Areas of Opportunity

Areas of Opportunity (9)

Tuesday, 10 May 2016 09:34

Telecommunications

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Telecommunication in Ethiopia owned by the state, however, it does provide services national and international services by using Micro wave Digital Radio Multi Access System, Satellite, VHE, UHF, Long Line and HF Radio. According to Ethio Telecom between 2013/14 the mobile subscriber reached 28.3 and this staggering subscription shows that this nation is aggressively towards a high demand for the expansion of telecom services. In todays competitive and highly skilled labor world a high and efficient services needed. The telecom services helped and cut service deliverance by avoiding traveling times.

The administration is making sure all regional states, towns are connected and deliver services so that not only those who are investing in Ethiopia are benefiting out of this transformation but in fact, the first people to use this would be the indigenous people. The demand for the services is higher than before and understanding and acknowledging these factspressed the administration of Ethiopia to create a world class telecom services provider. From the Ethio Telecom stands, they are presently put forward a huge transformation work of Next generation Network projects to create a fascinating world class telecom services.

Saturday, 07 June 2014 21:32

Education

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If it wasn’t for ignorance there wouldn’t have been knowledge, and with this in mind, an emerging country like Ethiopia has been aggressively focused the importance of education. Inclusive and transparent educational systems brought forward to advance economically and technologically. Inclusive education means that all students, regardless of poverty, gender, ethnic background attend schools and attain in all aspects of life of the school.  The contribution and investing in education is one way to get access in Ethiopia to those who are interested to benefit financial gains.

“To achieve universal primary education” constitute the 2nd Millennium Development Goal set by the United Nations. Meeting the Education Goal will speed progress toward every other Millennium Goal. Educating children helps reduce poverty and promote gender equality.

Capacity building is strategic for overcoming poverty and achieving development. In the process of Africa’s economic and social development, human development is crucial for effective policy making and strengthening institutional capacity of African countries. Achieving high level of enrollment in primary and secondary education is one aspect of capacity development. Another aspect is to effectively tap existing resources and capacity of Ethiopian diasporas with qualifications, relevant skills and expertise living abroad and who actually hope that, one day they return back to their respective homes to join hands in building and developing their countries of origin.

According to His Excellency Ato Shiferaw Shugutie, the Federal Minister of Education, "over the last two decades Ethiopia’s Gross Enrollment Rate has soared, government has allocated a huge budget and admirable results have been achieved.”

Ethiopia has steadily increased the number of children in school in the last two decades from as low as 2 million in the 1990’s to over 22 million in 2012, trebling its Gross  Enrollment  Rates from as low as 32% in 1990s to 95 in 2012. With the current Net Enrollment Rate of 86%, Ethiopia is on track to meet MDG 2 (UNICEF, 2014).

However, current data from the just completed Study on the “Situation of Out of School Children in Ethiopia” shows that 3 million children remain out of school, while enrollment rates reveal marked regional disparities with regions like Afar recording enrollments as low as 32%. Key barriers in the way of the country’s drive towards access to universal primary education include costs around schooling, lack of basic facilities and quality education. These are often compounded by negative and harmful traditional practices, like early marriage and the preference for boys over girls, which put education out of reach for many girls.

Ethiopia has no shortage of universities – there are more than 30 across the country. The government has successfully put schools into most villages. As a result, primary schooling continues to grow. Yet the literacy rate sits around 42 percent. This figure will improve over time. And as both primary education attendance and literacy improves, the secondary level of education, specifically universities and vocational schools, will become most attractive for private investment.

Furthermore, investing at this level presents multiple opportunities for scaling and developing infrastructure. Institutions can scale across the country with Ethiopia’s much dispersed population – the country is not nearly as urbanized as its neighbors. Institutions can also potentially scale across borders as Africans demand better secondary schooling options because companies and investors require higher training. One Ethiopian university has already expanded operations to neighboring Somaliland.

In addition, “the changing dynamic of mobile phones and internet access can reduce the cost of soft infrastructure for institutions. Online and virtual training enables a group of institutions to share and fully utilize teachers across borders. Partnerships between institutions in Ethiopia and those in developed countries, such as the United States and United Kingdom, could also enrich students’ experience.

The following areas are some of the opportunities for foreign investors by constructing own building:

  •  Secondary schools;
  • Science and technology colleges/universities;
  • Colleges for business and marketing;
  • Schools for medical science;
  • ICT institutions;
  • Vocational training centers; and
  • Training centre for hospitability industry.

 

 

 

Saturday, 07 June 2014 21:28

Electric Power

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The private sector can participate in electricity generation from any source and without any capacity limit. Transmission and supply of electrical energy through the Integrated National Grid System is, however, exclusively reserved for the Government. But, private investors, both foreign and domestic, are allowed to operate an off-grid transmission and distribution of electricity.

Saturday, 07 June 2014 21:20

Tourism

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It was not Spain, France, Kenya, or Tanzania nor Zimbabwe last year winner, recognized as the best tourist destination. According to Mail On Line and Ethiopian News Agency, Ethiopia recognized by the General Assembly of European Council on Tourism and Trade (ECTT). Ethiopia was selected as the winner for world Best Tourist Destination and receiver of favorite Cultural Destination Distinction for the year of 2015. Last year the country earned 2 billion dollars and also targeting $3 billion to earn for the year 2014.

Ethiopia, an old country beyond all imaginations, is one of the top tourist destinations in Africa. It is a multicultural nation with more than 80 different ethnic groups each with its own distinct language, culture and tradition, dating back over 3,000 years.

