Presentation on Ethiopian Economic & Investment Potential By the - PowerPoint PPT Presentation

Presentation on Ethiopian Economic & Investment Potential By the Ethiopian Embassy – Moscow at Chamber of Commerce & Industry of RF May 21, 2018

Basic Facts of Ethiopia ➢ Located at the Eastern part of Africa, ➢ Area - 1.104 mln. Km 2, 10 th largest in Africa, ➢ Population - over 100 Million, 2 nd largest in Africa, ➢ Capital city – Addis Ababa with above 3 mln. Population

ETHIOPIAN ECONOMY ➢ The economy is basically agricultural, ➢ Agriculture employs over 70% of the population, ➢ Agriculture contributes 90% of the export, ➢ The strategy now is to transform the economy to industrial base, ➢ GDP Volume – 81 billion USD (2017)

Ethiopian Economy Sectors’ Share to the GDP Agriculture 18% Service 39% Industry 43%

Economic Activities by Sectors ➢ Agriculture - coffee & tea plantation, cereals, pulses, oilseeds, vegetables, fruits, spices production, livestock, ➢ Industry - textile & garments, leather goods, food processing, construction materials & cement manufacturing, electricity & water supply, ➢ Mining - gold, tantalum, precious stones, etc., ➢ Service sector - trade, banking & insurance, hotel & tourism, transport, telecommunications, education, health, etc.

TRADE SECTOR

Trade Exchange Main Export Goods ➢ Coffee - 26% ➢ Oilseeds -17% ➢ Gold - 11% ➢ Beans - 7% ➢ Flowers - 7% ➢ Livestock and meat - 5% ➢ Leather and leather products - 3%

Trade Exchnage … Main Imports ➢ Capital goods - 42% (including machinery, equipment & transport vehicles), ➢ Consumer goods - 27%, ➢ Semi-finished product -16% (including fertilizer) ➢ Fuel -12%.

Trade with Russia ➢ Export to Russia - Value in USD 28 million (2017), ➢ Import from Russia - Value in USD 61 million (2017), ➢ Trade turnover is low in comparison to the sizes of total population, ➢ Balance of Trade is in favor of Russia

Trade with Russia … Main Export Goods to Russia : ➢ Coffee, ➢ Pulses - kidney Beans, ➢ Flowers, ➢ Plants and their parts, used for perfumery and pharmaceuticals, ➢ Oilseeds – black cumin seeds, ➢ Vegetables & fruit.

Trade with Russia … Main Import Goods from Russia : ➢ Fertilizers, ➢ Vehicles, Electric machines and equipment & parts ➢ Semi-finished ferrous metal products, ➢ Wheat, ➢ Paper and paperboard, ➢ Wood and articles thereof.

Challenges of Trade Exchange ➢ No close connection and knowledge between Business communities of two countries, ➢ Weak work relations between the two chambers, ➢ Absence of direct flight between two capitals, ➢ Trade exchanges usually carried out through third countries, ➢ Absence of direct trade exchange makes product prices uncompetitive, ➢ Lack of common working ground to tackle trade exchange problems.

The Way Out From Challenges ➢ Take joint initiatives by stakeholders to strengthen business ties & work relations, ➢ Active participation of entrepreneurs on international trade fares & exhibitions prepared in both countries, ➢ Establish Ethio-Russian Business Club or Joint Committee to tackle problems encountering in trade exchange,

The Way Out F rom Challenges… ➢ Encourage trade partners to use direct trade routes to make price competitive, ➢ Look jointly market opportunities for Ethiopian new products such as garments & leather products,

The Way Out F rom Challenges… ➢ Stress the concerned bodies to finalize air service agreement, ➢ Make efficient use of newly opened Addis Ababa – Djibouti railway service.

Why Invest in Ethiopia? The Overall Enabling Environment ➢ Favorable investment policy, ➢ Government commitment to support foreign investors, ➢ Stable macroeconomic environment, ➢ Rapid economic growth, ➢ Huge domestic market.

Why Invest in Ethiopia?... The Overall Enabling Environment … ➢ Easy Access to international markets, ➢ Established legal framework, to protect private property against expropriation, ➢ Industrial parks & infrastructure facilities for investment, ➢ Energy, water and labor supply at relatively low cost, ➢ Low level of crime.

Why Invest in Ethiopia?... The Growing Market: ➢ Large domestic market - Population – over 100 million ➢ Free trade Agreement reached by African Union ➢ Proximity to the Middle East market ➢ Duty-free given by USA & EU, ➢ Preferential Regime by Euroasian common market, China, India, Japan, South Korea

Why Invest in Ethiopia?... Investment Incentives : ➢ Duty-free imports of machinery and equipment for the investment, ➢ Exemption from income tax from 2 to 9 years, up to 10 years in industrial parks ➢ Access to long-term loans up to 50% of the project cost from the Development Bank of Ethiopia for priority projects, ➢ Loss carry forward (for half of income tax exemption period), ➢ Special export incentives (Duty drawback system, Voucher system, Bonded manufacturing warehouse scheme).

