ETHIOPIA THE NEW HORIZON OF HOPE General Background

ETHIOPIA: THE NEW HORIZON OF HOPE

General Background Population Total: 105 m (est. 2018) FDI inflow: $3. 6 bn (2017) FDI growth: 46% (2016) Health spend: $2. 7 bn Health spend/capita: $27 Health spend/GDP: 5% Availability of EDMs*: ~70% 49% o total population Source: World Bank, IMF, WHO Rapid economic growth • One of the fastest growing economies in the world • 10% average growth over the past 14 years Favourable destination for FDI • One of the top destinations foreign direct investment (FDI) Young and productive population • Second most populous country in Africa and growing at 2. 3 million annually. • 60% of the population are young age group Clear vision for development • Vision 2025: Become leading manufacturing hub in Africa 2

Ethiopian Investment Commission is the lead government agency responsible for investment promotion and provision of aftercare services Targeted investment promotion Streamlined One Stop Service Including licensing, Visa, TIN, and other services Approves Incentives Post establishment aftercare Support Smart and proactive investment support by initiating policy and implementation measures necessary for a conducive and competitive investment climate in collaboration with relevant stakeholders. 3

Four fold increase in FDI flow over the last 5 years (from a little over 1 billion USD to more than 4. 2 billion USD) Total FDI inflow & share of manufacturing FDI 2006/07 - 2016/17 (in USD million) 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2007/08 2008/09 2009/10 2010/11 2011/12 Total FDI 2012/13 2013/14 2014/15 2015/16 2016/17 Manufacturing FDI Source: Ethiopian Investment Commission: National Bank of Ethiopia, USAID - Ethiopia Performance Monitoring and Evaluation Service (EPMES) 2017 4

Ethiopia has undergone significant changes over the last year; opening up of the economy is currently underway • Enhance private sector participation in telecom, air transport, logistic, power transmission etc. , • National flagship doing business reform initiative launched • Investment legal regime reform to further open up economy • Regional trade integration

Country has also taken leadership in building a positive political landscape in the region

Ethiopia has set the Vision to become the leading manufacturing hub of Africa by 2025 Ethiopia KEY GOVERNMENT STRATEGIES TO ATTAIN VISION 2025 1 Targeted investment in priority areas 2 Development of world-class industrial parks fitted with sustainable infrastructure 3 Tailored incentives 4 Conducive enabling environment DEEP DIVE FOLLOWS

Targeted investment in priority areas Strategic priority areas have been identified for FDI attraction and export promotion Pharmaceuticals Agro-processing Textile & Apparel Energy Leather ICT Horticulture Tourism 8

Several plug-and-play Industrial Parks are being developed throughout the country Industrial Parks: Catalyst to drive Ethiopia’s industrialization agenda

Several industrial Parks are being developed through out the country 4 22 Total planned Industrial Parks 12 Government owned IPs operational Bole Lemi I, Hawassa I, Mekelle and Kombolcha Bahir Dar 2 Private IPs fully operational Eastern and Hujian Industry Parks Government Industrial Parks Jimma 16 10 IPs (State and private) under construction Private Industrial Parks Construction not started Under construction Operational

Sustainability is integral to the parks Africa’s 1 st park with zero liquid discharge facility (ZLD)

Development of world-class industrial parks fitted with sustainable infrastructure Massive investment has been made in infrastructure development in support of industry (1/3) Electric-powered Railway to ease logistics Africa’s 1 st electric-powered railway

Development of world-class industrial parks fitted with sustainable infrastructure Massive investment has been made in infrastructure development in support of industry (2/3) Ethiopian Airlines – Cargo hub Largest cargo network and terminal in Africa

Development of world-class industrial parks fitted with sustainable infrastructure Massive investment has been infrastructure development in support of industry (3/3) cost-competitive, renewable and clean energy Green electricity generation supports industrialization

Tailored and competitive incentives are provided to foreign investors FISCAL ü Income Tax exemptions ü Custom tax exemptions ü Loss carry forward ü Full export duty exemption NON FISCAL OTHER ü Guarantee against expropriation ü Guarantee for repatriation of funds ü Customs facilitation through bonded export factory and similar other schemes ü Relaxed Industrial park land regime ü One-Stop Shop Service ü Expedited procedure for securing visa, work permit and certificate of residency ü Facilitation of market linkages

Market access advantage: Duty-free market access to USA & EU & preferential duty treatment

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