Eight of Ethiopia's cultural and natural heritage sites (as many as in Egypt) are listed on UNESCO'S World Heritage Site attesting to the outstanding universal value of Ethiopia's heritage. The cultural landscape composed of rich and varied tangible and intangible cultural heritage is further enriched by the diverse religions practiced in Ethiopia including Christianity, Islam, Judaism, and numerous traditional religions.

Ethiopia stands at a great advantage, being the best tourism destination in Africa because of its unique cultural diversity, historical heritage, natural environment, a surprisingly cool climate, rich flora and fauna, significant archeological sites, hospitable people and political stability, among other things. According to the World Bank, Ethiopia, with a total of 523,000 arrivals and earnings of almost USD 1.4bn in 2011, achieved 20% growth.

The current Ethiopian constitution recognizes the right of all ethno-linguistic communities to protect and promote their culture, language, and cultural heritage. Its political commitment is articulated in the preamble to the constitution (The Constitution of FDRE-1995) as follows:

“…Firmly convinced that the fulfillment of this objective requires full respect of individual and people's fundamental freedoms and rights, to live together on the basis of equality and without any sexual, religious, or cultural discrimination. Further convinced that by continuing to live with our rich and proud cultural legacies in territories we have long inhabited, through continuous interaction on various levels and forms of life, built-up common interests and have also contributed to the emergence of a common outlook. Fully cognizant that our common destiny can best be served by rectifying historically unjust relationships and by further promoting our shared interests……"

Furthermore, the rights of peoples have clearly been endorsed in article 39 (2) of constitution. The Constitution states "…..Every Nation, Nationality and people in Ethiopia has the right to speak, to write and to develop its own language; to express, to develop and to promote its culture; and to preserve its history."

The increasing number of tourists and the evolving profile of today’s traveler demand a host of new tourism offerings and infrastructure projects. A wide spectrum of investment opportunities arise out of Ethiopia’s long-term tourism plans. Indeed Ethiopia has made significant strides which should be applauded, as far as the tourism sector is concerned. However, there still remains a lot to do in the future.  Opportunities to invest in tourism exist in   a myriad of segments:

  •  Tourist accommodation: the construction of star-designated hotels, lodges and resorts, international and specialized restaurants, and international standard tour operators;
  • Tourist transport services: tourist taxis, car hire services, cruise boats, tour guide services, travel agencies, etc;
  • Shopping avenues: souvenir shops, supermarkets, shopping arcades, shopping malls and duty free shops;
  • Tourism financial services: rental services for tourists who need catering, camping and picnic accessories, cell phones, toilets;  
  • Tourism medical services: health services including tourism health insurance companies, ambulance services for tourists, and flying doctors to service remote tourist sites;
  • Entertainment, food and beverage services: cafes, food corners, pubs, nightclubs, restaurants, amusement parks, casinos, etc;
  • Leisure & sports: sporting activities including golf courses, yachting, sailing, surfing, fishing, etc; and
  • Tourist information and education:  independent shops to provide general and location specific information.

Ethiopia is currently serviced by most major airlines, including, Ethiopian, Emirates, KLM, Lufthansa, Turkish, Kenyan and others.

 

Saturday, 07 June 2014 21:19

Mining & Energy

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MINING & ENERGY/HYDROPOWER

Blessed with natural resources Ethiopia has one of the world’s largest potash reserves and presently inviting many foreign and domestic investors in Hydropower, natural gas and platinum, with affordable labor force Ethiopia is the second leading the continent staggering 48 million labor forces.

With the GDP growth of almost 11% in the last decade Ethiopia has become a destination to foreign investors across many business sectors. This business opportunity did not become an overnight success. Blessed with natural resources Ethiopia has one of the world’s largest potash reserve and presently inviting many foreign and local investors in Natural Gas, Platinum and also in Hydro power.

This emerging country in the hemisphere is becoming a giant attraction for investment either for roads, dams, electric city, mining or any other essential infrastructures.

For instance,

  • Seeking investment in renewable energy projects involving hydro, wind, geothermal, and bio fuels to take advantage of the global focus on renewable energy.
  • Increasing mobile telephone subscribers from 7 to 40 million and Internet service subscribers from less than 200,000 to 3.7 million.
  • Building a 1,500 mile-long standard gauge rail network and creating manufacturing plants for locomotive engines and railway signaling systems.
  • Quadrupling power generation from 2,000 to 10,000 megawatts, building 82,500 miles of new power distribution lines, and rehabilitating 4,800 miles of existing power transmission lines.

These in fact are a few to mention for a country of 95 million people, sitting second in population next to Nigeria with 100 million people.

Ethiopia offers excellent opportunities for mineral prospecting and development. Geological studies have identified a favorable geological environment hosting a wide variety of mineral resources.

According to the Ministry of Mines, Ethiopia has a substantial deposit of gold, tantalum, platinum, nickel, potash and soda ash. Among construction and industrial minerals are marble, granite, limestone, clay, gypsum, gemstone, iron ore, coal, copper, silica, diatomite, etc. geothermal energy resource also exists in good quantity. With regard to fossil energy resources, there are significant opportunities oil and natural gas exploration and development in the major sedimentary basins, namely the Ogden, the Gambella, the Blue Nile and the Southern Rift Valley.

Steps are being taken to improve the situation, including the creation of an environment conducive to private, local and foreign investment. While there is no restriction on private investors in developing any type of mineral resource, the greatest potential is in gold and rare metals, petroleum, precious and base metals, industrial minerals and dimension stones (marble and granite). Prospecting, exploration and mining licenses have been issued to foreign mining companies with an aggregate capital of ETB 11.7 billion in 2008/09. Of the total capital, Birr 509.6 million was injected into the petroleum project alone. In 2012/13, the proceed from the export of gold alone was USD 430.6 million.

