INVESTMENT AND BUSINESSES OPPORTUNITIES. And INDUSTRIALIZATION IN ETHIOPIA
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1 INVESTMENT AND BUSINESSES OPPORTUNITIES And INDUSTRIALIZATION IN ETHIOPIA April 25, 2017
2 National Vision Joining Middle Income Group by 2025 Sector vision Making the country Africa s leading in light manufacturing (Economic Transformation) 2
3 Industrial Development Strategy Leading role of private sector ADLI link (use of domestic raw materials) Export oriented & strategic import substitution industries Focus on labor-intensive light industries (young, trainable & low cost- 70% < 30 yrs) Expansion of Domestic & Foreign Investment 3
4 IDS...contd. Supportive role of state Close cooperation & integration, tri-partite partnership for development : Government & private sector, Owners & employees, Industry & agriculture, education 4
5 Guiding Principles 1. Productivity and competitiveness 2. Market development 3. High value addition and diversification 4. Technology and innovation 5. Fair trade practices 6. Growth and Graduation of SMEs 7. Employment Creation 8. Environmental Sustainability 9. Education and Human Resource Development
6 Growth and & Transformation Plans GTP 1 Performance (2010/ /15) Sector Growth Share of GDP Agriculture Industry Manufacturing LMEs SMEs Service GDP 10.2 GTP 2 Plan (2015/ /20) Sector Growth (av.) Share of GDP 2015/16 actual Growth Share of GDP Agricult ure Industry Manuf LMEs SMEs Service GDP
7 GTP 2 Sector plan as an opportunity Create conducive environment for investment, export market and reduction of BOP Export growth at an average rate of 29% Contribution of manufactured export to reach 25% by 2019/20 and 40% by 2024/25 Manufacturing contribution to GDP to reach 8% by 2019/20 and 18% by 2024/25 Increase the current level of employment (350K) by 1.5 million by 2024/25 Investment to GDP ratio of 41.3 by 2019/20 7
8 Areas of growth 1) production, productivity and competitiveness 2) Investment Quality FDI Domestic investors promotion and support 3) Diversification of existing priority industries a) Textile and garment industries Synthetic fibers Natural fibers Technical textile 8
9 b) Leather and leather products industries rubber, plastics and canvas footwear c) Agro-processing industries : Wood industry Industrial aquaculture and processing Spice industry d) Metal and engineering industries-technological capability Machineries, components and s/parts Iron & steel automotive 9
10 e) Chemical industries Petro-chemicals Construction and paint chemicals Alcohol based chemicals f) Pharmaceuticals industries Herbal medicines Food supplements Pharmaceutical inputs Cosmetics 4) Emerging industries Bio-technology Electrical & electronics Information technology equipments and software, Packaging 10
11 Enablers & conducive environments Instruments for promoting investment Development of industrial, agro-parks and specialized clusters (One stop shop Service) Preferential Cost of investment finance and forex allocation Quality incentives based on performance Export Credit Guarantee Scheme Tax holidays Preferential Transport and Shipping Rates Building competitive capacity through linkages and handholding programs 11
12 Enablers/targets for GTP 2 1) Transport and logistics Global ranking to improve from 104 to 57 Transit time for import-export to reduce by 50% Containerization to reach 100% (currently 7%) Port handling days to reduce from 40 to 3 days Multi-modal transport to cover 90% of cargos 2) Infrastructure a)road access and quality: Express ways to link major transport corridors All weather roads linking urban and rural 12
13 Key enablers targets for GTP 2.. b) Railways c) Air Ongoing three projects and 5 new ones (2,782 kms) Air transport hub of Africa and linkage to key investment countries d) Energy Increase per capita to support manufacturing & export - 17,347 MW by 2012 Improve quality of supply (interruption & down time) - Increase transmission line from 12,825 Km to 21,728 - reduce wastage from 22.3% to 11% 13
