ADDIS ABABA – The flow of Foreign Direct Investment (FDI) to Ethiopia drop by 600mln USD in the 2019/20 fiscal year compared with the preceding year, according to Ethiopian Investment Commission (EIC).
The country received 2.5 billion US dollars worth of investment in the fiscal year that ended on July 7.
The amount, however, has dropped by 600 million US dollars compared to the 2018/19 FY, EIC officials said in a consultative meeting held involving regional investment bureau commissioners on Thursday.
The amount is the lowest the country received over the past five years. Officials of the commission have mentioned several reasons for the decline.
EIC planning director, Neway Tedila, mentioned a range of reasons including absence of coordination among stakeholders in investment, shortage of foreign exchange, and electric power shortage as well as the impact of coronavirus pandemic for the drop in FDI.
But investment officials pinpointed security-related challenges as a major reason after investments become targets during the recent unrest in the country.
Impact on Job Creation
The drop in FDI inflow had a negative impact on the number of employment opportunities created with officials reporting only 40,000 in the just-ended fiscal year.
In the 2018/19 alone, over 115,000 new employment opportunities had been created by investors.
Thursday’s meeting was aimed at curbing the drop in job creation in particular and the amount of FDI in general this year.
The country targets to attract 5 billion US dollars and create job opportunities for 118,000 Ethiopians at the end of the current fiscal year, .
IPs Positive Production
EIC Officials, however, reported encouraging results from the performance of active firms in the industrial parks across the nation.
They exported commodities worth 164 million US dollars last year, according to the Investment Commission. The amount showed a 24 million US dollar increase when compared to the previous fiscal year, according to EIC.
Ethiopia has 10 government built and 6 privately built industrial parks that are operational albeit at a different level of performance.
This year, the IPs are expected to generate at least 340 million US dollars.
By Sisay Sahlu