Wednesday, July 24, 2024
BusinessIndian investors wrestle with uncertainty in Ethiopia

Indian investors wrestle with uncertainty in Ethiopia

Ethiopia’s challenges weigh on Indian investments

Ongoing conflicts and economic uncertainty are taking a toll on Indian investments in Ethiopia, despite the country being the second largest foreign investor in Ethiopia. ……..

Out of the 650 Indian investments registered with the Ethiopian Investment Commission (EIC), less than half are actively operating on the ground, signaling a challenging landscape.

Approximately 300 Indian factories are currently in operation in Ethiopia, with a majority located in and around Addis Ababa, according to information from the Indian Embassy in Addis Ababa.

Despite certain investors closing down their businesses and others adopting a cautious approach, diplomats at the Embassy are optimistic about the improving investment climate in Ethiopia.

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For Robert Shetkintong, the Indian Ambassador in Addis Ababa, the most important aspect of relations between the two countries is trade and business, owing to thousands of years of relations.

“It will not be correct for me to say that all Indian investors are happy,” he said, speaking about the current situation in Ethiopia and investor frustration. “But if you look at the overall picture, most of the Indian investors in Ethiopia are happy.”

Data from the Commission reveals that Indians rank second in terms of new investments in Ethiopia this year. China leads the pack with the highest number of businesses operating in the country, followed by India and Kenya is in the third position.

The cumulative value of registered investments by Indian companies in Ethiopia stands at five billion USD, with three billion USD operational on the ground, the Ambassador told The Reporter.

India also ranks second in bilateral trade with Ethiopia, accounting for USD 2.8 billion traded between the two countries last year, according to the data from the Embassy.

“That is a substantial presence,” the Ambassador said. He underscored the enduring historical and cultural ties that strengthen the bond between India and Ethiopia.

Currently the first most populated country in the world, India accounts for 24 percent of the USD 18 billion in imports Ethiopia made in the previous year, the second highest following China.

India’s share as an Ethiopian export destination was 6.2 percent of the USD 4.1 billion earned in the same year, following Saudi Arabia, the United Arab Emirates, Japan, Israel, South Korea, and China, consecutively.

Including the 15 textile companies working in different industrial parks, the active companies in Ethiopia provide employment opportunities to 75,000 Ethiopians.

“Jay Jay Textile in Bole Lemi Industrial Park alone employs 9,000 Ethiopian nationals,” he said.

Indian investors had 12 factories in Mekelle and one in Shire when the war in north Ethiopia erupted. Some of the factories were damaged, according to the Ambassador, who says a few of the owners are also traveling back to Tigray to evaluate the damage to their investments.

“If we have to progress, we will have to deal with these challenges and make them opportunities,” the Ambassador said. “Even during the COVID-19 period alone, there were 36 new Indian investments.”

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