Borkena

– A Chinese Business Delegation is in Ethiopia for a working visit. Ethiopia’s Ministry of Foreign Affairs (MFAE) on Monday disclosed that State Minister Hadera Abera  met the leader of the delegation, Wang Xiaohan,  Shanghai Federation of Industry and Commerce (SFIC)

Ethiopia has been attempting to attract more Chinese investment to the country. During the meeting with Mr. Wang and members of his delegation, Ambassador Hadera, called on Chinese companies to invest in Ethiopia. He stated,  “the macroeconomic reforms being implemented in the country have created favorable investment opportunities,” as cited in the Ministry’s news update.  

At the core of Ethiopia’s macro-economic reform which was introduced in July 2024,  Abiy Ahmed’s ended Ethiopia’s fixed foreign currency exchange rate regime to give way to “market-based” exchange regime which led to the depreciation of Ethiopian currency by more than 100 percent in a span of six months.  Not just that, this government legislated laws to allow property ownership of foreigners in the country and open the banking sector to foreign investors.  The economic measures have been backpacked as tools to achieve  “homegrown economic growth.” 

Apart from the security situation in the country due to the ongoing wars in the Amhara and Oromia regions, a tense situation is developing in the Tigray region of Ethiopia. Some politicians from the region and beyond tend to see inevitable conflict in the region which could involve the Abiy Ahmed led Federal government. 

Yet, the Chinese delegation seems to be capitalizing on what it called “significant market opportunity.”  Mr. Wang Xiaohan, reported stated that “Shanghai-based companies are particularly interested in investing in Ethiopia in various fields, including Artificial Intelligence (AI), Information Technology (IT), and infrastructure development.” as highlighted MFAE’s update. Recently, there had been reports from diaspora based Ethiopian media outlets like EMS and Anchor Media that foreign investors left the country due to unfavorable business environment in the country.  

However, there are also reports that Chinese Investment has been increasing in the country. Ethiopia’s Investment Commission reported $3.92 billion new FDI in 2024 and 50 percent of it was from China, according to Xinhua Chinese news source. 

The source also reported ,  citing Zeleke Temesgen who is commissioner of Ethiopia’s Investment Commission, there are  “4,510 Chinese-run projects in Ethiopia, representing the largest foreign investment in terms of both capital and number of projects.” 

The Chinese firms have mostly been investing in textiles, information and communication technology, manufacturing and logistics sectors in Ethiopia. 

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