Background

Economy

Ethiopia is one of the fastest growing economies in the world (GDP forecast 2018, 8.5%) and is a prime investment destination in Africa, having attracted USD 3,8 billion in FDI in 2017. Since early 2000s, the economy experience strong economic growth average GDP growth of 9-10% per year. Public investments in infrastructure, railways, roads, renewable energy and industrial parks combined with abundant workforce, and preferential access to European / US markets are key for Ethiopia’s emerging industrialization.

Politics

In April 2018, Ethiopia’s new government under the new Prime Minister, Dr. Abiy Ahmed Ali, took office with strong emphasis on infrastructure development, including the expansion of the rail network, and industrialization through industrial parks. The new government continues to ensure a high level political commitment on investment promotion and protection in the country. The Prime Minister directs the Ethiopian Investment Board where national infrastructure projects are discussed and decided.

Location

Ethiopia is strategically located at the Horn of Africa with proximity to Middle Eastern, European and Asian markets. It borders Kenya and South Sudan in the South, Somalia and Djibouti in the East, Eritrea in the North and Sudan in the West.

International Support

Most infrastructure projects are open for international competitive bidding and are funded either by the Government of Ethiopia or major international financial institutions, such as the World Bank’s International Development Association, the African Development Bank and bilateral financial agreement.

Other Key Facts

Railways: The Ethiopia-Djibouti electric-powered standard gauge railway is in full operation since 2017, cutting travel time from Addis Ababa to Port Djibouti from 84 to 10 hours.
Roads: The national road network is rapidly growing, increasing connectivity of secondary and tertiary cities and access to local, national and regional markets. 220,000 km of all-weather roads are planned to be in place by 2020.
Renewable Energy: The Grand Ethiopian Renaissance Dam will be the largest hydroelectric power dam in Africa and generate additional 6,450 MW electricity once completed. Ethiopia’s total generating capacity in hydropower is estimated at 45,000 MW. It also has huge capacity for wind power (10,000 MW) and geothermal power (5,000 MW). Already today Ethiopia has one of the cheapest electricity rates in the world, which is one of its drivers for becoming a global manufacturing hub.
Industrial Parks: Ethiopia has embarked on an ambitious industrial park development programme and already put in place two state-of-the art industrial parks with another two to become operational in 2018 and a total of 15 parks to be completed by 2020.
Young workforce: Ethiopia is Africa’s second most populous country with 102 million inhabitants and one of the largest and young workforce.
EU/US market access: Ethiopia has duty-free/quota-free access to the US and EU markets through AGOA and EBA, respectively. Furthermore its COMESA and CFTA memberships ensure preferential market access to quickly growing regional African markets.
Recent government reforms have unlocked new business opportunities with a focus on the industrial and logistics sectors and more emphasis now are being given to the development of public private partnerships.