Addis Ababa December 18/2020 (ENA) The revised Ethiopian Investment Proclamation widens investment opportunities and could attract more FDI as it opens sectors previously closed for foreign investors, provided that ease in investment bureaucracy, logistics, transparency and human power accessibility are addressed, American Chamber of Commerce in Ethiopia President said.
Ethiopia’s new investment proclamation, which has signaled major shift in investment policy, was issued in January 2020.
American Chamber of Commerce in Ethiopia President, Ermias Eshetu told ENA that the reforms are promising in opening multiple investment opportunities for foreign investors.
“The reforms have widened investment opportunities for Foreign Direct Investment in various sectors, in contrast to the previous ones narrowing the investment options solely for domestic investors and the government,” he pointed out.
According to the president, the Ethiopian Investment Commission has widened the law to create conducive investment environment, attract FDI, create jobs and convenient net profit transfer to the home countries of investors.
However, he underscored the need to practically solve some challenges of investors on the ground and genuinely execute the laws in all levels of administration in a coordinated manner.
Ermias said the reforms on papers should be supplemented by easing the investment bureaucracy, logistics, increasing transparency and human power accessibility in reality.
The president revealed that the American Chamber of Commerce in Ethiopia, with 50 member companies, faced challenges of foreign exchange, immigration related procedures, taxing and auditing, customs and logistics, tender and bidding process.
The U.S. constitutes for over 52 percent of investment capital in the world, he stated, but its investment in Ethiopia is minimal due to such solvable challenges.
The American investor, Hiroki Sayama told ENA that he has observed widening of investment opportunities in Ethiopia during his two years stay.
“Before, the investment law seemed more restricted. However, once this reform bill started, the government is working on making investment more relaxed and giving more ease for foreign investors,” Sayama said.
The government is working to attract more Foreign Direct Investment and trying to give more opportunities for foreign investors, he pointed out.
The investor noted that shortening the process to acquire investment license could make Ethiopia more competitive in Africa.
The business registration and licensing procedures in Ethiopia currently take 11 steps, while it is 4 in Kenya, Sayama stated.
The U.S-based Verdant Consulting Manager, Tigest Geremew told reporters that there are various sectors allowed for foreign investors in Ethiopia, which previously were restricted.
However, the Investment Commission requires coordination with relevant institutions to ease challenges facing investors, she said.
A handbook guiding investors where to go and show the whole investment process is also essential, Tigest observed.
The manager also believes that the government should collaboratively work with domestic and foreign consulting firms for the investments of domestic and foreign investors.
The Investment Commission plans to attract 4 billion USD investment this Ethiopian budget year.