Investment opportunities in Ethiopia

                 Investment opportunities in Ethiopia

Ethiopia is Positioned in the Horn of Africa. The country, because of its rich past, is considered a place of ancient culture where diverse cultures with diverse resources exist. Recently, international and domestic investors have been entering into the business, which shows there is untapped resources across the country and is considered a promising place for certain businesses. So investor should know the following during their investments.

a) What are the opportunities?

1. Agriculture: As Ethiopia is an agrarian-based economy, the country has abundant resources in agriculture with diverse ecological zones. For instance, investment in crop, poultry farming, coffee, tea, spices, oil crops, pulses, cotton, Hides & skins processing, and livestock, etc. while making this investment, there may be a shortage of finance, the investor may look for financial institutions to finance its investment like agricultural term loan which is provided by bank with excellent customer services.

Despite these challenges, the agriculture sector contributes the largest share of GDP of Ethiopia and serves as the backbone of the economy by employing over 70% of the population and 34.1 % of GDP. over time, the share of the agriculture sector is declining and overtaken by services sector.

2. Manufacturing sector: The country is led by agricultural development led industrialization there is a high potential resources that would be used in raw material. manufacturing sector. The sector has an opportunity in investment of Textiles & Garments/Apparel, Leather & Leather Products, Agro -processing, Chemical & Construction Material Products, Pharmaceutical Products, and Metal Fabricated Products. In this regard the investor may be participate in export activities which may takes receive the cash from abroad in this case Coopbank provides like letter of credit facility, pre-shipment export credit facility, and over draft facility.

3.Service sector: Government gives priority and huge investment in the service sector especially tourism sector and the country have untapped resources in tourism by registering 9 World Heritage attractions this makes the country to be the first choice for investment in tourism sector. In addition, the service sectors have a lot of opportunities like real state, hotels and hospitality.  The important consideration for the investor to consider while selecting sector and financing models

1. a) Making a pre-feasibility study: a feasibility study is a vital analysis that considers all of a project’s relevant factors to determine the likelihood of completing the project successfully. That leads the investors to identify a shortage of factors of production and examine how to acquire those resources by linking with financial institutions.
2. b) Identifying financing method: Examining the finance mechanism is important for the success of the project in addition to initial capital. Is that the financing is from commercial bank or any other. While selecting banks the investor should consider which bank is suitable and can handle the loan request and process it in short period of time.
3. c) Operating and entering to full production scale: after identifying its feasibility, financing method and its return, the company enter into a full production which leads to sell their product and receiving a payment from its customer. To reach more customer and adopt cashless mechanism, Coopbank provide E-birr platform for your merchants, for your agents and customers and it is an indispensable platform to pay and receive any form of transactions.

Why Ethiopia is the destination for Foreign direct investment