The Ministry of Mines is responsible for the processing of license application, regulation of the mineral operations and the promotion of investment opportunities in the mining sector. The Mineral Operations Department is the focal point in the Ministry for the receipt of mining license application of a foreign investor.

Energy

The potential of Ethiopia’s renewable and nonrenewable energy resources is large, with the economically feasible hydropower potential estimated at 45,000 MW. It has large potential for geothermal energy generation. Nine of its major rivers are suitable for hydroelectric power generation.

The private sector can participate in electricity generation from any source and without any capacity limit. Transmission and supply of electrical energy through the Integrated National Grid System is, however, exclusively reserved for the Government.

But, private investors, both foreign and domestic, are allowed to operate an off-grid transmission and distribution of electricity.

Moreover, private investors are highly encouraged to engage in generating electricity in bulk and reach an agreement of power purchase with the Ethiopian Electric Service, a public enterprise, for transmission and supply of electricity through the grid system.

Electricity


One of the most influential actors is the EEP. The EEP is basically responsible for approving approve electric power purchase and network service agreements; and also promote energy efficiency and conservation at national and sectorial levels;  issue energy audit code, energy efficiency standards code, energy efficiency labeling code, grid code, customers' service code, technical inspection code, quality service standard code, building electrical installation code, technical standard code and other codes; and supervise the implementations of same. This emerging country in the hemisphere is becoming a giant attraction for investment either for roads, dams, electric city, mining or any other essential infrastructures.


For those who are very much interested to invest in Ethiopia with the GTP 2015-2020) EEP planned to expand its general capacity to 28,000 MW.
Among those that are open for investments are as follows.

  • 7900 MW form Hydro                 
  • 420 MW from Bio Mass                 
  • 5200 MW from Solar
  • 500 MW from Geothermal        
  • 5200 MW from Wind

Lists of power supply from each station in Ethiopia.

S.No.

Stations

Capacity (MW)

1

Koka

42.00

2

Awash II

32.00

3

Awash III

32.00

4

Finchaa

134.00

4

Finchaa Amerit Neshe

97.00

5

Melka Wakena

153.00

6

Tis Abay I

11.40

7

Tis Abay II

73.00

8

Gilegel Gibe I

210.00

11

Dire Dawa

40.00

12

Awash 7 killo

35.00

13

Tekeze

300.00

14

Gilgel Gibe II

420.00

15

Beles

460.00

Saturday, 07 June 2014 21:18

Health

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Considering our population and also because of the unknown emerging medical problems, Ethiopia needs foreign investors more than any other time. The government implemented opportunities to funnel Direct Investment to Ethiopia to help both the country and ultimately investors to benefit from this untapped resource. Building hospitals, medium and higher clinics, pharmaceutical companies are area of interest for those who would like to invest in Ethiopia.

Over the past 10 years, the government of Ethiopia has expanded health services to local citizens, significantly increasing the number of health facilities in communities throughout the country.

Between 2005 and 2013, the number of small health posts or clinics nearly quadrupled from 4,211 to 14,416, the number of health centers increased from 519 to 3,245, and the number of public hospitals grew from 79 to 127. While this has led to improvements in health service coverage and utilization of services at all levels, providing quality services remains a major challenge.

Opportunities exist for foreign investors in the following areas:

  • Hospitals construction
  • Medical equipments import
  • Medicine
  • Clinics constructions
  • Special doctors (voluntary doctors)

 

Saturday, 07 June 2014 21:16

Construction

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Ethiopia has extensive opportunities in the construction industry, particularly in the construction of roads, residential development, commercial and industrial construction and low-cost housing.  The Government has given special attention to the development of the country’s road network.  A wide range of opportunities exist for foreign investors who meet the standards set forth for the following services;

  • General Contractor Grade One (GC1)
  • Building Contractor Grade One (BC1)
  • Road Contractor Grade One (RC1)
  • Specialized Contractor Grade One (GC1)
  • Water well drilling services (WW1)

Construction machinery and equipment rental services and real estate development are also other opportunities in the sector.

Equipment Requirement for:

  • General Contractors Grade One (GC1)
  • Road Contractors Grade One (RC1)
  • Building Contractors Grade One (BC1)

Item

Equipment

General Contractors Grade One (GC1)

Road Contractors   Grade One (RC1)

Building Contractors Grade One (BC1)

1

Minimum Number of Dozer

4

3

 

Minimum Capacity (HP)

140

140

 

Total Capacity (HP)

680 Hp

480 Hp

 

2

Crane

  • Tower Crane

Minimum Tower Height = 30 m

Minimum lifting capacity 1 tonne

Or

  • Telescopic Mobile crane with Boom extendable up to 20m and above minimum lifting capacity 5 tone

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

1

3

Minimum Number of Loader

2

2

1

Total Bucket Capacity (meter cube)

3.5

3.5

1.5

4

Minimum Number of Crusher

2

2

 

Minimum Crusher Capacity (tone/hr)

60

60

 

Total Crusher Capacity (tonne/hr)

120

120

 

5

Minimum Number of Grader

2

2

 

Minimum Capacity (HP)

100

100

 

Total Horse Power (HP)

250

250

 

6

Minimum Number of Excavator

2

2

2

Minimum Capacity (tone)

20

20

20

Total Capacity (Tone) 0.5 meter cube or above

45

45

40

7

Minimum Number of Roller (vibratory, pneumatic)

3

3

 

Minimum Number of Roller (static)

 

 

 

Minimum Weight of a Roller

10

10

 

Total Weight of Roller

 

36

 

8

Minimum Number of Dump Truck

8

6

6

Minimum Capacity of Dump Truck

100

10

10

Total Capacity of Dump Tuck

2

75

75

9

4W Drive

2

2

 

10

Pick Up (5 quintals & above)

4

4

3

 

