US-Ethiopian Summit concludes successful and US companies to invest billions in Ethiopia
Tigrai Onlne – August 04, 2014
A high level Ethiopian delegation have concluded a very successful US – Ethiopia Business and Investment Summit in the United States. The summit was held in the American cities of Houston in Texas and Los Angeles the biggest city in the state of California.
Above photo shows the Ethiopian Foreign Minister Dr. Tedros Adhanom and Ethiopian President Dr. Mulatu Teshome at the US-Ethiopian Summit.
The Ethiopian delegation which was led by the Ethiopian President Dr. Mulatu Teshome and the Ethiopian Foreign Minister Dr. Tedros Adhanom had extensive meetings with investors and business leaders in two of the biggest cities of the United States. The main aim of the summit was to show Ethiopia is ready for investing and invite big businesses and investors to come to Ethiopia to invest.
At the Summit Mr. Brien Morgan, managing partner of Detente Group announced a three billion US dollars investment on wind energy in Ethiopia. In addition, KKR Group announced to double its investment on flower investment in Ethiopia. Kohlberg Kravis Roberts (KKR) an American private global investment firm is investing $200 million dollars in Afriflora in Ethiopia. Salim group submitted a proposal to establish a household appliances assembly plant in our country. Many others have shown strong interest to invest in Ethiopia. “The outcome of the summit exceeded our expectations and we are very happy” said the Ethiopian Foreign Minister Dr. Tedros Adhanom after the summit.
Ethiopia is one of the fastest non-oil economies in the world. The Ethiopian economy is growing at a fast pace attracting many investors from around the world.
Chinese and Indians have dominated African investment in general and Ethiopia in particular. Investors from those countries have invested in construction, agriculture, horticulture, textile and other manufacturing sectors in Ethiopia.
Some companies from the United States have been involved in Ethiopia, but compared to the Chinese it is insignificant. America has realized now they are missing a golden opportunity in Africa and they are franticly trying to catch up with Easterners. Some say the Americans have lost already and what they are doing is too little, too late.
The investment of companies from the United States will create thousands of jobs and propel the Ethiopian economy to the next level. Despite the Eritrean regime’s unrelenting efforts to destabilize it, Ethiopia is the most stable country in the Horn of Africa.
The main reason for investors to pour in billions of dollars to Ethiopia is because they know the country is secure and they can trust the government and they have confidence in the Ethiopian system.
African leaders seek private investors for LAPSSET project
Tuesday, 05 August 2014
Leaders from Kenya, Uganda, Ethiopia and South Sudan are seeking private investors from the US for the US$24.5bn Lamu Port-Sudan-Ethiopia Transport and Development Project (LAPSSET) that is currently underway
The heads of state from the four African countries will engage with private American investors during the US-Africa Leaders Summit in Washington, scheduled to be held until 7 August 2014.
The leaders have also met with investors from the Middle East and the Indian Ocean Rim.
LAPSSET is a joint effort by Kenya, Ethiopia and South Sudan, which involves the development of an 800 km road system, a standard gauge railway, a 1,300 km oil pipeline, an oil refinery and an airport as well. The project will connect Kenya’s port of Lamu, Isiolo Town and Turkana oilfields.
Silvester Kasuku, chief executive of the Lapsset Corridor Development Authority, said, “Work on the US$3.1bn Lamu Port is progressing well along with the other LAPSSET projects.”
The project is also expected to aid the transport of oil from fields in southern Sudan and northern Uganda.
The four East African nations are emulating the African Development Bank’s Africa50 Infrastructure Model a special purpose vehicle expected to mobilise private sector resources for investment in major infrastructure projects.
Ethiopia Draws Asia Manufacturing Interest
The interior of George Shoe Factory, located in the industrial zone of Addis Ababa, Ethiopia.
For a long time, economists have discussed East Africa’s chances to “get a foot in the door” of global manufacturing. China, as the world’s leading hub for mass production, has become expensive due to rising labor and energy costs. Meanwhile, East Africa offers a large young and cheap labor force. Until recently though, delays at ports, bad roads, power outages and political instability have prevented a shift from happening. But now, the Ethiopian government is building new industrial mega-zones that have successfully attracted some foreign investors who are moving manufacturing from China.
He Pingting, who goes by the American name Claire, gives a tour of the new factory building of George Shoe PLC. The Taiwanese shoe manufacturer started operating some months ago and recently exported its first container: 15,000 pairs of pink and light-blue women’s shoes made in Ethiopia.
“We have so many stitchers. So, there are so many skills they need to learn. But, you know, teach them is a little bit hard because the language. …but no matter, we have a translator here and they’re very collaborative,” she said.
The factory is filled with a scent of glue. Young men and women in blue overalls sit in front of sewing machines and along assembly lines. Seven hundred Ethiopians work under Chinese and Taiwanese supervision: eight hours a day, six days a week for 800 to 1,200 Birr a month, which is about $60 (US), a fraction of a laborer’s wage in China.
Bole Lemi industrial zone
The factory building lies on the outskirts of Addis Ababa in a new gigantic 156-hectare industrial zone, called Bole Lemi. It is only one of a handful of new planned zones across the country. After the completion of the second phase – another 186 hectares – Bole Lemi may offer up to 100,000 jobs.
Ethiopia is feverishly working on becoming the world’s newest hub for manufacturing and has good chances.
“Pakistan, Indian, Taiwan, Korean, Chinese. All are there,” he said. “You see the under-construction area, sheds are already contracted out. All leased now, all are leased. For instance this one, about 11,000 square meters, the next one 5,500 square meters. And we focus on this area for garment, especially garment, for garment and shoe, glove,” said Shiferaw Solomon, the director-general of the Ethiopian government’s Investment and Industrial Zone Corporation.
Behind Shiferaw Solomon outside the factory building, construction workers are working on two dozen new sheds that are to be ready by the end of August, a bit behind schedule. According to the Ministry of Industry, 20 foreign companies have secured factories at the site.
Fast growing economy
Ethiopia currently has one of Africa’s fastest growing economies. Unlike others, it is not driven by natural resources, but large public investments with foreign money. Shiferaw is optimistic that the government’s new industrial mega-zones and expansion of the textile and leather industry will give the country another push.
“We have abundant lands, abundant labor forces, materials, raw materials. Now, we’re at a stage of opening up,” said Shiferaw Solomon.
Driving out of the industrial zone, he foresees the potential his country has for the entire region. Already a rising political power, with a massive peacekeeping force in Somalia and other parts of the region, Ethiopia – Africa’s second-most populous country with more than 90 million people – is now also heading towards a new economic age.
“I’d like and I hope to see in the future Ethiopia is one of the competing countries, interesting countries and it serves as a hub for African at large,” said Shiferaw Solomon.
But the development comes with a price. Shiferaw says Addis Ababa and the entire country will suffer from power shortages for one or two years when all companies are operating.
U.S. energy investment in Africa starts to make headway