Economic investments in any country across the world are vulnerable to positive and negative incidents in the social and political patterns of a nation.
Ethiopia, a landlocked country in the Horn of Africa with a population of about 96 million people, is no exception. The country has one of the fastest growing economies in Africa with an average 10.3 percent growth rate in the recent years.
Despite this high growth, the World Bank ranks Ethiopia 104th out of 183 countries on its Ease of Doing Business Index due to regulatory hurdles, legal threats to property, and the time and money spent on registering a business, ensuring right of title to property, and acquiring licenses.
Below are some of the things any potential investor should know before investing in Ethiopia:
- Politics It is a federal republic with eight regional states and two administrative cities — Addis Ababa and Dire Dawa. It has a two-house parliament — Lower and Upper House. The government likes to say it has a multi-party democracy, but it’s really a single party state. The ruling party is Ethiopian People’s Revolutionary Democratic Front. There are protests that the government uses intimidation to stay in power.
- Economic growth It is one of the fastest growing economies in the world. Its average growth rate is about 10.3 percent. The government has undertaken reforms that have opened up the nation to investors. This has expanded the agricultural and manufacturing industries. Unemployment rate is about 17 percent.
- Infrastructure The country opened up its first light railway in September 2015. This is one of the solutions to the road transport problems experienced in Addis Ababa. Construction of a road that connects the Port of Mombasa in Kenya to Addis Ababa is set to be completed by the end of 2016. This will reduce the shipping and transports costs between Kenya and Ethiopia. It will also increase the volume of Ethiopian goods that are transported through the Port of Mombasa. The country is also constructing several hydro-electric power projects including the Grand Renaissance Dam on River Nile.
- Human Rights The nation’s track record in human rights is questionable. General elections were held in May, 2015. They were marred by extrajudicial killings of four members of Semayawi Party, the main opposition party. The four were considered hard-line critics of the government. Security agencies arbitrarily arrested journalists in run-up to the elections.Nine bloggers were detained for 500 days on accusations of using digital media to promote terrorism.Since November 2015, there have been clashes in the Oromia region of Addis Ababa, the capital city. This has led to the death of over 200 people. The protests were sparked by the government’s plan to expand the administrative boundaries of Addis Ababa.
- Terrorism The threat of terrorism, posed by Somalia’s Al Shaba is high. The nation has taken counter-terrorism steps that have protected it from this threat. It has adopted the Ethiopian Doctrine which aims to liberate local communities, organize them to fight against terrorists. The country’s military operations are built around a solid political foundation and community development. It has mobile military posts within its communities.