Equipment Required for Registration of Specialized Contractors Grade One (SC1)

DESCRIPTION

SC1

 

PAINTING AND DECORATION

 

 

Pick up

1

 

Hand drill machine

2

 

Carpeting tools set

1

 

Tile cutting machine

1

 

Office

1

 

SANITARY INSTALLATION

 

 

Pick up

1

 

Hand drill machine

1

 

Plumbing tool set

2

 

Office

1

 

WOOD AND METAL WORKS

 

 

Pick up

2

 

Press break machine 4mm

2

 

Shear cutting machine

1

 

Rolling machine for tubes and pipes

1

 

Hand drill machine

1

 

Welding machine (40) WT above

1

 

Table vice

1

 

Compressor

2

 

LANDSCAPING /SC-LS/

 

 

Pick up

1

 

Land for plant breeding/100M

1

 

Leveling instrument

1

 

Office

1

Saturday, 07 June 2014 21:13

Manufacturing

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TEXTILES AND GARMENTS

Manufacturing in Ethiopia’s 5 years plan began in 1957 to the present which shows that the country wanted to expand its economy to alleviate poverty and compete with the biggest market in the world.

The value of exports and the Ethiopian textile and garments industry has increased rapidly from USD 10 million to 120 million during the past ten years and Ethiopian government aims to boost exports. By focusing on social and health standard of staffs and the environment, Ethiopian made clothes can be international competitive and acknowledged in the long run.

Ethiopian government has identified several strategic investment areas as a priority that deserves incentives in order to attract the private sector.  One of the major areas that are currently enjoying a significant amount government incentive is the manufacturing sector. With the objective substituting the bulk import of manufactured products, which is consuming the already scarce hard currency of the country, the government has been providing incentives for the private sector interested to be engaged in a range of light industries.

Agro-processing such as production of textiles, leather and food processing and packaging are identified by the government as strategic sectors that have the potential to create a huge amount job while supporting the agriculture sector that mainly depend on small scale farmers, who provide  their products as an input for these industries.

In addition, the government has also been encouraging the local production of medicines and chemicals, with the main intention of saving the several hundreds of millions of hard currency the country spend in importing the products and facilitating the technology transfer in the sector.

According to report of the World Health Organization (WHO), local production of generic medicines promises affordability, accessibility and availability of needed drugs.


Pharmaceutical Sector of Ethiopia 

Currently Ethiopia’s pharmaceuticals market is estimated to reach around half a billion dollars. Frost and Sullivan in its 2012 survey estimated that Ethiopian pharmaceutical market could grow by 14% annually and reaches around one billion dollars by 2018.

There are around nine local pharmaceutical manufacturers in the country, out of which only three have WHO’s Good Manufacturing Practice (GMP), which allow them to export their products and participate in government tenders financed by donors.

Some 200 importers of pharmaceuticals products and medical consumables are also operating in the country. The local industry currently comprises of 22 pharmaceutical and medical supplies, manufacturers, of which nine are directly involved in the manufacture of pharmaceutical products.

The Ethiopian Food, Medicines, Healthcare Administration and Control Authority procurement has reached to $310 million in 2014 from $27 million in 2007.


The Incentives

Current incentives by the government for local production of pharmaceutical products include tax free loans of up to 70% for new investments and up to 60% for upgrading projects for the first five years from the dedicated government bank- the Development Bank of Ethiopia.

There is also a 100% custom duty exemption on import of all granted capital goods, such as plants, machinery equipment, and construction materials. Spare parts at up to 15% of the total value of imported investment capital goods are exempted from customs duty.

Those exporting 50% their products or services, or supplying 75% of their products or services as production or services input to an exporter are exempted from income tax for five years. While those exporting less than 50% of their products or services of their products or those supplying only to the domestic market are exempted from income tax for two years. Investors who invest in priority areas to produce mainly export products will be provided with land necessary for their investment at reduced lease rates.

The tender authority grants local manufacturers a 25% price preference, and also prepays 30% of the tender value upon contract award. The balance of the 70% of the award value can be accessed through the Development Bank of Ethiopia if the local company requires additional capital and is willing to cede the tender to the bank. To encourage products, registration for local manufacturers is also reduced to an average of one month time.


The Result  

There are around nine local pharmaceutical manufacturers in the country, out of which only three have WHO’s Good Manufacturing Practice (GMP), which allow them to export their products and participate in government tenders financed by donors.

Pharmaceutical industry performance report shows that most the manufacturers in the country have been operating below their capacities due to several problems, and supply only around above 20% of the market.

At the same time the variety of products by the local pharmaceutical manufacturers is also limited. They have been producing only 90 of the more than 380 products on the national essential medicines list.

In 2014, local pharmaceutical companies supplied products to the value of close to $44.23 million. In addition to the absence of national strategic and action plan, the Ethiopian pharmaceutical industry has been facing significant challenges such as human resource capacity constraints, limited access to foreign currency and raw material procurement difficulties.

With all the supports extended to the sector and ambitious targets set for the sector, the performance of local manufacturing of medicines was insignificant. Even though the country has planned to producelocally and export worth $20 million pharmaceutical products from 2010 – 2015, it only attains 10% of its target. The local products cover only 20% of the total local market.

The strategy now envisages export of $30 million five years after and $80 million by 2015. It aims to make essential drugs affordable for local people while at the same time creating jobs and cutting the over $300 million dollars hard currency every year, which the country invests for importing pharmaceutical products and drugs

During Ethiopia’s 2nd round Growth and Transformation Plan (GTP II) – 2015-2020, the country envisages to raise the share of domestic pharmaceuticals industry market to 50% and create jobs to close to 7,000 people.

