Ethiopia's Investment Prospects: A Sectoral Overview

African Review of Economics and Finance, Vol. 4, No. 2, June 2013: 203-246

44 Pages Posted: 19 Dec 2012 Last revised: 20 Jul 2013

Henok Assefa

Precise Consult International PLC

Derk Bienen

BKP Development Research & Consulting GmbH; Addis Ababa University

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH

Date Written: June 1, 2013

Abstract

Ethiopia is in the midst of a sustained growth surge that is becoming increasingly broad-based, building on major improvements in educational attainment, improved health outcomes, and infrastructure capacity in terms of access to power, transportation and telecommunications. The Government’s Growth and Transformation Plan sets ambitious targets for further improvements in these areas, together with significant reforms aiming to improve trade logistics, including through the roll-out of the authorized economic operator program across the growing number of export-oriented industry parks and a major improvement in the main export corridor to Djibouti. This industrialization push is taking place at a time when global trends are coming together to provide Ethiopia an opportunity to integrate its economy into the modern “Made in the World” system of production, including by attracting some of the labor-intensive production that is currently migrating out of China and other East Asian economies as wage rates rise in those regions. This paper considers Ethiopia’s prospects to succeed in this endeavor. It provides a brief overview of Ethiopia’s investment prospects at the macroeconomic level, including a macro scan of overall economic management and performance indicators and a horizontal scan of the framework for investment. It then summarizes the investment prospects in several major sectors of the economy in light of Ethiopia’s emerging capacities and the global developments: agriculture, mining, oil & gas, economic infrastructure, manufacturing, and selected services, including health and tourism.

Keywords: Ethiopia, investment, growth and transformation plan, sectors

JEL Classification: F21, F63

Suggested Citation

Assefa, Henok and Bienen, Derk and Ciuriak, Dan, Ethiopia's Investment Prospects: A Sectoral Overview (June 1, 2013). African Review of Economics and Finance, Vol. 4, No. 2, June 2013: 203-246. Available at SSRN: https://ssrn.com/abstract=2190967 or http://dx.doi.org/10.2139/ssrn.2190967

Henok Assefa

Precise Consult International PLC ( email )

Edna Mall Building, Suit 309
Addis Ababa
Ethiopia

Derk Bienen

BKP Development Research & Consulting GmbH ( email )

Jutastr. 14
München, 80636
Germany

Addis Ababa University ( email )

King George VI St
Addis Ababa, 1000
Ethiopia

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

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