Below is a summary of the top industries with the greatest prospects, big government buys, infrastructure projects and commercial opportunities, as suggested below by the US International Trade Administration.
The top American exports to Ethiopia are agricultural equipment, computer equipment and food goods. Ethiopia’s infrastructure, energy, aviation, healthcare, and tourism sectors, as well as agriculture and geoprocessing, present the most attractive business potential.
Government procurement
The Government of Ethiopia (GOE), and its public institutions are the largest consumers and markets for American products. The GOE makes significant investments into significant social and economical infrastructure projects, including power generation, industrial park and zones, housing development and water and irrigation, roads & railways, airports & dry ports, telecommunications networks and internet networks, assimilation of fertilizer manufacturing facilities.
American businesses have the opportunity to participate in government procurements. American businesses rely heavily upon high-level advocacy support to secure government contracts and reverse unfair or opaque tender awards due to flaws during the tendering process.
The GOE welcomes suggestions for tender bids which include financing alternatives. Bidders who do not offer 100% financing are normally at a competitive disadvantage. Additionally, there have been reports of unfairness and lack openness in the evaluations of tenders. Bidders should consider collaborating and using the U.S. Commerce Department advocacy procedures before the tender evaluation process.
By confirming three of its board of directors, the U.S. Senate restored the U.S. Exim bank’s full financing capacity in 2019. With increasing capacity, the Overseas Private Investment Corporation’s successor organization, the U.S. International Development Finance Corporation (DFC), has demonstrated a greater interest in funding projects in Ethiopia with U.S. equity investment.
Agriculture
Ethiopia has a wealth of agricultural resources. There are also many natural areas where you can grow agriculture. Land can be leased from regional and municipal administration bureaus for up 99 years. Investment licenses can also be obtained from Ethiopian Investment Commission.
The GOE has faced significant challenges in recent years when it comes to transparency and equity. This includes land distribution, compensation and relocation. The respect for land rights also differs within Ethiopia due to the country’s strong regional autonomy. American businesses must do their due diligence before making investments that will require land use and/or migration.
One of the most important industries for Ethiopia’s economic development and progress is energy. We anticipate a large increase in power generation in the medium-term. Ethiopia has a lot of potential for renewable energy, particularly hydroelectric (renewable sources now provide over 90% of Ethiopia’s energy needs), and it wants to take advantage of these resources by expanding the installed capacity of renewable energy sources.
Aviation
The GOE publishes tenders on a variety renewable energy projects. Project quality and experience are the main criteria for tender evaluation.
The rising demand for freight and passenger air travel is driving rapid expansion in the aviation industry. This is due to an average growth rate 20%. The industry has continued to expand despite the COVID pandemic thanks to the growth of cargo transport operations.
FY/2022 is expected to be better for the sector because operational capacity could regain 80% to 100% its pre-crisis capacity rather than 70% of its prior-pandemic capability.
Free trade area in continental Europe
The 55 African countries that have signed the Africa Continental Free Trade Agreement, (AfCFTA) which entered into effect January 2021, now form a single trading area. The AfCFTA has been approved by Ethiopia, which will increase trade between Ethiopian and other African countries. U.S. businesses can now use Ethiopia as an AfCFTA-approved regional trade hub to gain access to adjacent countries.
As part of its long-term strategy Agenda 20,63, the AU is mandated by the UN to pursue continental integration as one their key priorities. To achieve this goal, the AU created the African Continental Free Trade Area (AfCFTA) in January 2021. The AfCFTA aspires to integrate Africa’s economies, unify rules, and lower trade obstacles like tariffs.
The AfCFTA had already been ratified and signed by 43 nations by the middle 2021. 54 AU members had also signed it by that time. The AfCFTA’s chapters will have a significant impact on trade and investment in key areas such as products and services, intellectual rights, investment, competition policies, and digital commerce for U.S. companies doing business in Africa.
According to the U.S. Mission To the AU (USAU), the US Mission to the AU (USAU), supports AfCFTA by providing technical support to the AU and encouraging U.S. participation in the AU’s AfCFTA. the US International Trade Administration’s Country Commercial Guide
Source: newbusinessethiopia