The major manufacturing activities are in the production of food, beverages, tobacco, textiles and garments, leather goods, paper, metallic and non-metallic mineral products, cement and chemicals. Under Growth and Transformation Plan (2010/11 – 2014/15) of the country, production of textile and garments, leather products, cement industry, metal and engineering, chemical, pharmaceuticals and agro-processing are priority areas for investment. Thus there are ample manufacturing opportunities for prospective investors in the following areas:

  1. Textiles and clothing: spinning, weaving and finishing of textile fabrics from the beginning and the production of garments; manufacture of knitted and crocheted fabrics, carpets, sport wears, etc.
  2. Food and beverage products: processing of meat and meat products, fish and fish products, and fruits and vegetables; integrated production and processing of dairy products; processing of animal feed and processing and bottling of mineral water; sugar production; brewing and wine-making, processing of pulses, oil seeds of cereals, manufacture of macaroni/pasta etc;
  3. Tannery and leather goods: tanning of hides and skins up to finished level; manufacture of luggage items, handbags, saddle and harness items, footwear and garments, and integrated tanning and manufacturing;
  4. Glass and ceramic: tableware and sanitary ware, sheet glass and containers;
  5. Chemicals and chemical products: manufacture of basic chemicals (including ethanol) based on local raw materials, including fertilizer and nitrogen, soda ash, rubber PVC granules from ethyl alcohol; manufacture of caustic soda and chlorine-based chemicals; carbon and activated carbon; precipitated calcium carbonate; ballpoint ink, varnishes; soap and detergent, cleaning and polishing preparations, perfume and toilet preparation and pesticides, herbicides or fungicides;
  6. Drugs and pharmaceuticals: manufacture of pharmaceutical, medicinal, chemical and botanical products in the form of tablets, capsules, syrups and injectables;
  7. Paper and paper products: pulp from indigenous raw materials, paper and paper products;
  8. Plastic products: high-pressure pipes, pipe fittings, shower hoods, wash basins, insulating fittings, light fittings, office and school supplies, and fittings for furniture;
  9. Building materials: manufacture of lime, gypsum, marble, granite, limestone, ceramics, tubes, pipes and fittings.

AREAS OF INTEREST

 

AREAS OF INVESTEMENT

Special Zone of Oromia Surrounding  Addis Ababa

Other Areas

 

 

 

 

 

Other Areas

 

FOOD INDUSTRY

1 UP TO 5 YEARS

2 UP TO 6 YEARS

BEVERAGED INDUSTRY

1 UP TO 3 YEARS

2 UP TO 4 TEARS

TEXTILES & TEXTILES PRODUCT

2 UP TO 5 YEARS

3 UP TO 6 YEARS

LEATHER & LEATHER PRODUCTS INDUSTRY ,EXCEPT TANNING OF HIDE  & SKINS BELOW FINISHED LEVEL

 

2 UP TO 5 YEARS

3 UP TO 6 YEARS

WOOD PRODUCTS INDUSTURY

2 UPTO 3 YEARS

3 UPTO 4 YEARS

PAPER AND PAPER PRODUCT INDUSTURY

1 UP TO 5 YEARS

2 UP TO 6 YEARS

CHEMICAL & CHEMICAL INDUSTURY

2 UP TO 5 YEARS

3 UP TO 6 YEARS

BASIC PHARMACEUTICAL PRODUCTS & PHARMACEUTICA PREPARATION INDUSTURY

4 AND 5 YEARS

5 AND 6 YEARS

RUBBER AND PLASTIC PRODUCTS INDUSTURY

1 AND 4 YEARS

2 AND 5 YEARS

OTHER NON – METALLIC MINERAL PRODUCT

INDUSTURY

1 AND 4 YEARS

2 UP TO 5 YEARS

BASIC  MANETAL  INDUSTURY (EXCLUDING MINIG OF MINERALS)

3 UP TO 5 YEARS

4 UP TO 6 YEARS

FABRICATED PRODUCTS INDUSTURY (EXCLUDING MACH ENERY & EQUIPMENT)

1 AND 3 YEARS

2 AND  4 YEARS

COMPUTER ,ELECTRONIC & OPTICAL PRODUCTS

INDUSTURY

2 UP TO 4 YEARS

3 UP TO 5 YEARS

ELECTRICAL PRODUCTS INDUSTURY

2 AND 4 YEARS

4 AND 5 YEARS

MACHINERY AND  EQUIMENT INDUSTURY

5 YEARS

6 YEARS

VEHICLES TRAILERS AND SEMI TRALEIR INDUSTURY

2 UP TO 5 YEARS

3 UP TO 5 YEARS

Saturday, 07 June 2014 21:05

Agriculture

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Agriculture is the backbone of the Ethiopian economy. The sector contributes about 43% of the GDP and 86% of exports. The export of Ethiopia is dominated by coffee and oil seeds, which together accounted to 50.6% in 2008/09. Other principal export commodities are ‘chat’, flowers, pulses, and live animals. 

Ethiopia with 18 major agro-ecological zones and various agro-ecological sub-zones has a suitable climate for growing over 146 types of crops.

Ethiopia has suitable climate and types of soil required for the production of a variety of food crops. The major food crops grown are cereals, pulses and oil seeds. A broad range of fruits and vegetables and cut flowers are among fast-growing export agro-products. Organic coffee, cotton, tobacco, sugar cane, tea and spices are the main commercial cash crops grown in Ethiopia.

Livestock


Interestingly enough Ethiopia has the largest live stocks population in Africa. The CSA data shows in 2013 survey that Ethiopia has 53.99 million cattle, 25.5 million shops, 24.06 goats, 0.92 million camels, 50.38 million poultry, 9.01 equines and  10 million bee  colonies.
To empower the Ethiopian Meat and Dairy Industry Development Institute (EMDIDI) was established to support the Ethiopian Commercial Live Stock Sector through capacity building, through training, and consultancy, market promotion, and expansion as well as investment facilitation.


