Wooing FDI through Ethiopia Investment Holdings

Ethiopia has witnessed a significant improvement in its macroeconomic indicators in the past financial year, as highlighted by the country's Prime Minister, Abiy Ahmed. With the establishment of Ethiopia Investment Holdings (EIH) last year, the government aims to enhance the value of state-owned assets through professional management, paving the way for economic growth and development. In a recent interview with CNBC Africa, Bilen Mammo, the Deputy CEO of EIH, shed light on the achievements and future plans of the investment holdings. EIH plays a crucial role in mobilizing financing for development and strengthening investment opportunities in key sectors of the Ethiopian economy. The homegrown economic reform initiated in Ethiopia in 2019 targeted structural and sectoral imbalances to stimulate job creation and inclusive growth, aligning with the country's 10-year perspective plan. This reform agenda positions Ethiopia on a trajectory towards prosperity and sustainable growth, provided that challenges such as limited access to financing are effectively addressed. EIH serves as the strategic investment arm of Ethiopia, focusing on bolstering investment mobilization and enhancing the commercial management of national assets through partnerships with the private sector. One of the key achievements of EIH is the onboarding of 27 companies and portfolios across eight priority sectors, including agriculture, manufacturing, mining, ICT, and tourism. These companies, with a total annual revenue of approximately 300 billion birr, have showcased significant returns and play a critical role in driving economic growth. By leveraging corporate governance and professional management, EIH aims to transform these entities into international icons, contributing to Ethiopia's global economic footprint. Mammo emphasized the importance of investment mobilization in fostering long-term wealth creation and integration into the global economy. Through the establishment of flexible and credible investment structures, including sub-funds and joint ventures, EIH seeks to attract international investors and enhance financing opportunities in key sectors. Additionally, the investment holdings prioritize job creation, improving the quality of jobs, increasing state revenue, boosting exports, and enhancing company networks to drive economic progress. With a strategic focus on attracting Foreign Direct Investment (FDI), EIH is guided by an investment policy that aligns with Ethiopia's investment needs and priorities. By targeting specific projects and investors, EIH aims to secure commitments for FDI, create employment opportunities, increase real income, and elevate the performance of state-owned enterprises. While specific targets for FDI volumes have not been disclosed, Mammo stressed the commitment to ambitious goals that will positively impact the country's economic landscape. Looking ahead, EIH plans to unveil innovative strategies and announcements to attract FDIs and promote business reforms that bolster the investment climate in Ethiopia. Collaborating with various ministries and agencies, EIH envisions a future where Ethiopia's manufacturing capabilities are globally competitive, environmentally sustainable, and conducive to enhancing the living standards of its people. The investment holdings remain optimistic about the opportunities presented by Ethiopia's economic landscape and are poised to drive sustainable economic growth through strategic investments and partnerships.