Ethiopia Opens Up For Investment

By Mzwandile Jacks
Nov. 27, 2012

VENTURES AFRICA – Ethiopian Prime Minister Hailemariam Desalegn, has shown earliest signs that he wants to put an end to Addis Ababa’s aloofness and invite foreign companies to invest in the country.

Desalegn – on his fourth foreign visit since taking over power in September after the death of his predecessor Meles Zenawi, signed a deal lifting domestic restrictions on investors from Kenya.

After hampering attempts to open up to duty-free goods from across the Eastern and Southern Africa region, Kenya, Ethiopia’s Southern neighbour, is on course to become the next big beneficiary of Addis Ababa’s policy of opening up to foreign businesses.

Analysis Africa (AA), a Nairobi-based research body, reports that the signing of a Special Status Agreement with Kenya’s President Mwai Kibaki, to allow Kenyan firms to invest in the manufacturing sector in Ethiopia, is a sign of a rapid change in Addis Ababa’s stance towards its neighbour.

Desalegn flew into Kampala, Uganda, on his second visit since becoming prime minister. He also attended a Summit of the Common Market for Eastern and Southern Africa (COMESA).

It is understood that under the late Zenawi, Ethiopia, had only had a policy of trade “rapproachmnent” with Khartoum, Sudan from where it gets most of its oil.

Ethiopia has been negotiating its entry into the World Trade Organisation (WTO). But the country was unwilling to open up telecommunication and banking.

However, this has changed after South Sudan’s secession referendum last year.

Kenyan diplomats have been negotiating with Addis Ababa to sign a bilateral deal to ease trade restrictions and join the regional economic bloc, the East African Community (EAC) but Addis Ababa has been keen on keeping its closed borders.

Analysis Africa claims that Burundian Defence Minister at one time hinted of Ethiopia’s intention to join the EAC, saying an application to the same effect had been lodged through Burundi in 2010.

Upon his swearing in at a ceremony without military parade, the new Ethiopian leader took off to Somalia to witness the swearing in of the Horn of African country’s new leader Mohamud Hassan, before traveling to New York for the General Assembly, his first as Prime Minister.

It is believed he then travelled to Kampala, Uganda, to join other heads of state in celebrations to mark Uganda’s 50th independence anniversary before returning home to a meeting with South Sudan’s foreign Minister Nhial Deng Nhial, to discuss possible investments on a refinery project between Ethiopia and South Sudan.

About the Author
Mzwandile Jacks has been a financial journalist for more than 20 years. He has worked full time for the Sowetan, The Lowvelder, Mpumalanga News, Business Day, Primedia Publishing, Finance Week, This Day, Financial Mail and Business Report. His articles have also been published in The New Age, City Press, Fin 24 and many other niche magazines in the stable of Capemedia and Highbury Safika Media, both independent magazine publishers. He has covered Africa extensively while working for the above-mentioned publications. He studied journalism at the Peninsula Technikon in the Western Cape and Politics and English at the University of the Western Cape (UWC). He cites South Africa’s pioneering journalists like Aggrey Klaaste, Joe Thloloe, Mathatha Tsedu, Monk Nkomo and Len Maseko as his mentors. He was voted the best black financial journalist at Finance Week in 2002. Rikus Delport, the editor of Finance Week at the time, described him as “a top notch journalist of that time.”