All these factors make Ethiopia one of the most promising countries to invest and expand business.
With the largest number of milking cows in Africa, Ethiopians potential for diary development is considerable. However, productivity and consumption remain low. Ethiopians currently consume 19 liters of milk per year. This is just 10 percent of Sudan’s consumption and 20% that of Kenya.

 Coffee Farming

According to The Africa Report of December 2, 2015 edition, just in July to this year Ethiopia exported 54, 000 tons of coffee worth 231.9 million compared with the $172.5 million it earned 51,000 tones over the same period last year.
By the end of 2014/15 the export will be risen to 235,000 tones generally $862 million in revenue. It is a recent memory that Ethiopia exported 190, 000 tons in 2013/14 earning $841 million.

Ethiopia produce hit a high plateau by producing and still remain 5th of the top 10 countries in the world. In 2014 alone, according to World Atlas, Ethiopia produced close to 400,000 tons or 397,500,000 kilograms and employed close to 15 million people in coffee production.

 Ethiopia is Africa’s leading producers of Coffee Arabica. The world “coffee” is said to come from Kaffa, a region where coffee has long been a wild crop. The country produces some of the best Arabica coffee in the world.

 In Ethiopia, coffee grows in almost all regional states. The suitable climatic condition varies from the semi-savanna climate of the Gambella plain (500 m.a.s.l) to the continuously wet highland forest zone of the south west (2200 m.a.s.l). Coffee grows in the Ethiopian highlands ranging from 1500 to 2100 meters above sea level. The ideal soil for the crop is slightly acidic with a PH of 4.5-6.5. It requires annual rainfall ranging from 1500-2500 mm with balanced distribution.

            Tea Farming

            Ethiopian tea is some of the best quality tea in the world. In fact, tea from Ethiopia has won acclaim for its taste and aroma. The total area covered by teal plantation in Ethiopia is 2700 ha. Ethiopia produces only black tea type. But it has a potential to grow for all types of tea. Currently, it has a capacity to produce 7,000 tons of black tea per annum. The annual tea consumption of the country is about 5,000 tones.

            The quality of tea mainly depends on climatic conditions, the type of soil upon which the plant grows and the method of processing. In Ethiopia, tea is mostly grown in the highland dense forest regions.

            Sugar cane Plantation

            In Ethiopia, sugar cane plantation started in 1954/55. Sugar has become one of the essential food consumption items in the country especially in urban areas. Though per capita sugar consumption in Ethiopia is one of the lowest in the world, the volume of consumption has been growing steadily since the establishment of the first sugar cane plantations-cum-sugar mills in the early 1950s. As a sweetening food item, sugar is used in preparing all types of drinks (coffee, tea, soft drinks, juices, etc) and foods (pastries, bread of special types, etc). White sugar is mainly exported to the neighboring countries such as Djibouti, Kenya and Yemen in quantities ranging between 30,000 to 50,000 tons per annum.

            The gap between demand and supply required the importation of substantial amount of sugar from abroad. In view of the increasing demand, the government has plans to increase its annual sugar production. Thus, new sugar projects are under construction.

            Oil Seeds Farming

            A variety of oil seeds are grown in Ethiopia. The oil seeds produced are supplied both for the local and international markets. Rapeseed, linseed, groundnut, sunflower and cotton seed serve as raw materials for the domestic edible oil industry. Some oil seeds, including peanuts and sesame, are important export crops. Favorable agro-ecological conditions exist for the production and processing of oil seeds in Humera, Metema, Jawi, Chewaqa and Mankush.

            Horticulture Farming


One of the most profitable investment sectors is horticulture. Even though the country began the flower industry in the late 90’s, Ethiopia became a formidable competitor to Kenya in the flower industry in Africa. Ethiopia, according to Ethiopian Flower Export Agency is targeting to export up to $500 million dollars by the end of 2016 calendar year. Ethiopia is the second largest flower exporter next to Kenya.  

 Commercial floriculture is still a relatively new industry in Ethiopia but it has emerged as a major non-traditional export sector. The rose industry has undergone successful development over the period 1998-2009.

 With diverse agro-climatic zones, the long growing season and the availability of water for irrigation, most fruits and vegetables can be grown well in Ethiopia. Among the major fruits, mango, banana, papaya, avocado, citrus, grape, and pineapple are the most common tropical and sub-tropical types cultivated. While pear and plum are emerging temperate fruits in the country.

 Ethiopia is now the second largest flower exporting country in Africa and the fourth in the world. It is also an ideal location for highland and low land world class flowers. The flower industry is one of the fastest growing sub sectors in the country.

 Currently, Ethiopia exports its cut flower to the Netherlands, France, Germany, Italy, Canada, Norway, Sweden, UK, Middle East, and other EU countries.

            Spices Farming

            The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, coriander, Cummins, cardamoms, corianders and black pepper. Currently, there are nearly 122,270 ha under spice farming. Spice production reached 244,000 tones per year. The potential areas for the cultivation of spice are Amhara and Oromiya, SNNPR and Gambella regions. The total potential for low land spice farming is estimated to be 200,000 ha.

            Cotton Farming

            Cotton is an important crop in Ethiopia. There is a huge potential for cotton cultivation in the country especially in Awash valley where large-scale cultivation under irrigation is found. Other potential areas for cotton cultivation are found in South Omo (Omorate), north western part of the country (Humera, Metema, Quara, and Belles Valley), Gambella, Tekezze valley, Dabus Valley and Wabeshebelle watershed area. Cotton production is well integrated into the rest of the economy with a large number of textile and garment factories relying on domestically produced cotton. Opportunities for the production and processing of cotton in Ethiopia are thus significant.

