Ethiopia's Finance Minister Ahmed Shide
BusinessNews

Ethiopia eyes more Chinese Investment

A high-level government delegation, led by Finance Minister Ahmed Shide, visited Beijing this week in an effort to boost economic and trade relations between Ethiopia and China.

The visit came a month after Chinese foreign minister Qin Gang met with Prime Minister Abiy Ahmed during his trip to Addis Ababa.

The “extensive discussions” between the two ended with a consensus for the Ethiopian government delegation to be sent to Beijing with a view of enhancing economic relations, Ahmed told Chinese TV CGTN on Wednesday.

In the interview, the Finance Minister further spoke about the Belt and Road Initiative, investment in Ethiopia, China-Africa Cooperation, and the Global Development Initiative. Below are the excerpts.

On Strategic Partnership

Authorities say the two countries currently enjoy comprehensive strategic cooperative partnerships.

The finance minister said the cooperation “elevated to a strategic comprehensive level several years ago by the decision of our two leaders.”

“Since then, Ethiopia and China have been implementing significant and extensive projects together. One of the most important examples is the Addis Ababa- Djibouti railway.”

“This railway covers long distances between Addis Ababa and Djibouti and it is making our import and export corridor competitive.”

Ahmed said the 756-km railway, which links Ethiopia with Djibouti’s ports, “is one of the early harvests of China’s belt and road initiative or BRI,” describing it as “a classical example of a regional infrastructure development project”.

“It’s also one of the best examples of Africa-China cooperation which is a win-win and mutually beneficial project,” he added.

On BRI’s contribution to infrastructure dev’t

In all, Ahmed said, the projects carried out under the Belt and Road Initiative have all proven to be very beneficial.

“First, they are creating significant infrastructure assets for the country in transport, energy, urban development, water supply schemes, manufacturing like sugar, and industrial park development.

“All of them are contributing to the growth and development of Ethiopia.. and enhancing the manufacturing capacity of the country.

“They are also making the country comparative to attract investors from all over the world and therefore they are very beneficial.

“Ethiopia is looking forward to advancing, deepening, and sustaining strategic cooperation with China.”

On China’s timely zero tariff decision

The minister embarked on a working visit to Beijing days after China decided to grant zero tariff treatment for 98% of goods originating from Ethiopia, beginning March 1, 2023.

Further, Ahmed said that decision will have a significant impact on advancing the Ethiopia-China cooperation as well as the economic development of the East African nation.

The minister appreciated “China and its president Xi Jinping for offering the zero tariff treatment for taxable export items from Ethiopia and other African countries.”

“It’s a very timely and proper decision to advance our cooperation.

“This will also facilitate Ethiopia’s export to China which is very very important. Local companies and international firms in Ethiopia will benefit from this. As a result, the production capacity of Ethiopia will be enhanced.”

He said, “the decision will support the growth and development” of the Ethiopian economy amid several challenges coming from price increases in the international market due to the fallout of the Covid pandemic and the war in Ukraine as well as the climate change-induced drought.

“The solidarity that China has shown during this period is very useful. We’re thankful,” the finance minister added.

The list of products granted zero-tariff treatment involves 8,804 items, as per Chinese diplomats who expressed their commitment to encourage Chinese enterprises to increase imports of competitive products from Ethiopia.

Ethiopia Seeks more Chinese Investments

Chinese businesses are also one the top investors in Ethiopia, engaging in diverse sectors, including industrial parks, processing, manufacturing, and construction.

“We would like to consolidate those investments,… attract many more investments from China,” Finance Minister Ahmed stated.

“We have a significant natural resource base,” he said. “With a population of 120 million, the fastest growing economy as well as ongoing and deepening economic reform, Ethiopia offers a comprehensive investment opportunity for international investors.”

The minister further explained ongoing efforts to make his country attractive to foreign investors.

“In the past,” he said, “we have invested a lot in infrastructure development and in human capacity development.”

And now, he said, the country is transforming its institutions to facilitate investment and ease of doing business.

“The commitment of the leadership, the young population, competitive energy prices, competitive land-related facilitation are all suitable to attract much more investment from abroad.”

“We are also opening up and reforming our economy to attract more private investment to Ethiopia,” the Minister said.