14 Key enablers targets for GTP 2 e) Telecom Complete the IT park Increase per-capita use of computers-ict manufacturing development Improve international linkage quality & capacity (20Gbs to 1,485Gbs) 3) Human resource (focus on science & technology) Increase number of TVETs from 1,329 to 1,778 (one in each woreda) Additional 11 public universities Capacity to transfer, adapt and improve technologies-institutes Hands on capacity building through linkages 14
15 Key enablers targets for GTP 2 4) Finance Infrastructure address the factors in the financial framework that inhibit capital supply for operations and expansion. an increased role of development finance institutions (DBE and CBE), including more flexible collateralization rules. 5) Sectoral Policy frame work Design of manufacturing and export focused policies 6) Scalable Firms in Selected Sectors Foster the emergence of firms capable of operating at significant scale and exporting (quality investment).- Model companies 15
16 Integrated Agro-Industrial Parks To attract private domestic and foreign investors to set up agro-processing industries To reduce post-harvest losses, to add value to local content of primary products To provide forward linkages for the processed produce To link farmers and farmer clusters to agroprocessing industry To create jobs and drive rural economic growth
17 Zones within IAIP 1. Industrial zone 2. Specialized agri. infrastructure zone 3. Logistics zone 4. Institutional and amenities zone 5. Multi facility complex utilities 6. Residential zone 7. Greenery and walkways
18 IAIP Development Corridors S.N Region No. of IAIP 1 St Phase Development 1 Oromiya Ahmara SNNP Tigray Somali 1 9 Benishangul 1 10 Afar 1 11 Gambela 1 Total 17 4
19 IPS Development 1.Targeting manufacturing Investment-Quality FDI and domestic 2. Quality infrastructure, skills & competitiveness Focus areas: 1.Light manufacturing (textile, leather, agroprocessing, electronics, & Equip., pharmaceuticals, ) 2. Strategic & import substitution (steel, machinery & equipment, chemical and pharmaceutical) 3. Strategic (energy, ICT and bio-technology)
20 Status of IPs Development 1. Bole Lemi, Hawassa and Eastern IP -operational (3) 2. Mekelle, Kombolcha, D/Dawa, B/dar, Adama, Jima, Bole Lemi 2, Kilinto (7)= under construction 3. Debre Birhan = Bid process 4. Aysha = Bid process 5. Arerti = Award process
21 Companies Operating in IPs 1) Bole Lemi (I)-12 Country of origin No. of Cos India Garment 5 Subsector Subsector No. of Cos China/Taiwan /HK Garment 2 Footwear & Glove 2 S. Korea Garment 3
22 Companies Operating in IPs 2) Hawassa - 25 Country of origin Sub-sector No. of Cos USA Garment 1 India 4 China/HK 7 Sirilanka 2 Singapore 1 Belgium 1 France 1 Indonesia 1 UAE 1 Ethiopian 6
23 3) Eastern (Chinese-private) - 15 Country of Sub-sector No. of Cos China origin Textile & Garment 4 Metal & Engineering 3 Chemical 3 Construction materials 2 Footwear 1 USA/SA Chemical 1 India Food 1
24 Clusters development plan S.N Region Size of Cluster 1 St Phase Development 250 Ha 100 Ha 250 Ha 100 Ha 50 Ha 1 Oromiya Ahmara SNNP Tigray Addis Ababa Dire Dawa Harar Somali Benishangul Afar Gambela 1 1 Total (48%) 18 (35%) Woreda level Developme nts (30%)
25
26 Skill Development Clusters/Centers S. N Region Skill Development Centers 1 Federal SME Agency Sub-sector Institutes (6) TVETs 2 Oromiya (5) 3 Ahmara (4) Ambo PTC Nikemit PTC Shasemenie PTC Adama PTC Jima PTC Gonder PTC Baher Dar PTC Dessie PTC Deber Berhan PTC S.N Region Skill Development Centers 4 SNNP (3) Awassa PTC SODO PTC Bonga PTC 5 Tigray (2) Mekele PTC Shire PTC 6 Others (each 1) ADIS ABABA Winget PTC Afar PTC Diredwa PTC Benishangul PTC Gambela PTC Harar PTC Jigjiga PTC
27 ARIGATOU GOZAIMASU Thank You 27
65,000 peoples income increased. 350,000 financial accounts created. 48,000 jobs created. 300 Million invested. Poverty reduction.
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