            Pulses Farming

            Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country.

            Rubber and Palm Tree Plantation

            Ethiopia has the potential for the production of rubber and palm oil.

            Rubber is grown under large scale commercial production in hot tropical and sub tropical humid climatic zones. Moderate acidic or acidic soil is suitable to grow rubber. Therefore, in south-western part of Ethiopia these agro-climatic conditions exist for the production of rubber at commercial scale.

            Palm tree is a perennial tree. It gives a higher yield of oil per unit area than any other oil seed crops. The plant can be grown in tropical and sub-tropical hot and humid climatic conditions. It can also grow in a wide range of tropical soils.

            Cultivation of palm tree can either be carried out under irrigation or using natural rainfall. Many areas in the south-western part of Ethiopia have both the required soil and climatic conditions to grow palm oil in large scale.

            Other Agricultural Products

            A huge opportunity exists for the production of jatropha, castor bean and similar agricultural products for the domestic as well as the export market.

            The estimated potential areas for the cultivation of various agricultural products in all regional states of the country are presented in the following table:

 

Type of Farming

Area (ha)

Region

1

Rice

280,000

SNNPR, Oromiya, Amhara, Benshangul Gumuz, and Somali

2

Maize

1,400,000

SNNPR, Oromiya, Amhara, Benshangul Gumuz, Gambella and Somali

3

Horticulture

763,300

SNNPR, Oromiya, Amhara and Dire Dawa

4

Coffee

426,000

SNNPR, Oromiya, Amhara and Gambella

5

Tea

150,000

SNNPR, Ooromiya, Amhara and Gambella

6

Cotton

3,000,810

Tigray, SNNPR, Oromiya, Amhara, Benshangul Gumuz, Gambella, Afar and Somali

7

Oil Crops

1,601,323

Tigray, SNNPR, Oromiya, Amhara, Benshangul Gumuz, Gambella, Afar and Somali

8

Pulse

3,274,469

Tigray, SNNPR, Oromiya, Amhara, and Benshangul Gumuz

9

Rubber

200,000

SNNPR and Gambella

10

Palm Oil

450,000

SNNPR, Oromiya and Gambella

Total

11,545,902

 

Data Source: Ministry of Agriculture

Maize 

Maize is an important crop in Ethiopia. It is grown in the mid highland areas of the country. There are huge tracts of land in all regions suitable for maize farming. Maize is mainly produced in SNNPR and Oromia regions where there are about 1.77 million hectares under cultivation. 

Wheat and Barley Farming 

Wheat and barley are mostly grown in the highlands and mid highland areas of the country mainly in Oromia (Bale and Arsi Zones) and some parts of Amhara (North Gondar and North Shewa Regions). 

Wheat and barley are the main cereal crops in the country with about 1,095,436 and 1,398,215 hectares under cultivation, respectively. The potential for the private sector in agro-processing and out growers’ scheme of development is significant. It offers excellent opportunities for production of wheat under irrigation in the Afar, Gambella, SNNPR and Somali Regions. 

Oil seeds and pulses 

A variety of oil seeds (e.g. sesame, rapeseed, linseed, groundnut, sunflower, Niger seed, cotton seed, etc.) are grown in Ethiopia. The demand for sesame has been increasing in the global market making sesame an increasingly important export commodity in Ethiopia. In 2008/09, Ethiopia exported 287,000 tons of sesame valued at 356.1 million USD, accounting for 24.6% of the total export earnings. Rapeseed, linseed, groundnut, sunflower, Niger seed and cotton seed also serve as raw materials for the domestic edible oil industry. 

Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country. 

Rice Farming 

Rice could suitably grow in many parts of the country. The predominant potential areas are:

  • West central highlands of Amhara Region (Fogera, Gondar Zuria, Demdia, Takusa and Achefer)
  • North West lowland areas of Amhara and Benshangul Regions (Jawi, Pawi, Metema and Dagur
  • Gambella regional state (Abodo and Etang Woredas)
  • South and South West Lowlands of SNNPRS (Beralee, Weyito, Omorate, Gura, Ferda, Menit)
  • Somali Region (Gode)
  • South Western Highlands of Oromia Region (Illubarbor, East and West Wellega, and Jimma Zones.

Spices

The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, cummins, cardamoms, corianders, and black pepper.  Currently, there are nearly 122,700ha under spice farming. Spice production reached 244,000 tons per year.  The potential areas for cultivation of spice are Amhara, Oromia, SNNPRS, and Gambella regions.  The potential for low land spice farming is estimated to be 2000,000ha

Livestock farming, fishery and apiculture

            Considerable opportunities exist for investments in rearing and breeding of livestock as well as in fresh water fishery development and the production of honey and beeswax.

            The livestock population of Ethiopia is first in Africa and tenth in the world. The sub-sector has large resources, which include 50.88 million cattle, 25.98 million sheep, 21.80 goats and 42.05 million poultry. Opportunities are also available in ostrich, civet cat and crocodile farming.

            Ethiopia’s potential for fishery development is limited to its freshwaters of most of the lakes that are located close to urban areas. The total fish catch potential from these waters is estimated at 40,000 tones per year. However, there is also an opportunity for investment in the construction of aquaculture to produce fresh water fish for local and international markets.

            The current annual production of honey and beeswax of the country is estimated at 43.7 thousand tones and 3,600 tones, respectively. This provides a high investment opportunity in all aspects of the development of this untapped sub-sector in the production, collection, processing and marketing of honey and beeswax. In relation to this, the demand for the bee queen is growing rapidly providing an additional opportunity for investment.

