Despite being one of the top Foreign Direct Investment (FDIs) destinations in Africa, a senior Japanese scholar, who advices the Government of Ethiopia (GoE) on industrial policy matters, criticized authorities for the recent internet shutdown and the potential impact it might have on FDI flow to the country.
During an interview with The Reporter, Professor Kenichi Ohno, a veteran economist and long-time advisor to Ethiopian authorities on industrial policy formulation, said that the recent measure taken by the Ethiopian government to shut down the internet to secure national exams have resulted in running down on the confidence of investors and the diplomatic corps across the country.
During his recent visit to the country to participate in a high-level regular meeting dubbed “industrial policy dialogue”, Professor Ohno pointed out that such fly-by-night kind of interventions of the authorities have reached to a point where many investors are finding it highly unacceptable.
According to the professor, the political and social upheavals experienced in the country in the past two consecutive years have resulted in unprecedented outcomes to investors’ confidence. In addition to that, while the political situation looks to be subsiding, the Professor said, the recent internet blockage will have an adverse impact on confidence of some of FDI companies in Ethiopia.
It is to be recalled that, the public discontent that broke out in the Oromia and the Amhara regional states have left more than 400 dead bodies behind and countless other have sustained injuries. The discontents have also resulted in vandalisms and touching down of private properties where local and foreign businesses were the prime victims. However, Professor Ohno valued government’s willingness to compensate the investors who have lost their properties during the protest.
That being said, serious lack of consistency in the laws and regulations of the country is also another problematic area that Professor Ohno pointed out. Doing so, according to Professor Ohno, would accord a bad reputation on the government; and their confidence in the system.
The high-level industrial policy dialogue has been held in Addis Ababa with frequent consultations and discussions with the Prime Minister starting from the days of the late Meles Zenawi and now with Prime Minister Hailemariam Dessalegn.
Despite the criticisms leveled against it, recently, Ethiopia was named among the top five Least Developing Countries (LDCs) in attracting FDI by United Nations Conference on Trade and Development (UNCTAD). The country was able to attract USD 3.2 billion in FDI last year alone. Next to Angola, which leads the LDC-pack with USD 14.4 billion, Ethiopia stood second ahead of Mozambique with USD 3.1 billion, Bangladesh with USD 2.3 billion and Myanmar with USD 2.2 billion. In addition to that, while the others experienced a sharp decline from their previous year’s performances, Ethiopia was able to witness a 46 percent increase.
According to the UNCTAD report, Moroccan fertilizer firm, Office Cherifien des Phosphates (OCP) and the Japan Tobacco Inc. (JT) have been branded as major contributors to the Ethiopia’s high valued FDI performance last year. Following the protests, the FID figures were somewhere around USD 1.2 billion. OCP has inked to install USD 3.7 billion fertilizer manufacturing plant and JT to acquire a 40 percent stake of the National Tobacco Enterprise SC with a USD 510 million value.