Addis Ababa, January 9, 2017 (FBC) - Developing economy can inspire a lot of creativity and new ideas with its cheap labor offers. Being one of the strongest economies in the continent with so much untapped business areas; Ethiopia has registered yet another biggest milestone attracting big names to its investment sectors.
From Huajian Group, textile factories, Aliko Dangote, to AU Grand Hotel, Pullmann, Crowne Plaza, Wyndham Hotel Group, Jumia Travel, Crowne Plaza, Accor Group and Best Western and flower companies, Ethiopia welcomed major investors from Africa and beyond.
H&M and Tesco are also sourcing wears from the country, while PVH Corp owners of Calvin Klein brand are expected to source its textile production from Ethiopian within five years.
The country continues to register encouraging economic growth allowing the country to place itself as one of the countries with much untapped investment potential. In a research done with 124 countries over four decades, Ethiopia ranked among the fastest 20% in terms of infrastructure growth, says the World Bank.
On the other hand, Ethiopia remained to be one of the fastest growing economies in the world. Ethiopia has maintained an average growth rate of 10.9 per cent since 2004. The World Bank and the International Monetary Fund forecast also shows that the average growth will continue to grow at a close rate of 8% over the next five years boosting investors’ confidence in the country.
The growth was largely driven by state led development policies with rapid expansion of infrastructures and services. Increasing exports of primary goods and foreign direct investment (FDI) have also promoted its acclaimed growth leading the country into its ambitious plan to achieve middle-class income status by 2025.
These developments are remarkable indicators for future private sector development including more local and international investors to the business arena. The country has been intensively working to grow its manufacturing and export sectors lobbying for tax holidays and incentives to encourage investors.
The future is predicted to be so much brighter for Ethiopian economy. The Business Monitor International (BMI), projects further growth driven by the countries continued large-scale investment under the second phase of its Growth and Transformation Plan (GTP II).
BMI research reveals that manufacturing and agricultural sectors will be the main contributors to real GDP growth between 2016 and 2020 due to the government’s investment in the country’s infrastructural backbone by improving logistics networks.
Ethiopia’s investment into the fixed capital formation and construction industry will grow by 14% per year over 2016 and 2017. This will attract Foreign Direct Investments (FDIs) in the country to ensure sustained economic growth says BMI.
With the Ethiopian economy projected to progress with double digit growth more investments are expected to enter into business. Although investment is still primarily driven by domestic investors more international companies are eyeing Ethiopia enticed by incentives and absence of competition. The country created enduring access to local and international investors in an initiative to close the gap and the deficit on its export and manufacturing industries.