Strategic Sectors of investment

Ethiopia offers priority areas of investment sectors with attractive investment incentives; textile and apparel, leather and leather products, agro processing, and pharmaceuticals and horticulture among others:

Textile and apparel

Ethiopia’s textile and garment industry witnessing rapid growth, the sector is given prominent position in boosting export, creating job opportunities, and as a model to other sectors as well. Ginning, integrated textile mills, spinning, weaving and/or knitting, dyeing and printing, Production of garments; the manufacturing of knitted and crocheted fabrics, carpets, and sportswear, among others

 Leather and Leather Products

The sector is one of the leading manufacturing sectors for Ethiopia. Currently, Ethiopia is exporting mainly finished leather followed by growing shoe exports. Other leather items including gloves, bags and small leather articles have a large potential for exponential growth Moreover, Ethiopia has a cattle population of more than 53 million, and sheep and goat population of 25.5 and 24.1 million, respectively. This makes Ethiopia the 1st from Africa and the 9th from the world in its cattle population which enable the country to have a strong raw material base for the leather industry. Only 50% of hides and skins potential are being utilized currently. Ethiopia has a potential for price competitive and quality supply of skins and hides: The Ethiopia highland sheepskins have got a worldwide reputation in terms of quality, thickness, flexibility, strength, compact structure, and a clean inner surface.

Horticulture

The Ethiopian horticulture is correcting booming in the country. Total land area available for horticulture is about 12,552 hectares, with only 11% of this land being developed for horticulture. Ethiopia has diverse agro-climatic zones, long growing seasons, and availability of water for irrigation, including 122 billion cubic meters of surface water and 2.6 billion cubic meters of groundwater. Horticulture is the fifth foreign revenue earner for Ethiopia, generating US$245 million in 2013/2014 compared to US$28.5 million in 2004/2005.The industry creates over 180 thousand jobs, out of which 85% are for women – a section of the population that has been historically under-employed. 

 Pharmaceuticals

Ethiopia’s pharmaceutical industry provides ample potential for investment. Ethiopia has the second- largest population in Africa (>105 million, ~8.5 % of Africa population), with an expected growth rate of 2.3% per year

Why pharmaceuticals?

  • Growing local market: Ethiopia’s pharmaceutical market is expected to grow by 15% annually and reach $ 1 billion by 2020
  • Accessible local and regional market: Ethiopia has the potential to serve as an export hub for the > $ 20 billion pharmaceutical markets in Africa
  • Trainable workforce with competitive wages
  • More than 10 schools of pharmacy in Ethiopia are planning to expand with sector specialization programs
  • Availability of tailored investment incentive schemes towards the pharmaceutical sector and industrial park development
  • A big demand and supply gap for pharmaceutical products, with only a few local manufacturers covering < 20% of the demand

Agro-Processing

Ethiopia's plentiful agricultural resources including cattle, forests, cropland, suitable climate condition, and labor force are critical inputs for agro-processing industries. Ethiopia produces the best Arabica coffee in the world and is known for having a wider genetic variety of coffee than any other coffee producing country. Ethiopian coffee is well known for its special aroma and flavor, a uniqueness that makes it preferable for blending with coffee from other countries. Currently, Ethiopia is among the top five coffee exporters in the world. Ethiopia produces a variety of different sesame seeds which are highly valued on the international market. Production of sesame in the country has doubled in the past five years.

Ethiopia ranks first in Africa and tenth in the world by cattle population of 55 million which is a big opportunity for meat processing industry. Ethiopia already has well-established partners in the meat trade, including Cote d’Ivoire, Congo Brazzaville, Dubai, Egypt, Saudi Arabia and Yemen. The size of the livestock population, the natural endowment of favorable climatic condition for improved, high-yielding animal breeds, provides Ethiopia with significant potential to further develop its dairy sector. Demand for chicken products is growing quickly in Ethiopia.

The Government recently set new targets to bring meat production to 164 tones and egg production to 3.9 billion eggs by 2020 through improved poultry breeds. Ethiopia is the tenth largest honey producing country in the world and the largest in Africa. It ranks fourth in the world in terms of bee wax production and export. Yields of tomato can reach up to 80 tons per hectare which assures consistent and abundant supply for tomato processing plant.

Related Articles