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Ethiopia provides the following guarantees
to foreign investors. Foreign investors are guaranteed on their
capital repatriations, Remittances of dividends and interests
under the country’s Investment proclamation. In respect of an
approved investment, a foreign investor has the right to make
the following remittance in convertible currency out of Ethiopia
at the prevailing exchange rate at any given time
Profits and dividends accruing from an investment
Principal and interest payments on external loans
Payments associated with technology transfer of management
agreements;
Proceeds from sales or liquidation of an enterprise; proceeds
from sales or transfer of shares
or of partial ownership of
an enterprise to a domestic investor;
Compensation paid to a foreign investor;
Expatriates employed in an enterprise may remit, in convertible
foreign currency, salaries and other payments accruing from
their employment in accordance with regulations or directives
of foreign exchanges of Ethiopia.
Guarantee Against Expropriation
The FDRE has constituted the protection of private property.
Besides, the country’s Investment proclamation also offers investment
guarantee against measures of expropriation and nationalization
that may only occur for public interest and in compliance with
the demands of law where expropriation is to take place, the
government guarantees the provision of adequate value of the
property which would promptly be put in to effect on time
Labour
Ethiopia has abundant, inexpensive, disciplined and energetic
labour force. Private investors can easily find and recruit
young and energetic labour force at about the same rte. The
country also has sufficient skilled work force Its skilled labour
force most often speak and write in English moreover, the amount
of salary paid for both unskilled and skilled workers is reasonably
lower by and standard
Ethiopia’s labour law which was prepared inconformity
with recognized international labour norms and standards, provides
adequate provisions for the beginning and termination of employment
with out infringing investors rights.
An investor intending to recruit expatriate employees for top
management positions has the right of doing so with the consent
of the Ethiopian investment commission (EIC) In line with this,
the Ethiopian Investment Commission favorably issues work permits
to expatriate staffs such collaboration include.
Guaranteed external market access
Export product and production know-how
Exports marketing know-how
Export business management know-how
Raw materials and intermediate inputs required for export
production.
An impressive stride in Investment
The Ethiopian government adopted a fee market economic policy
in 1992. Since then, the government has implemented a wide range
of reform programs with the aim of promoting economic liberalization
to encourage private investment. Among other, the reforms include,
privatization of public owned enterprises liberalization of
foreign trade, deregulation of domestic prices nd the devaluation
of exchange rate.
Next a liberal investment code was enacted after
which the Ethiopian Investment commission has been established.
Ever since the commission has been making relentless efforts
to create conducive investment environment to hasten the activities
of the private sector in the country’s economic development.
Thus, the various measures under taken so far
have created conducive business environment particularly, in
encouraging foreign direct investment (FDI) the statistical
data (1992-2003) exhibit a total of 8297 investment projects
with an outlay of 91.5 billion Birr of these projects 2156 have
been made operational while 1265 others are under way for implementation
however, the amount of foreign investment secured in the past
11 years show quite low results compared to the achievements
of local investment activities.
This scenario however, challenged the Ethiopian
investment commission and provoked in to take a series of fundamental
reform measures to further create a conducive investment environment
n the country.
Basically the reform measures amended the county’s
investment code for the fourth time with due consideration to
global economic situation and the actuality at home. The amendment
of the code thus broadened the sectoral coverage for foreign
participation; including telecommunication, power and air services.
Almost all sectors have how been liberalized to widen scopes
of participation for foreign investors.
In respect of the services the commission has
launched recently, as part of an ongoing civil service program
with the aim to improve efficiency of the service delivery,
a new initative has been taken to identify the major impediments
to efficient service deliveries.
To address to bottlenecks the commission together
with the ministry of trade and Industry, has introduced radical
reform programmes. Accordingly, all bureaucratic hurdles that
used to hamper the service deliveries are now eliminated. Several
unnecessary procedures that used to consume too much time are
very simplified. Hence, investors need not expect to visit various
government offices for approvals. As a result of this radical
reform, the issuance of investment permit, which on the average
used to take 215 days for individuals and 180 days for associations,
is now minimized to two days; operational license that used
to take 255 days on the average, is now issued in a day or two.
Work and residence permits are now issued in a matter of an
hour. According to the recent assessment of the commission on
the actual implementation of the service reform, all service
deliveries have been found to be in accordance with the established
standards.
In an environment where all promotion agencies
compete to attract FDI world wide, there exist strong need to
adopt best practices in investment promotion services. In this
regard, the Ethiopia Investment commission has developed a three
year strategic plan with the aim of promoting the country as
an attractive destiny for investment This strategic plan redefines
the vision and mission of the commission.
The vision of EIC is to be an efficient and
competent promotion agency capable of marketing Ethiopia as
one of Africa’s best investment destinations. The redefined
mission of the commission is also to aggressively promote the
immense investment opportunities, exceptional efficient services
conducive to attracting investment, particularly foreign investment
in to Ethiopia.
To provide all investment related services under
a single roof, the Ethiopian Investment commission has thus
been strengthened as a true one-stop shop facilitator and a
single entry gate fro in ward investment destination in Ethiopia,
Apart from the various services that it renders
as one-stop-shop, EIC has also been mandated to facilitate the
allocation of land for investment. This responsibility is believed
to highly alleviate difficulties investors used to face in acquiring
land on time. Moreover, the commission is also vested with the
power to notarize memorandum of association and articles of
association, grades construction contractors and registers technology
transfer agreements.
Fortunately, the series of reforms successfully
implemented so far, have already began bearing fruits. In the
past four years, the EIC has issued investment permits to 21
foreign projects only. However, after the implementation of
the reform, 180 foreign investment projects, with aggregate
capital of Birr 13.75 billion have been issued with investment
permits in a matter of six months only.
Now, the EIC is believed to have laid its solid foundation to
transform itself to a new competent promotional position of
an agency. Investors that have obtained investment permits after
the realization of the reform programme have expressed their
satisfaction over its services delivery.
In this regard, the guiding principle
is ‘ the days of investment red tape are over, not red tape,
but red carpets awaits investors’ in Ethiopia.
Ethiopia’s export performance and Future prospects
Ethiopia’s exports have continued to be narrower
with about 84 percent of the total exports valued at birr 3.7
billion in 200/01. The strategy is therefore, to expand and
facilitate the diversification of export products through increasing
production of non-traditional exportable items which include
manufactured and processed goods, horticultural products, fruits,
vegetables, minerals and other exportable goods and services.
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