Investment Opportunities

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Investment Opportunities and Conditions
in Ethiopia Ethiopian
Investment Agency
September 2007
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Ethiopia at a glance

• Area ....... 1.14 million km2
• Geographical Location..Within 15o North of the
  Equator, at cross
• 
  roads b/n Africa, Asia and the Middle East
• Time ZoneGMT 3 Hours
• Population ..... Over 80 million
• Capital City . Addis Ababa, seat of the Federal
  Government, AU,
• UNECA
  
• Rainy seasons .. Receives big rain during June,
  July August and small rain during
  February and March
• Political System... Federal Democratic Republic
• Average Real GDP growth rate (03/04-05/06)10.7

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Main Investment Opportunities in Agriculture

• Food Crops wheat, maize, beans, peas,
  lentils, soybeans, chick peas,
• pulses, etc
• Oil crops rapeseed, linseed,
  groundnuts, sunflower,
• niger seed and
  cotton seed
• Beverage Crops Coffee and tea.
• Cotton 322,000 ha of land
• Feed stocks for bio-diesel Jatropha, Palm oil,
  Castor oil
• Feed stocks for ethanol sugarcane, sugar beet,
  Potatoes, corn, etc.

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Cont

• Horticulture Major horticultural crops grown
  include citrus, banana,
• mango, papaya, avocado, guava, grapes,
  pineapple, passion fruit,
• apples, potatoes, cabbages, cauliflower,
  okra, egg plant, tomato,
• celery, cucumber, onion, asparagus,
  watermelon, sweet melon,
• carrots, green beans, strawberries,
  herbs.
• Floriculture Highland and Lowland world class
  flowers and roses
• Livestock Population
• No. 1 in Africa
• 42 million heads of cattle
• 25.5 million heads of sheep
• 24.4 million heads of goats
• 53 million chickens
• 2.3 million camels
• 7 Million equines

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Continued

• A leading producer of honey and beeswax in Africa
  (3.3 million beehives)
• Modern Commercial livestock breading, production
  processing of meat, milk and egg
• Animal food processing
• Ostrich, civet cat and crocodile farming.

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Textile Garments/Apparel

• Spinning, weaving and finishing of textile
  fabrics
• Production of garments

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Tannery and Leather Products
Heavy leather
Cattle
Hides

• Leather products
• Footwear
• Hand Bags
• Saddle Harness
• Garments
• L.Goods
• upholstery

Light Leather (Bovine)
Goat Skins
Goats
Light leather (SG)
Sheep skins
Sheep
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Food and Beverage Products

• Processing and preserving of meat products
• Processing and preserving of fish and fish
  products
• Processing and preserving of fruits and
  vegetables
• Integrated production and processing of dairy
  products
• Production of crude and refined edible oil
• Production of flour and bakery products,
  including spaghetti, and macaroni
• Manufacture of starch and starch products,
• Processing of animal feeds
• Sugar production
• Brewing and wine making, etc.

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Construction

• comprising of first grade construction
  contracting
• rental of construction machinery
• real estate development

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Tourism

• Islamic Shrines.
• Mosque of Mohammed Al Negashi
• Ancient city of Harar An Islamic city with
  unique Muslim, architectural designs which is one
  of UNESCOs prestigious world heritage sites.
• Mosque of Sheih Nur Hussein
• Great Caves of Sof Omar
• Historic routes
• Blue Nile falls
• City of Gondar- Famous for its medieval castles
  and the design and decoration of its churches
• Lalibela Known as the Eighth wonder of the
  World
• - it is a legendary city curved from solid rock

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Tourism Cont

• Axum the site of Ethiopias most ancient city
  where the original Ark of the Covenant is claimed
  to be housed. It is famous for its seven
  monolithic Stella all hewn from single pieces of
  granite.
• Attractive historical and archeological sites,
  scenic landscape and cultural heritage
• Seat of AU, ECA, and offices of other
  multilateral and bilateral institutions
• Exceptional climate with temperatures ranging
  from 10 to 25 deg.c.
• Therefore, opportunities for private investment
  in hotels, lodges, international restaurants and
  tour operations

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Privatization of Public Enterprises

