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Ethiopia’s Growing Economic Diplomacy

By Samuel Taye

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Ethiopia has clear and attainable trade policy which helps to develop and ensure broad international market linkage and thereby generate large amount of foreign exchange. Likewise, the country has put in place an appropriate investment policy that enables to attract foreign investment which is at the centre of the country’s economic diplomacy.

The economic diplomacy policy of the country is, therefore, helping the nation to diversify its trade, investment areas and widens the international market horizon that vividly accelerated growth in these sectors of the economy.

Today, a number of companies and investors from Asia, Europe, America and the Middle East are highly interested to invest in Ethiopia more than ever. Many countries are also growing their diplomatic relations to more intensified economic ties with Ethiopia.

Recently, a two-day Ethio-Canada Business Forum was held here in Addis pursuant to Canada-Africa Business Summit held in September 2014 in Toronto where Ethiopia was showcased as a country of focus. This year marks the 50th anniversary of the beginning of diplomatic relations between Ethiopia and Canada. Canada is the third largest bilateral country donor to Ethiopia while Ethiopia is the second largest aid-recipient of Canada.

The recent business forum aims at changing the 50 years cordial relations of the two nations to a more comprehensive win-win approach based on trade and investment, for their relations in these areas is lagging behind.

Available sources indicate that trade flows between Canada and Ethiopia are modest but with the potential for growth in the short – to medium – term and are subject to significant year-to-year changes due to the one-time order of high-value products like aircraft. In 2013, the two-way trade came to $39.2 million, with $21.3 million in Canadian exports to Ethiopia and $17.8 million of imports from Ethiopia into Canada. The year before, 2012, had seen a large boost in Canadian exports to Ethiopia, which stood at $123.6 million that year, due to the delivery of a number of Q400 aircraft from Bombardier to the Ethiopian Airlines. Bombardier has also set up a regional maintenance facility for the Q400 aircraft in Addis Ababa. Canada’s imports from Ethiopia consist mainly of agri-food products, such as coffee, team spices and oil seeds.

Some Canadian companies have been investing in mining and energy in Ethiopia, to date. According to a documented source from the Ministry of Mines, 13 Canadian companies have signed contracts for the exploration of potash and precious and base metals, with a registered capital of $6.5 million. In January 2010, Canada concluded an Air Services Agreement with Ethiopia. Ethiopian Airlines flights from Addis Ababa to Toronto began in July 2012. According to a Memorandum of Understanding signed between Canada and Ethiopia in 2003, Ethiopian exports of textile and apparel goods have tariff-free access to the Canadian market.

Minister of Mines Tolossa Shagi said that there is huge investment opportunity in Ethiopia for Foreign investors and the country is looking for genuine development partners. “In our growth and transformation programme and our natural resources and infrastructural development, we need your capacity and experiences. With regard to mineral, our policy envisions the mineral to be back bone of industry and one of the most important export commodities to generate foreign currency,” said Tolosa.

Ethiopian Ambassador to Canada, Birtukan Ayano said, “the Canadian business mission would understand ample investment opportunities in the emerging economic landscape of Ethiopia.”

“Ethiopia counts Canada as a key partner of its development which has been witnessed in our poverty alleviation programmes. As we celebrate our 50 years of friendship, it is high time to complement it with a robust participation of Canadian private sector in the country’s economy. This mission is, of course, part of the ongoing effort to promote Ethiopian trade and investment opportunities to Canadian companies and investors,” she said.(Source allAfrica)

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