Ethiopia –Land of Origin

Investment Opportunities

Consulate General of Federal Democratic

Republic of Ethiopia

Mumbai – India

World Trade Center

Oct. 29, 2018

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Fast growing economy 11% avg. growth for the last the last decade.

2nd most populous country in Africa Close to 100 million people

Untapped resources 74 million hectares of arable land Livestock- agro-processing, leather Export: Leading exports, gold 21

%,Coffee19% followed by live animals, oilseeds, flower 2016

GDP per capital 800 USD

• Average life expectancy 66y ears,

Language: Working Federal working language Amharic,

English is widely spoken

Ethiopia: Brief Country Profile

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Why Ethiopia?

1. Fast and sustainable economic growth and development,

– Double digit average growth of for the last decade,

– The first fast growing economy in Africa,

2. Stable economic and political environment

– Political, security, macroeconomic stablity

3. Access to international markets,

– AGOA, EBA, COMESA

4. Labor Force

– abundant and wage competitive labor force, minimum average wage of $50 to 100,

– Easily conversant and Trainable

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Why Ethiopia? Cont’d….

5. Fast growing infrastructure and very cheap green energy

– Transport: Airlines, Railway, Express Ways

– Energy: Hydropower, Wind, Solar projects

– Industry Parks

6. Attractive investment incentives focusing on export

7. Naturally conditioned weather (no need for heater or cooler)

8. Active and Continuous Government Support

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Priority Sectors:

Focus on Manufacturing Industries

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Ethiopian Investment Policy

• The Ethiopian Constitution and the Investment Law guarantee

protection of private property and investment

• In addition, Ethiopia is a signatory of 29 Bilateral Investment

Treaties and 6 Multilateral Investment Agreements that stipulate:

• Protection of private property rights

• Principle of National Treatment

• Repatriation of capital and profit

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Investment Policy initiatives

• Incentives for domestic & foreign investors

o Income tax exemption (2 to 8 years)

o Exemption from the payment of customs duty

o Carry forward of losses: half of the tax holiday period

o Export Incentive Schemes: Duty Draw-Back scheme, Voucher scheme, Bonded Manufacturing Warehouse scheme and Export Credit Guarantee scheme

o Hand holding Support through the Sector Supporting Gov. Institutes

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Investment Incentives

Repatriation of investment and profits

Repatriation: of profits, dividends, principal and interest payments on external loans out of Ethiopia in convertible currency

Hiring Expats

The right to employ expatriate experts and management staff; there is also an exemption of 2 years corporate income tax for exporting companies of expat employees

Customs duty exemption

on capital goods, construction materials and partially on spare parts (as much as 15% of the total value of capital goods)

Income tax exemption

2-8 years, may be more for manufacturing of textile and garment inside IPs and 10-15 years for Industrial Park Developers

Other investment Incentives

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Market Opportunities

• Domestic market with over 100 million people

• COMESA

19 member countries

Over 430 million people

• AGOA of the USA Government initiative

• EBA (Everything But Arms) initiative of the European Union

• Proximity to the Middle East

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Proximity of Ethiopia to Other Parts of the World

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Industrial Parks Development

By 2017 Cluster

Hawassa Apparel & Textile

Mekelle Apparel & Garment

Adama Textile

Dire Dawa Apparel & Textile, Assembly

Kombolcha Apparel & Textile

Kilinto Pharma, Food & Beverages

Bole Lemi Apparel and Textile 10/31/2018

Hawassa Eco-Industrial Park -

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Mekelle Industrial Park

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Adama Industrial Park

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Kombolicha Industrial Park

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Major Investment Opportunities

A) Manufacturing Sector

– Textiles & Garments/Apparel

– Production of textile fabrics

– Production of garments

– Production of other textile products (carpets,

curtains, etc.)

– Leather & Leather Products

– Tanning of hides & skins up to finished level

– Leather goods & articles (shoes, garments, etc.)

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Major Investment … Cont’d

• Chemical Products

• 4. Pharmaceutical Products

• 5. Metal Engineering & Steel Products

• 6. Agro-processing, i.e. processing of horticultural, cereal, edible oil, sugar,

animal feed, etc products, brewing and wine making, etc.

