Germany optimistic about Ethiopia’s economy

Ethiopia is Africa’s fastest growing economy.

The meteoric rise of Ethiopia has allured foreign companies into investing in the country’s economy.

Ethiopia offers a comprehensive set of fiscal and non-fiscal incentives to encourage investment including income tax, financial and custom incentives.

Its openness to accommodate without investments has driven foreign firms into Africa’s fastest growing economy.

A Delegation of German Industry and Commerce in Eastern Africa (AHK) surveyed 39 German companies operating in Ethiopia, the first ever Business Outlook Survey of German companies in the country. The results indicated that the German firms were optimistic of both the business growth and economic transformation of the country’s economy.

Maren Diale-Schellschmidt, Country Director, Delegation of German Industry and Commerce in Eastern Africa (AHK) said, “To have 64 percent of companies express satisfaction in their current investment is no small feat. Of course, there are still some challenges such as the forex shortage which has hampered international business.

Nevertheless, this country is ripe with opportunities for partnership, trade and investment. For this reason, I am proud to announce we plan to open a permanent presence in Ethiopia in 2019.

“We want to be closer to our clients and the market to be able to provide faster and more efficient service.”

Brita Wagener, Ambassador of the Federal Republic of Germany to Ethiopia added, “The progressive spirit expressed by the country’s leadership in focusing on development activities and economic reforms is very encouraging.

The present reforms are recognized by the business community which is willing to extend its activities here in the country.” She also stated that “Ethiopia has great potential for business.”

The survey stated risks involved in business growth. According to a statement from the German embassy in Addis Ababa, “69.2 percent of the companies express financing as a risk, while a further 46.2 percent indicate that the exchange rate as an impediment. This is indicative of the foreign exchange shortage currently gripping the country.”

Volkswagen is among the latest German firms to show interest in investing in the automobile industry in Ethiopia as it looks to stretch its dominance in the East Africa region, having established itself in Rwanda and Kenya.

Source: The Exchange