Successfully investing in Ethiopia

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last updated on 27 May 2020 | reading time approx. 1 minute

 

 

How do you assess the current economic situation in Ethiopia?

For about 15 years, Ethiopia has enjoyed stable economic growth averaging around 9 per cent, making it one of Africa's frontrunners. Agriculture remains the pillar of the Ethiopian economy. However, the service and industrial sectors (especially the textile and clothing industry) and the construction industry (especially infrastructure) are becoming increasingly important. Despite the fact that all sectors of the country's economy have made great progress in the last decade, structural problems such as the effects of recurrent droughts, low productivity and state control remain.

    

How would you describe the investment climate in Ethiopia? Which sectors offer the largest potential?

The interest of foreign investors in Ethiopia is growing. New infrastructures and industrial parks, as well as the ongoing privatisation of state-owned enterprises speak for the investment location. However, the government's reform policy, which is having a largely positive effect on the country's investment climate, also repeatedly leads to protests and uprisings by parts of the population.

 

Ethiopia aims to reach lower-middle-income status by 2025. The motor for this goal is an expansion of the processing industry and agricultural industrialisation with a focus on agricultural exports. Therefore, these sectors offer the largest potential.

 

What challenges do German companies face during their business ventures into Ethiopia?

Among the biggest challenges German companies have to face, are the difficult bureaucratic processes and the country's lack of foreign exchange. Furthermore, monetary traffic from and to Ethiopia remains highly problematic.

     

What role does Ethiopia play in the renewable energy market in Africa?

Ethiopia has one of the world’s fastest growing economies. Ethiopia’s government has introduced comprehensive and remarkable reform programmes, which have already achieved good results. Particularly noteworthy is the high level of investment in improving the country's infrastructure. The large population of over 100 million people offers low labour costs and a good sales market due to the growing middle class.
           

In your opinion, how will Ethiopia develop?

Ethiopia will become more attractive as an investment location and has the potential to become one of the continent's leading economic powers. It can be assumed that economic growth will remain high by regional standards. Even if the agricultural sector remains the pillar of the economy, the manufacturing industry and the infrastructure sector will continue to grow steadily and contribute massively to the country's economic growth.

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