Thursday, July 25, 2024
BusinessCompanies to invest USD 2 bln in textile sector

Companies to invest USD 2 bln in textile sector

The Ethiopian Investment Commission (EIC) this week announced that various foreign companies have pledged to invest USD two billion in the textile and garment manufacturing sector.

At a press briefing held on Tuesday, EIC commissioner, Fitsum Arega, disclosed that various companies from China, Turkey and India have pledged to invest USD two billion in the textile and garment sector. Fitsum said more Chinese textile and garment firms are coming to Ethiopia as a result of the intense promotional work the commission has done. According to him, a single Chinese company is to make a USD one billion investment in a textile project in Adama town.

Fitsum said that the EIC is participating in global textile and apparel forums being held in Asia, the US and Europe; attracting international textile and garment companies particularly from China, India and Turkey. “Using a joint investment initiative made with the Chinese government, we succeeded in attracting several Chinese companies to Ethiopia,” Fitsum said.

In addition to garment and textile, the EIC is striving to attract more investment in the horticulture, pharmaceuticals and food processing sector. The commission has set a target to attract USD four billion direct investment to Ethiopia in the current fiscal year. 

According to Fitsum, in the first six month of the fiscal year, the commission has registered a FDI worth USD 2.2 billion, up by 22 percent compared to the FDI registered last year in the same period.               

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 “The development industrial parks, the availability of large work force and one stop service EIC has launched is attracting more investment to the country. There is also a huge market opportunity which foreign investors can exploit through the trade agreements signed with countries like the US.”

“Ethiopia is a huge country with a population of 100 million. This by itself is a market. But there are also market opportunities where company can produce in Ethiopia and send their products free of tax and quota,” he added.

The Ethiopian Industrial Parks Development Corporation is developing industrial parks in different parts of the country. The Bole Lemi I and Hawassa Industrial Parks have been completed and has commenced operation. The Mekelle and Kombolcha Industrial parks have been partially completed while the construction of Adama and Dire Dawa Industrial parks are nearing completion. Bole lemi II industrial park specially designed to accommodate pharmaceutical factories is also under construction.

A private industrial park has been developed by Chinese firms in Bishoftu town called Eastern Industrial Park. CCCC, George and Huajian are also developing private industrial parks.

According to the EIC, the industrial parks have created 50,000 jobs and exported goods worth USD 42 million in the first six month of the current fiscal year.  

The commission believes the recently signed Continental Free Trade Agreement by African nations would create new market opportunities for manufacturers based in Ethiopia.     

The political unrest unfolding in the country in the past two years has affected the growing investment activity in the country. Fitsum said that the commission has been exerting effort to restore the investors’ confidence. “We constantly have consultation forums with investors. We have explained to them that this is a temporary problem that will be solved. The investors did not interrupt their work but they want to wait and see the situation. Those who are operational want to make sure the country will return to its peaceful development path before making further expansion work. Hence the responsibility lies on we Ethiopians in restoring the investors’ confidence and use the existing opportunities. Other wise if we squander the opportunities it will take another 20 years to promote Ethiopia as a preferred investment destination in Africa.”           

Fistum disclosed that the Ethiopian government has compensated some 200 investment projects who were affected by the political unrest. He said in the past one and half year 500 million birr has been allocated and the EIC has been working with the Development Bank of Ethiopia and the Commercial Bank of Ethiopia in compensating the companies whose properties were damaged by riots.            

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