Aiming to become a cutting-edge manufacturing-hub in Africa, Ethiopia has published the 10-year blueprint of development recently. Particularly, it is expected to gain progress on development of manufacturing and agriculture.
Mr. Melaku Legesse, the Consul General of Ethiopia in Guangzhou talks about the current economic cooperation between Guangdong and Ethiopia in an interview with Newsgd.com. He said the two sides have forged a strong business relationship and Ethiopia always welcome Guangdong enterprises.
Newsgd: In 2015, Ethiopia is one of Guangdong's top 10 trade partners in Africa, could you introduce the latest situation about the economic and trade cooperation between Ethiopia and Guangdong? And what are the main factors contributed to such an exciting achievement?
Mr.Legesse: Ethiopia has gained a fast economic growth for the last 12 years, while it's just a beginning for Ethiopian economy to grow. Guangdong is a manufacturing hub of the world, from which we need lots of inputs in terms of investment, construction and building up of manufacturing facilities for different kinds of industries.
We mainly import such materials including machineries, textile and other products that contributed to major part of our trade. For export, Ethiopia mainly sells agricultural products such as coffee bean and oil seeds, which are very much received by Chinese consumers.
Also, it is very convenient to do business with Guangdong enterprises. For example, it's easy to get trade partner and build a strong business relationship. Huajian (a shoe manufacturer based in Guangdong's Dongguan city ) is the leading company and in terms of investment in leather products and other companies also do a lot of investment by setting the industrial parks (in Ethiopia) for leather production. Besides, biggest IT companies like ZTE, Huawei have many infrastructure development projects in Ethiopia.
So these are the major reasons for the fast economic growth.
Newsgd: What do you think about those Guangdong enterprises' performance in Ethiopia by now?
Mr.Legesse: I would say these companies pioneer investment from Guangdong, and also they are increasing their presence and investment in Ethiopia. Guangdong has the biggest chance in the trade between Ethiopia and China.
I have been to the Hujian industrial park, Huajian is building a leather city. It is almost a small city rather an industrial park. They have already got a huge investment in working on more than 140 hectares of land with all kinds of facilities, infrastructures inside, including hospitals, hotels, schools and living residential areas. All of things a city could have are under Huajian's construction.
It impresses me the most with its modernity, they are using the leather technology to develop industrial parks. Their facilities in the park are even much more modern than what they have here (Guangdong). The other thing is their construction is growing so fast in setting up facilities. During the last government visit, they also have more than 20 companies (from Guangdong) already signed agreements with Huajian to get into the industrial park. Hence, we see more Guangdong companies to join in the manufacturing process (in Ethiopia).
Newsgd: The theme of the 2nd Investing in Africa Forum is "Experience Sharing and Investment Promotion, Building Complementarities and Shared Prosperity", do you have any message or experience for Guangdong enterprises before they have investment in Ethiopia?
Mr.Legesse: Actually it's fortunate that in last forum a very big delegation led by Guangdong government visited Ethiopia and more than 100 Guangdong companies were presented to Ethiopia. Such a conference is a big success and also in the event of Investing in Africa Forum we would like to further inform Guangdong companies our relationship is quite strong in terms of high officials, companies visits, doing business and investment.
Our cooperation will be a mode for China-Africa cooperation. And we have lots of investment opportunities and Ethiopia has a very stable and fast growing economy in Africa because Ethiopia is one of the 10 fastest growing countries in the world, and among the 3 fast-growing countries in Africa. Hence, enterprises can have a good opportunity on market access to third country where they can export their products
In addition, we do have lots of incentives and promotional package for companies to increase their investment in Ethiopia. They can be more competitive when enjoying the duty-free access and other tax incentives for investing in Ethiopia. In short, we are always welcoming companies from Guangdong.
Newsgd: What are the specific promotional package provided for overseas enterprises come to Ethiopia?
Mr.Legesse: In terms of taxes to be paid to the government, production cost, export and labor cost we do have very strong competitive advantage for attracting companies.
Apart from the duty-free privilege to take their own investment materials into Ethiopia, companies would have a "tax holiday", which means they are not supposed to pay any income tax to the local government during their investment for as long as 9 years. Besides, they are not supposed to pay their profit tax to the government for the first 10 years. And for the productions cost, you know the labor cost is quite small and other utilities like electricity price are among the cheapest countries in the world.
Newsgd: How could Ethiopia further the economic and trade investment with Guangdong in future?
Mr.Legesse: That was also the issue during government's visit of how to further cooperation in terms of investment. Guangdong can continue to be the leader of China and also for their companies in Ethiopia. I can say Guangdong (enterprises) is almost in all kinds of our development process in the leather industry, infrastructure development like trade, transport, IT system and telecom development. A very good understanding has been established between Guangdong government officials and our officials in recent visits and discussions. It means a very fertile ground has been already laid for Guangdong companies to continue their cooperation or investment in Ethiopia.
In addition to that, we have been working with different Guangdong associations and sectors in further deeper cooperation with companies. In future, we will have many business delegations from both sides. In addition to business delegations, we still encourage more companies to continue their visit and investment in Ethiopia through some associations, chambers and infrastructures.
(by Will, Chen Lu)