Ethiopian Steel CEO: Ethiopia open for business

Ethiopia is setting the stage for increased investment opportunities as it embraces liberalization and reforms in key sectors such as banking, telecommunications, and manufacturing. In a recent interview with CNBC Africa, Bhavesh Chandaria, CEO of Ethiopian Steel, shared insights on the current economic landscape and the outlook for investors in the East African region. Chandaria highlighted the ongoing reform initiatives in Ethiopia, emphasizing the country's focus on catalyzing homegrown reforms to attract more business activities and foreign investment. One of the significant developments in Ethiopia is the liberalization of foreign ownership of property, a move that is expected to boost capital inflow and stimulate economic growth. While acknowledging the challenges associated with logistics due to Ethiopia being a landlocked country, Chandaria expressed optimism about the potential of public-private partnership projects in areas such as power and infrastructure to address these hurdles. He noted that the Addis Ababa city is undergoing a makeover, which is poised to generate construction activity and drive economic growth. Additionally, Chandaria highlighted the upcoming establishment of a capital market in Ethiopia, which will provide Ethiopians with more avenues for investment beyond real estate. The CEO underscored Ethiopia's role as a beacon of stability in the region and outlined the key sectors that are driving economic growth and demand in the country. He pointed out that Ethiopia's early investment in infrastructure has positioned it ahead of many emerging economies, with projects such as rail links, monorails, and expressways already in place. The demand for construction and steel products is being fueled by massive infrastructure projects, urbanization initiatives, and the growth of the power sector. Chandaria emphasized the importance of value-added building solutions and intra-regional business collaborations in driving growth within the steel sector. Discussing the manufacturing landscape in Ethiopia, Chandaria highlighted the need for capacity utilization in the short term, as many investments are currently operating below capacity levels. He emphasized the importance of regional and Pan-African trade through initiatives like the Africa Continental Free Trade Area to drive economic growth and trade integration. While expressing impatience for faster progress in regional trade, Chandaria noted positive developments in thought leadership and government support for regional trade initiatives. However, he acknowledged the need for a balance between the pace of implementation and the urgency to promote regional trade. In light of global dynamics such as the Middle East crisis and the Russia-Ukraine war, Chandaria discussed the impact on steel prices and commodity costs in the construction industry. He highlighted the challenges related to increased cycle times for raw material importation, which have led to concerns about rising commodity prices and project delays. Chandaria expressed hope for stability in trade flows and called for measures to streamline global trade to mitigate the impact on the construction industry in countries like Rwanda, Ethiopia, and Uganda. Overall, Chandaria's insights shed light on Ethiopia's economic growth trajectory, the importance of reforms and infrastructure development, and the potential for increased investment opportunities in the region.