• Public enterprises ready for privatization
• 6 food processing factories
• 1 garment factory
• 2 Shoe factories
• 4 beverage brewery factories
• 7 Chemical factories
• 4 textile and garment factories
• 8 agricultural firms
• 8 construction firms
• 5 hotels
• 7 metal industries
• 4 mining enterprises

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Areas of investment exclusively reserved for the
Government

• transmission and supply of electrical energy
  through the Integrated National Grid System
• postal services with the exception courier
  service
• air transport services using aircraft with a
  seating capacity of more than 20 passengers

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Areas of investment exclusively reserved for
Ethiopian nationals

• banking, insurance and micro-credit and saving
  services
• forwarding and shipping agency services
• broadcasting services
• air transport services using aircraft with a
  seating capacity of up to 20 passengers

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Areas of investment only in joint venture with
the Government

• manufacturing of weapons and ammunitions
• telecommunication services

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Market

• Domestic market with over 80 million people
• COMESA
• 20 member countries
• 380 million people
• AGOA and GSP
• EBA
• Middle East

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Labour Force

• Abundant trainable labour force
• Labour cost in Ethiopia is cheap even compared
  to African average
• daily laborer 2/day
• Salaries of fresh university graduates.
  110/month - 150/month
• English is the medium of instruction in
  secondary higher education
• A number of international and community schools
  are available

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Ethiopias Business Environment

• Investment Policy and Incentives
• No restriction on the modality of participation
• No discrimination between domestic and foreign
  investors
• Exemption from the payment of customs duty
• Duty free importation of capital goods and
  construction materials
• Duty free importation of spare parts whose value
  is not greater than 15 of the total value of
  capital goods to be imported
• Income tax exemption
• 2 up to 7 years for manufacturing or
  agro-processing and agricultural investments
• Carry forward of losses
• half of the tax holiday period

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Export Incentive Scheme
Ethiopias Business Environment (cont)

• Duty Draw-Back scheme
• Voucher scheme
• Bonded Manufacturing Warehouse scheme
• Export Credit Guarantee scheme

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Ethiopias Business Environment(Cont)
Investment Guarantee and Protection

• Constitution and Investment Law protect private
  property
• Repatriation of Capital and Profit
• Multilateral Investment Guarantee Agency (MIGA)
• Bilateral Investment Promotion Protection
  Treaties (BIPPT)
• International Convention for the Settlement of
  Investment Dispute(ICSID)

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Ethiopias Business Environment(Cont)

• One-stop shop services Time frame
• Issuance of investment permit . 4 hours
• Principal commercial registration . 4
  hours
• Issuance of work permits... 1 hour
• Issuance of business license .. 4 hours

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Ethiopias Business Environment(Cont)

• One-stop shop services
  Time frame
• Technology transfer agreement registration
  ... .4 hours
• Issuance of certificate to foreign investors to
  be considered
• as domestic investors .... 1
  hour
• Pre-approval and post approval services to
  foreign investors
• (facilitation after care services)

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Sources of Foreign Investment projectsJuly 1992
to December 2006
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Why invest in Ethiopia?

• Political and Social stability
• Macro-economic stability
• Strategic location
• Simple investment procedures
• Abundant, cheap trainable labour force
• Competitive investment incentives
• Lowest crime rate in Africa
• Zero tolerance for corruption

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Why Invest in Ethiopia (Cont)

• Welcoming attitude to FDI
• Wide market opportunities
• Transparent laws regulations
• Adequate guarantees protection
• Enormous investment opportunities
• Ethiopias exceptional climate(more than 50 of
  the country consists of highlands, with average
  annual temperatures below 200c)
• Ethiopia is safe, peaceful, stable and very
  nearly free of corruption .Among LDCS, Ethiopia
  is the country with the lowest levels of
  corruption. UNCTAD and ICC, An investment guide
  to Ethiopia, Geneva,2004

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Our Contact Address

• Ethiopian Investment Agency
• P.O.Box 2313 Addis Ababa, Ethiopia
• Tel. [phone](pbx), 251-11- 5539474(Direct)
• Fax[phone]
• E-mailethiopian.invest_at_ethionet.et
• Websitewww.investethiopia.org

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THANK YOU