Business Opportunities in Ethiopia

1. Business Opportunities in Ethiopia Prague, August 2016

2. Ethiopia at a glance

3. Ethiopia is one of the largest countries in the world and it is fourteen fold of Czech

4. Addis Ababa, Ethiopia: Africa’s Diplomatic Capital, and third biggest center of diplomatic hub in the world African Union Headquarter Number of Diplomatic City Missions Brussels 185 Washington D.C 176 Addis Ababa 118

5. Ethiopia is the second most populous country in Africa Source: world meters

6. Ethiopia is the Cradle of Mankind Lucy, 3.5 million years old, and the recent discovery Ramides, 4.4 million years old hominid fossil are discovered in the country

7. Ethiopia is the #1 Coffee exporter in Africa Source: world atlas

8. ETHIOPIA IS ELECTED AS WORLD BEST TOURIST DESTINATION IN 2015 by European Council on Tourism and Trade (ECTT) ETHIOPIA : THE PERFECT CULTURAL DESTINATION; THE LAND CHOSEN BY GOD ! (Report presented by the president)

9. Ethiopia has the biggest and most profitable airline in Africa Ethiopian Airlines profits $175 million in 2014/15 fiscal year which is more than what the rest of Africa’s airline industry posted over the same period

10. Ethiopia is the biggest merchant ship owner/operator in Africa Ethiopian Shipping Lines (ESLSC) has 14 ships it fully owns and operates, which ranks it as the biggest fully African owned company of its kind.

11. Ethiopia is the largest flower exporting company in the world • Ethiopia is the second largest flower exporter in Africa 10

12. Ethiopia: Home to the largest hydro electric power dam in Africa The dam will be the largest hydroelectric Power plant in Africa when completed, and the eighth largest in the world, by producing 6,000 MW The dam is expected to begin power generation at the end of this year.

13. Why invest in Ethiopia?

15. Political and Macro Economic Stability Ethiopia is politically stable and also contributing a lot in stabilizing other neighbor Countries Stable macroeconomic and rapidly growing economy Successfully achieved the first Growth and transformation plan (GTP1) and started implementation of the second GTP (GTP2) in which the country is expected to transform from Agricultural led Economy to Industrialization Ethiopia achieved most of the Millennium Development goals

16. Ethiopia is one of the world’s fastest growing economies Source: World Bank

17. Ethiopia’s GDP growth is greater than comparative African Countries Source: World Bank Source: World Bank

18. Ethiopia: One of the top FDI destination in Africa • In 2014, Ethiopia is the 8th-largest recipient of FDI projects in Africa, • (EY’s attractiveness survey Africa 2015)

19. Ethiopia’s FDI is increasing Rapidly • Top investors: • China • India • Saudi Arabia • Turkey • UK • Netherlands Source: UNCTAD

20. Access to Wide Market • Large domestic Market (About 100 million people) • COMESA (Common market for Eastern and Southern Africa) • 19 member countries • Over 400 million people • AGOA (African Growth and Opportunities Act) and GSP (Generalized System of Preference) of the United States Government initiative, and • EBA (Everything But Arms) Agreement of the European Union

21. Ethiopia’s Demographics Advantages – Large Young Population Source: CIA World factbook

22. Labor • Ethiopia has one of the lowest manufacturing labor costs in the world - hourly manufacturing labor costs about $0.45 • Abundant and trainable labor force

23. Infrastructure

24. Ethiopia has a steadily improving surface transportation infrastructure Road Railway It is planned to Construct about 5000 km Railway line and most of them are under construction. These lines connects the national regions to the center and upgrades the connections with Djibouti

25. Air Transport • Ethiopian airlines has the Largest cargo fleet in Africa • Ethiopian Shipping Lines rapidly expanded its fleet and is the owner of 9 modern ships which is acquired in the past few years

26. Power • Ethiopia would become the 2nd largest exporter of electricity in Africa by 2023 • Ethiopia has one of the world’s cheapest electricity prices (Textile factories pay between US$0.002 and US$0.78 per Kw)

27. Industry Zone Development by Government

28. Industry Zone …. • Bole-Lemi has a total of 342 hectares (Addis Ababa ) • Kilinto: 308 hectares under Master plan and design preparation stage (Addis Ababa ) • Dire-Dawa: 1050 hectares, Multi-purpose • Combolcha: 1123 hectares – Investors need assessment in progress. • Hawassa: 270 hectares - Agro-based industries

29. Education Ethiopia has near universal access to primary education & provides increasingly more opportunities to higher learning There were only 2 public universities 15 years ago; today there are 31.

