It’s Ethiopia’s Time

Zemedeneh NegatuZemedeneh Negatu is the Managing Partner of Ernst & Young in Ethiopia and Head of Transaction Advisory Services.

He has a wide variety of clientèle including prominent investors from Africa and the Middle East. Here in Ethiopia, he was instrumental behind the acquisition of Meta Brewery by Diageo and Ethiopian Airlines’ development roadmap Vision 2010. He has extensive global experience advising clients in financial services, manufacturing, telecoms and airlines. Asrat Seyoum and Bruh Yihunbelay of The Reporter sat down with Zemedeneh for an interview at his office on Mega Building located off Bole Road and discussed about Foreign Direct Investment (FDI) to Ethiopia, inter-African trade, commercial farming and other pertinent issues. Excerpts:

The Reporter: What is your assessment of the FDI coming to Ethiopia in the past four years?
Zemedeneh Negatu: In general the trend in the past two or three years has been encouraging.  For example last year Ethiopia attracted one billion dollar in FDI which is the highest ever in the history of the country. On the one hand, you can say this is a very good achievement but another way of looking at is to note that Ethiopia has the fourth largest GDP in sub-Saharan Africa and therefore it has to increase the volume of FDI. The second observation I have is the fact that FDI has started to go into diversified sectors including manufacturing. Our analysis indicates that investors are starting to invest in those sectors where Ethiopia has competitive and comparative advantages.  One other important trend to note is that the sources countries for FDI are becoming diversified. Until recently Ethiopia was highly dependent on FDI from the newly emerging economies such as China, Turkey and India. However, we are now seeing more investments and expression of interest from Western developed economies. For example in 2012 the two largest FDI were from the UK and the Netherlands represented by Diageo and Heineken. In my opinion these investments represented the tipping points in terms of really grabbing global investors’ attention. For instance, since 2012, almost every day we see potential new investors in our offices inquiring about the opportunities in Ethiopia. But Ethiopia needs to stay focused and make sure that it stays attractive to global investors because competition for FDI is fierce around the world. Every country from China to the US is working hard to lure international investors to their countries.

Read more at: The Reporter