Ethiopia seems well positioned to continue to grow and garner foreign investment, according to Seeking Alpha.com.
Ethiopia averaged 10.7 % economic growth rate over the last 10 years, more than double the annual average of countries in Sub-Saharan Africa which was 5.2%.
Tangentially, Ethiopia’s growth has not been tied to the development of mineral resources like oil and gas but it depends on infrastructure developments.
The Ethiopian government has put a great emphasis on infrastructure INVESTING in road and dam projects in order to provide reliable transport of goods, and also to provide cheap power to its inhabitants.
Its single focus (infrastructure) has led the nation to be one of the fastest growing in Africa and a future hot spot for investment, Seeking Alpha.com noted.
Over the last several years, Ethiopia has seen the likes of Hennes and Mauritz source supplies from Ethiopia, consumer goods maker Unilever is in the process of building a factory, and both Diageo and Heineken have bought breweries.
The recently purchased Heineken brewery in the outskirts of Addis Ababa is part of a 310 million euro investment in the country since 2011. Heineken’s brewery complements the already existing breweries in Ethiopia.
Other more speculative investment opportunities involve capitalizing on recent increase in exports of mineral resources.
Ethiopia’s tremendous growth has not been the result of a great discovery of natural resources, but due to an emphasis on infrastructure and government expenditure that is transforming Ethiopia’s economy from agriculture based to manufacturing intensive. Another step in diversifying the Ethiopian economy and further increasing growth prospects is the growing exports of mineral resources.
The mining sector in Ethiopia has grown significantly with government estimates stating there are roughly 1 million employed miners in the country, making it an important source of foreign currency. According to the World Bank, “In 2012, mining was responsible more than 19% of the total value of exports, and up to 10% of foreign exchange earnings. Gold makes close to 100% of mining exports and most of it, about 2/3, comes from artisanal mining.”
[WaltaInformationCenter]