Etiòpia: Invertir a Etiòpia
According to UNCTAD's World Investment Report 2021, FDI inflows to Ethiopia declined by 6% to USD 2.4 billion in 2020, despite the fact that they accounted for more than a third of foreign investment in the sub-region. In total, FDI stock was estimated at USD 27.4 billion in 2020. Manufacturing, agriculture and hospitality industries attracted the highest shares of investment in 2020. According to UNCTAD’ Investment Trends Monitor, global FDI flows rebounded strongly in 2021, but FDI flows to African countries (excluding South Africa) rose only moderately. The government has launched a programme to facilitate foreign investment in the production of personal protective equipment (PPE), and several Chinese companies have already started production. Most foreign investment is directed towards the oil refining, mining, real estate, manufacturing and renewable energy sectors. The country has also taken advantage of the crisis in Bangladesh's textile sector to attract foreign textile companies. China is one of the largest investors, accounting for 60% of new FDI projects approved, with significant investments in manufacturing and services. The other main investor countries are Saudi Arabia, the United States, India and Turkey. The conflict in the Tigray region, political instability, and the slowdown in debt restructuring negotiations are expected to discourage investors in the short term (Coface).
There are a number of constraints to foreign investment, namely the high interference of the State in the economy, poor condition of infrastructure, difficulties related to land acquisition, strict foreign exchange controls, very high transaction costs and weakness of institutions. The Ethiopian government keeps exercising full control over the services sector. Ethiopia has been ranked 159th worldwide, for the ease of doing business in the World Bank's 2020 Doing Business Report. This position was the same that the country occupied a year earlier. Nevertheless, Ethiopia made progress in registering properties. Among others, the country improved the quality of its land administration system by publishing the official list of documents required for property registration (Doing Business). Significant progress has been made in terms of transport infrastructure and electricity production in order to improve Ethiopia's attractiveness. The Grand Ethiopian Renaissance Dam (6,000 MW) on the Blue Nile aims at increasing hydro-electric capacity to 37,000 MW by 2037. The impending privatization of the state-owned railway, maritime, air transport, logistics, electricity, and telecommunications sectors, is expected to boost private investment, as is the creation of special economic zones. The new investment law adopted in 2020 should further strengthen the business environment. The country benefits from abundant and low-cost trainable labour, and enjoys a strategic location giving access to lucrative markets in the Middle East and Europe (but it depends on Djibouti for its access to the red sea and Suez Canal).
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 2,549 | 2,381 | 4,259 |
FDI Stock (million USD) | 24,956 | 27,337 | 31,596 |
Number of Greenfield Investments* | 32 | 11 | 7 |
Value of Greenfield Investments (million USD) | 1,908 | 503 | 132 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Ethiopia | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 3.0 | 5.5 | 7.0 | 5.0 |
Index of Shareholders’ Power*** | 2.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Among the reasons to invest in the country there are:
Ethiopia's weak points in terms of FDI attractiveness are:
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Actualitzacions: January 2023