In its latest reform to loosen the
government’s control of the economy, Ethiopia has finally decided to
open its logistics sector to foreign investors.
government’s control of the economy, Ethiopia has finally decided to
open its logistics sector to foreign investors.
But the country would cap its participation, the state investment body has said on the reform strategy.
Prime Minister Abiy Ahmed has presided
over a shake-up of one of the most heavily-regulated economies in Africa
since his appointment in April.
over a shake-up of one of the most heavily-regulated economies in Africa
since his appointment in April.
But while Ethiopia has introduced
incentives such as tax holidays and subsidized loans to boost
investment, bureaucracy and logistics constraints leave it at a low
ranking in World Bank global trade logistics indexes.
incentives such as tax holidays and subsidized loans to boost
investment, bureaucracy and logistics constraints leave it at a low
ranking in World Bank global trade logistics indexes.
The latest move by the Ethiopian
Investment Board – a body headed by Abiy and comprised of several
ministers and the central bank governor – lifted restrictions on foreign
investment in packaging, forwarding and shipping agency
services.
Investment Board – a body headed by Abiy and comprised of several
ministers and the central bank governor – lifted restrictions on foreign
investment in packaging, forwarding and shipping agency
services.
Those sectors were previously reserved
exclusively to Ethiopian nationals. Foreign firms will now be allowed to
take stakes of up to 49 percent in logistics businesses.
exclusively to Ethiopian nationals. Foreign firms will now be allowed to
take stakes of up to 49 percent in logistics businesses.
The Ethiopian Investment Commission, a
government body that handles investment issues such as licensing and
promotion, said opening up this sector to foreign investors had become
necessary.
government body that handles investment issues such as licensing and
promotion, said opening up this sector to foreign investors had become
necessary.
This will “improve the provision of
high-end logistics services while local firms acquire world class
knowledge, expertise, management, and systems by working jointly with
globally reputed logistics providers,” it said in a statement.
high-end logistics services while local firms acquire world class
knowledge, expertise, management, and systems by working jointly with
globally reputed logistics providers,” it said in a statement.
The ruling EPRDF coalition, in power
since 1991, has long supported deep state involvement. But it said
earlier this year that Ethiopia needed economic reforms to sustain rapid
growth and boost exports amid a severe hard currency
shortage.
since 1991, has long supported deep state involvement. But it said
earlier this year that Ethiopia needed economic reforms to sustain rapid
growth and boost exports amid a severe hard currency
shortage.
Abiy, 42, was appointed by the EPRDF
after his predecessor, Hailemariam Desalegn, resigned in February after
three years of unrest in which hundreds of people were killed by
security forces.
after his predecessor, Hailemariam Desalegn, resigned in February after
three years of unrest in which hundreds of people were killed by
security forces.
Source: VOA