Why Invest in Ethiopia?... Investment guarantees: ➢ Constitutional protection of private property, ➢ Free transfer of profits, dividends and interest rates on external debt, ➢ Signatory to the "International Convention for the Settlement of Investment Disputes between States and Nationals of other States (ICSID), ➢ Membership in the Multinational Investment Guarantee Agency (MIGA), ➢ Membership in the World Intellectual Property Organization, ➢ Bilateral agreements on promotion and mutual protection of investments, ➢ Bilateral agreements on the avoidance of double taxation.

Why Invest in Ethiopia?... Competitive Factor Costs: ➢ Favorable climate, ➢ Relatively cheap land lease, ➢ Water & Energy supply at competitive price, ➢ Relatively cheap, unskilled and semiskilled labor supply, ➢ Ready made agro-industrial parks, ➢ Good transportation facilities - air, road and railways.

Overall Investment Opportunities ➢ Agriculture & Agro-processing, ➢ Leather industry, ➢ Textiles and garments manufacturing, ➢ Metal engineering, ➢ Chemicals & Pharmaceuticals,

Overall Investment Opportunities… ➢ Construction materials production, ➢ Real-estate development, ➢ Mining, ➢ Energy, ➢ Hotel & tourism, ➢ Industrial parks.

Infrastructure Facilities

Investment Opportunities for Russian Companies ➢ Mineral Resources - natural oil & gas, gold exploration, ➢ Agriculture - horticulture business (flower, fruits & vegetables), ➢ Agro-processing machinery - animal feed processing, ➢ Energy production, ➢ Services - hotel and restaurant, ➢ Chemical and pharmaceutical industries.

Joint Venture Projects Proposed by Ethiopian Government: ➢ Sesame Processing, ➢ Corn Processing, ➢ Coffee Processing ➢ Packaging - Glass, Plastic and Flexible, Metal & Paper Packaging, ➢ Leather Accessories manufacturing Plant, ➢ Garment Accessories and Labels manufacturing Plant

Joint Venture Projects … Proposed by Private Sector in Agro-processing : ➢ Corn-soya blend and baby food, ➢ Extraction of oil from moringa, jatropha, castor, niger seed for medicine, ➢ Food processing flour mill & production of pastas, ➢ Cleaning, hulling & packaging of sesame, grains, oilseeds for local & foreign markets.

Joint Venture Projects … Proposed by Private Sector in Agro-processing: ➢ Wheat flour, biscuits, maize, dietary supplementary food, ➢ Production of complimentary food, snacks,Edible oil, animal feed, ➢ Processed milk, processed cheese, animal feed, ➢ Processing of white pea beans, light brown pea beans, cereals, ➢ Coffee processing,

Joint Venture Projects … Proposed by Private Sector in Manufacturing: ➢ Steel, ➢ Plastic, ➢ Paint plants, ➢ Electric wire and cable plant, ➢ Real estate development, ➢ Mineral water bottling,

Joint Venture Projects … Proposed by Private Sector in Manufacturing … ➢ Construction of buildings, dams, power facilities, ➢ Open ended yarn, sing spun yarn, socks ➢ T-shirts, polo shirts, overalls, sports-wear, trousers, work-wear, ➢ Knit garments, woven garments, fabric, ➢ Shoes production.

Embassy’s Support for Russian Investors ➢ Supplying Ready Projects for Joint Venture ➢ Facilitating pre-investment visit, ➢ Supplying other necessary information for investment

IMPORTANT INFO LINKS ➢ Ministry of Mines, Petroleum and Natural Gas(MoMPNG) - www.mom.gov.et ➢ Ethiopian Revenue and Customs Authority - www.erca.gov.et ➢ Ethiopian Investment Commission - www.investethiopia.gov.et ➢ National Bank of Ethiopia - www.nbe.gov.et ➢ Development Bank of Ethiopia - www.dbe.com.et ➢ Ethiopian Chamber of Commerce and Sectoral Associations - www.ethiopianchamber.com ➢ Addis Ababa Chamber of Commerce and Sectoral Associations - www.addischamber.com ➢ Ethiopian Horticulture Producers & Exporters Association (EHPEA) - www.ehpea.org ➢ Industrial Parks Development Corporation (IPDC) - www.ipdc.gov.et ➢ Ministry of Industry - http://www.moin.gov.et ➢ Ministry of Trade - http://www.mot.gov.et

Invest in Ethiopia Thank You