Information for Investors

Telecommunications

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.

Education

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.

 

 

 

Electric Power

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.

Tourism

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.

 

Mining & Energy

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

Health

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)