China Dominates Foreign Direct Investment in Ethiopia

Efforts to boost the economy of Ethiopia through foreign direct investment (FDI) have yielded significant results, with the country attracting $3 billion in FDI during the first 10 months of the current Ethiopian Fiscal Year 2023-2024. This figure, though slightly below the year’s target of $3.5 billion, represents a notable increase compared to the same period in the previous year.

Hanna Arayaselassie, chief commissioner of the Ethiopian Investment Commission, highlighted that China has emerged as the foremost contributor to Ethiopia’s FDI landscape, accounting for nearly half of the total inflows. This substantial investment from China underscores the growing economic ties between the two countries.

The success in attracting FDI can be attributed to Ethiopia’s strategic focus on infrastructure development, particularly in areas such as road construction and the establishment of industrial parks. These initiatives aim to create an enabling environment for both foreign and domestic investors, facilitating rapid business setup and operation.

Ethiopia’s vision of becoming a light manufacturing hub in Africa by 2025 has spurred the development of industrial parks across the country. With five industrial parks already operational and plans for additional ones underway, Ethiopia is actively working to enhance its industrial capabilities and attract more foreign investment.

The Ethiopian Investment Commission plays a crucial role in supporting investors by offering a streamlined, one-stop service for obtaining licences and permits. This initiative aims to reduce bureaucratic hurdles and provide investors with the necessary support to navigate the business landscape effectively.

As Ethiopia continues to prioritise economic growth and development, its partnership with China and other foreign investors is expected to play a pivotal role in driving forward its ambitious agenda for sustainable growth and prosperity.