health • Health spend: $2.7bn • Health spend/capita: $27 • Health spend/GDP: 5% • Availability of EDMs*: ~70% Clear vision for development • Vision 2025: Become leading manufacturing hub in Africa • 49% o total population Source: World Bank, IMF, WHO

  3. Ethiopian Investment Commission is the lead government agency responsible for investment promotion and provision of aftercare services Targeted investment promotion Streamlined One Stop Service Including licensing, Visa, TIN, and other services Approves Incentives Post establishment aftercare Support Smart and proactive investment support by initiating policy and implementation measures necessary for a conducive and competitive investment climate in collaboration with relevant stakeholders.

  4. Four fold increase in FDI flow over the last 5 years (from a little over 1 billion USD to more than 4.2 billion USD) Total FDI inflow & share of manufacturing FDI 2006/07 - 2016/17 (in USD million) Source: Ethiopian Investment Commission: National Bank of Ethiopia, USAID - Ethiopia Performance Monitoring and Evaluation Service (EPMES) 2017

  5. Ethiopia has undergone significant changes over the last year; opening up of the economy is currently underway • Enhance private sector participation in telecom, air transport, logistic, power transmission etc., • National flagship doing business reform initiative launched • Investment legal regime reform to further open up economy • Regional trade integration

  6. Country has also taken leadership in building a positive political landscape in the region

  7. Ethiopia has set the Vision to become the leading manufacturing hub of Africa by 2025 Ethiopia KEY GOVERNMENT STRATEGIES TO ATTAIN VISION 2025 1 • Targeted investment in priority areas • Development of world-class industrial parks fitted with sustainable infrastructure 2 3 • Tailored incentives • Conducive enabling environment 4 DEEP DIVE FOLLOWS

  8. Targeted investment in priority areas Strategic priority areas have been identified for FDI attraction and export promotion • Pharmaceuticals • Textile & Apparel • Agro-processing • Leather • Energy • Tourism • ICT • Horticulture

  9. Several plug-and-play Industrial Parks are being developed throughout the country Industrial Parks: Catalyst to drive Ethiopia’s industrialization agenda

  10. Several industrial Parks are being developed through out the country 4 Government owned IPs operational Bole Lemi I, Hawassa I, Mekelle and Kombolcha 22 Total planned Industrial Parks 2 Private IPs fully operational Eastern and Hujian Industry Parks 12 Government Industrial Parks Bahir Dar Jimma 16 IPs (State and private) under construction 10 Private Industrial Parks Construction not started Under construction Operational

  11. Sustainability is integral to the parks Africa’s 1st park with zero liquid discharge facility (ZLD)

  12. Development of world-class industrial parks fitted with sustainable infrastructure • Massive investment has been made in infrastructure development in support of industry (1/3) Electric-powered Railwayto ease logistics Africa’s 1st electric-powered railway

  13. Development of world-class industrial parks fitted with sustainable infrastructure • Massive investment has been made in infrastructure development in support of industry (2/3) Ethiopian Airlines – Cargo hubLargest cargo network and terminal in Africa

  14. Development of world-class industrial parks fitted with sustainable infrastructure • Massive investment has been infrastructure development in support of industry (3/3) cost-competitive, renewable and clean energy Green electricity generation supports industrialization

  15. Tailored and competitive incentives Tailored and competitive incentives are provided to foreign investors FISCAL NON FISCAL OTHER • Income Tax exemptions • Custom tax exemptions • Loss carry forward • Full export duty exemption • Guarantee against expropriation • Guarantee for repatriation of funds • Customs facilitation through bonded export factory and similar other schemes • Relaxed Industrial park land regime • One-Stop Shop Service • Expedited procedure for securing visa, work permit and certificate of residency • Facilitation of market linkages

  16. Market access advantage: Duty-free market access to USA & EU & preferential duty treatment

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