30. Operating environment Ethiopia ranks higher than comparative African countries in the World Bank’s ease of doing business report for 2014 A high ease of doing business ranking indicates the regulatory environment is more conducive to the starting and operation of a local firm. Source of Data: World Bank

31. Competitive Incentive package

32. Major Investment Opportunities in Ethiopia

33. Major Investment Opportunities in Ethiopia • Agriculture • Manufacturing • Agro processing • Textile and Apparel • Leather and Leather Processing • Chemical and Pharmaceutical • Metal and Engineering

34. 1. Agriculture • Resources and Suitable conditions for Agriculture • 74.3 million hectares of land suitable for agriculture, out of which only about 18 million hectares are currently utilized • 51.3 million hectares of arable land (45% of total land area) • 10 million hectares of irrigable land (only 3% utilized) • 18 major agro-ecological zones and 49 agro-ecological sub zones

35. Agriculture cont.… • Climate suitable for growing over 146 types of crops • Land is accessible through lease for time extends from 25 to 99 years • Lease payment/hectare depends on distance from center, Lower starting from 111Birr/h (Approx. 4.8 €)

36. Livestock Potential • Ethiopia is 1st in Africa and 10th in the world in animal head counts ( 42 million heads of cattle, 25.5 million heads of sheep, 24.4 million heads of goats, 53 million chicken, 2.3 million camels, 7 Million equines) • It is currently exporting live animals and meat to the Middle east and it is the most desired meat in Middle East

37. Agricultural Investment opportunities • Livestock Farming • Apiculture • Aquaculture • Forestry and related activities Food Crops Beverage Crops Horticulture Cotton Sugar cane plantation Rubber and Palm tree plantation

38. Manufacturing Textile and Apparel Ethiopia grows the world’s finest cotton 3 million hectares of land suitable for commercial production. Investment Opportunities Production of yarn, woven, knitted and crocheted fabric Production of Textile Garment

39. LEATHER AND LEATHER PROCESSING • Ethiopia will be a leading exporter of high quality leather products because of the availability of quality hides and skins.

40. Investment Opportunities in Leather and Leather Processing • Leather Footwear and Garment • Luggage, handbags and gloves • Saddle and harness • Integrated tanning and Manufacturing

41. Pharmaceutical Inv. Opp. in Pharmaceuticals Manufacturing of human and Animal Medicine Manufacturing of inputs of basic pharmaceutical products Ethiopian private pharmaceutical market is estimated to be worth between 400 and 500 million USD and growing at an impressive rate of 25 per cent per annum. (Pharmaceutical Fund and Supply Agency (PFSA Ethiopia)) There are approximately 200 importers of pharmaceutical products in Ethiopia

42. Fertilizers and Nitrogen Compound • Caustic soda and soda ash • Soap and detergent • Paints, varnishes, writing and painting inks • Man-made fibers • Magnesium Chloride • Hydrogen peroxide • Coal phosphate Chemicals and Chemical products Industry

43. Paper and Paper Products Manufacturing Pulp, paper and paper packages Plastic and Plastic products Plastic products used as inputs for construction of building, vehicles or other industrial products Plastic pipes or tubes

44. Building materials Non-metallic Mineral products Industry Manufacture of:- Lime Gypsum Marble Granite Limestone Wall cladding and roofing tiles (not from cement) Tubes Pipes and Fittings Glass and Glass Products Ceramics

45. Agro processing Processing of Meat products Processing of Fruits and Vegetables Integrated dairy farm/or processing of Dairy products Processing of Crude and refined edible oil Processing of Starch, cornflakes and edible oil from maize

46. Agro processing Cont.… Processing of Coffee and spices Manufacturing of baby food and similar food products Production of spaghetti, macaroni and other similar products Brewing and wine making Sugar and sugar related

47. There is a construction boom in Ethiopia; urban housing, road, railway, power interconnections, etc… • Real estate developments Construction Source:- ethiopicture.com

48. Foreign Investors have the opportunity to invest in the following First Grade Construction Contracting General Construction Grade one (GC-G1) Building Construction Grade One(BC-G1) Road Construction Grade one (RC-G1) Water well drilling Mineral Exploration drilling Real estate Development There are possibilities to participate in Bids for public projects

49. Other Investment Opportunities Information and Communication Technology (ICT) Mining Tourism Cargo Air transport Service Health Education

50. Major Export items The main agricultural export products are ; Cereals and other Food Crops ...... Wheat, Maize, Barely, Beans, Lentils, Soybeans, Chick peas, etc… Edible Oil crops Sesame seed, Rapeseed, Linseed, Groundnuts, Sunflower, Niger seed and Cotton seed Spices Black cumin, Cumin seed, Cardamom seeds, Garlic, Onion, Ginger root, Rosemary, Pepper, Mustard, etc…