Forestry and Related Activities

            Potential activities for private investors in commercial forestry include the production and marketing of gum and incense, large-scale plantations for timber, the establishment of integrated forest-based industries such as pulp, and paper and chipboard.

Floriculture

Ethiopia is now the second largest flower exporter in Africa. It produces large budded and long stemmed

roses with vibrant colors. Many varieties are available and the main production season is from October to May. Flowers are produced in modern farms around Addis Ababa and in the Rift Valley and are exported via Bole International Airport in Addis Ababa. Temperatures are conducive to floriculture and there are long hours of sunshine – usually for more than eleven hours a day.

Water for irrigation is available in ample quantity and the well-drained soils in Ethiopia are suitable for growing horticultural products. Furthermore, a new environmental law was introduced to assess and regulate environmental impact before horticulural projects start and environmental auditing is conducted regularly to avoid pollution. Investors keen to fulfill their corporate responsibility will therefore be assured that Ethiopia promotes environmentally sustainable flower production. Roses are the most widely produced variety of flowers.

Other types of flowers currently in production include gypsophilia, hypericum, limonium, chrysanthemum, carnations, static and pot plants. The Ethiopian Highlands provide near ideal growing conditions for roses.

Vegetables, fruits, and herbs

Production of fresh vegetables, fruits, and herbs is a priority. Ethiopia produces and exports green beans, snow peas, broccoli, courgettes, okra, asparagus, cherry tomatoes, green chillis, fresh chives, parsley, rosemary, dill, basil, roccola, strawberries and table grapes. Seasons of production are compatible with many neighbouring countries and much of the land is suitable for organic certification.

The export performance of the sector had been limited to a very small volume to neighbouring countries and the European market. However, the export status is changing as more modern farms and processing enterprises are expanding. A huge effort is being carried out by the Ethiopian Horticulture Producers and Exporters Association (EHPEA) to link smallholders with the export market through an out-growers’ scheme. A project to facilitate diversification of production and smallholder farmer participation in exports is also being implemented. Farms who are already involved in export to Europe are certified for Good Agricultural Practice (GLOBALG.A.P) and their produce is handled in pack houses that meet the BRC standard.

Table 1. Agricultural Investment Land transfer facilitation service and requirements from Investors

No

Services

Required conditions and formalities from the investor

1

Provision of information about agricultural investment land potential and other relevant issues

  • investment license
  • supporting letter from the office represented and ID card/passport

2

Facilitation of filling the land request format, endorsement of   the request and provision of   feasibility study format

  • ID card/passport of the investor
  • Power of attorney( If it is from foreign country it has to authenticated by ministry of foreign affairs)
  • Memorandum of Association and Memorandum of Articles if the company is share company or plc
  • Investment license
  • Company Profile/track record/
  • Supporting letter from respective Ethiopian Embassy for foreigners and the Diaspora
  • Letter of interest to pay one year down payment.
  • Bank statement at least a         year showing a balance of 30% of the investment and audit report done by external auditor
  • letter of interest to conduct and submit Environmental Impact assessment study report
  • TIN (Tax payers Identification Number)
  • Clearance for paying the current year income tax
  • Resident and Work permit (For foreigners)
  • confirmation/application letter for the suitability of the land proposed

3

Evaluation and Approval of the business plan

  • Submit business plan prepared as per our standard format

4

Facilitation of Land transfer

 

  • Approved business plan document
  • Comment on the draft lease agreement
  • Final confirmation letter about the suitability of the land up on visiting the area as per the coordinates given on the provisional site plan
  • signed lease agreement
  • receipt of         down payment (with in 20 days after signing the agreement)

5

Provision of ownership certificates/site map

  • Signing         minute of land handing over

 

Table 2. Agricultural Investment land expansion facilitation and requirements from Investors

 

services

Required conditions and formalities from the investor

1

Additional expansion land inquiry

 

  1. The investor who request extra land for the expansion , must submit written documents about the existing investment project performance: namely-

       The existing land lease agreement .

       Land lease certificate

       Business plan of the existing project .

       Development work done

       Site plan of the project

  1. Site plan should include :

       over view of the cultivated land

       Quarters and lounge for the farm workers

       Storage for Agricultural inputs

       Storage for   seeds

       Incineration place for west

       The distance of the project area from water bodies

       Other essential work done on the project .

  1. The investor who request extra land for expansion, must submit ,

       Any loan taken for the project from banks or   any financial institutions.

        Documents of paid loan.

       Receipt for paid land rent .

       Receipt of   Governmental payments

       Audit and   book keeping

       Lists of duty free imported machineries needed for the project and

  1. About expansion land

       Business plan for the expansion project.

       The size of the requested land

 

Table 3. Agricultural Investment support services and requirements from Investors

 

services

Required conditions and formalities from the investor

1

Professional advices and information

  • Official letter of support
  • Identification card/passport for foreign nationalities;
  • Power of Attorney ( in case of agents) ;
  • Supporting letter from relevant institutes;

2

Facilitation of bank loan, tax free import of machineries and equipments; infrastructure and other agriculture investment support services

  • Official letter of request for a support;
  • Investment license and registration document;
  • Renewed trade license;
  • Land rent agreement document;
  • Letter of support from relevant regional investment office;
  • TIN; tax payment confirmation letter and audit report from relevant institute;
  • If it is a Share Company, need   Memorandum of Association;
  • Power of Attorney ( in case of agents) ;
  • Business plan document; if not to submit a letter of pledge to provide the document in 30 days time;
  • Copy of Identification card/passport ;
  • Resident Permit /Foreign Investors;.
  • Work Permit /Foreign Investors;

Data Source: Ethiopian Investment Guide 2014 and Ethiopia Trade and Investment and Ministry of Agriculture