B) AGRICULTURAL OPPORTUNITIES

– Rubber Tree Plantation

– Sugarcane Plantation

– Horticulture

– Floriculture

– Fiber Crops : Cotton, jutes, etc.

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Major Investment … Cont’d

C) CONSTRUCTION OPPORTUNITIES

• Grade 1 construction contracting

• Real estate development

• Water works construction contracting including water-well

drilling

• Specialized construction contracting (e.g. electro-

mechanical)

D) TOURISM OPPORTUNITIES

• Star rated hotels lodges, restaurants

• Tour operations

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Major Investment … Cont’d

E) MINING • Exploration for gold and related base metals;

• Exploration for Tantalum;

• Assessment for iron and phosphate occurrences;

• Exploration for platinum group elements (PGE);

• Exploration for epithermal gold and associated metals;

• Advanced exploration and development in joint venture;

• Exploration for petroleum;

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Major Investment … Cont’d

F) Energy

– Construction of Hydropower power dams, Geothermal and wind power on EPC arrangement;

– transmission construction;

– Manufacturing of Solar technologies;

– Petroleum fuels replacement with bio-fuel blending (10% ethanol blending is operational);

– Introduction of electric rail system for major cities.

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Major Investment … Cont’d

G) Water

• Dams and related hydraulic infrastructure;

• Irrigation schemes;

•Water supply schemes including sewerage system;

•Drilling of wells for domestic water supply and irrigation;

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Ethiopia – India Bilateral Trade Relation

• Relationship traced back to Axumite period, around 1st C AD.

• India and Ethiopia have long-standing economic and commercial relations, which are centuries old and can be.

• During the Axumite Kingdom, Indian traders had links with the ancient port of Adulis in the eastern part of Ethiopia and traded silk and spices for gold and ivory.

• In recent years, grown significantly, especially in the areas of trade, investment, agriculture and infrastructure projects.

• India is the second largest in capital and number of companies, above 600, invested in Ethiopia, next to Turkey and China respectively.

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Ethiopia’s Exports to India

• Major imports by India from Ethiopia were:

–pulses,

–precious and semi precious stones,

– vegetables & seeds

– leather and spices.

• India is the second most important source of imports for Ethiopia, contributing 7.4% of all of Ethiopia’s imports next to China.

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India’s Export to Ethiopia

• Bilateral trade stood at US$1.2 billion in 2015,

– India’s exports to Ethiopia were over US$1.15 billion

– Imports - US$65 million.

• Major export Items of India

• Iron & Steel Products, accounting for 17.2% of India’s total exports to Ethiopia.

• followed by rice (12.7%),

• pharmaceuticals (10.6%),

• transport equipment (5.6%),

• machineries (5.5%),

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India Export to Ethiopia…

• sugar (5.2%),

• paper products. (4.5%),

• plastics (3.3%),

• rubber(3.2%),

• textile and clothing (3.0%), etc.

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Some Major Indian Companies Invested in Ethiopia

• Asian Paints • Arvid • Raymonds • Kanoria • Fontana Flower Plc. • Bajaj Manufacturing Plc. • Samaka Stones Pvt Ltd.

• Telecommunications Consultants India Limited (TCIL),

• EXIM Bank of India, • Oxford Group of

Companies, • Roto PLC, • Whitefield Cotton Farm

PLC, • Ruchi Agri PLC, • Verdanta Harvests PLC,

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Some Major Indian Companies ….

• Cadila Pharmaticals

• Tata International

• Karuturi Global Plc.

• Kanoria Africa textile

• Mohan Group of Campanies

• Anmol Products Ethiopia Plc

• Neha International PLC,

• Asian Paintings,

• Arvind Mills,

• Allana sons Ltd.,

• Kanoria,

• SVP Group,

• Fontana Flower PLC,

• Balaji Manufacturing PLC,

• Samaka Stones Pvt. Ltd. Co.,

• Velocity Apparel etc.

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Thank You!

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