Chinese Investment in Ethiopia: Contribution, Challenges, Opportunities and Policy Recommendations

Chinese Investment in Ethiopia: Contribution, Challenges, Opportunities and Policy Recommendations
File Size:
1.94 MB
Author:
Berihu Assefa, Mulu Gebreeyesus and Alebel Bayrau
Date:
01 January 2020
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152 x

For much of the last decade or so Ethiopia has been a leading investment destination for China. Although foreign direct investment (FDI) to Ethiopia has been hampered by unrest in recent years, it remains on an upwards trajectory. FDI inflow from China to Ethiopia has increased substantially over the past decade, with more than 70% of it going into the manufacturing sector. The number of Chinese FDI projects in Ethiopia has increased from just 87 in 2005 to 1151 in 2017. However, by looking at the number of FDI projects and FDI levels (in percent of GDP) currently observed in Ethiopia, and specifically in comparison to successful FDI-led industrialized East Asian countries, it is clear that there is an opportunity to improve the promotion of incoming foreign investment from China and other countries. Maximizing the opportunities and alleviating the investment constraints will unleash Ethiopia’s potential to attract Chinese businesses for sustained industrialization.

 
 
 
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