Dive into this engaging dialogue featuring H.E. Mr. Demeke Atnafu, the Ethiopian Ambassador to India, as he engages with Kanchi Batra, the Managing Editor of Diplomatist. In this conversation, Ambassador Demeke explores the vibrant relationship between Ethiopia and India, delving into collaborative avenues, Ethiopia’s appealing business environment, and the thriving educational partnerships that have cemented this enduring connection.
Could you elaborate on the current state of cooperation between Ethiopia and India in key sectors such as agriculture, textile, pharmaceuticals, and mining?
Ethiopia and India have enjoyed a highly productive and mutually beneficial partnership, particularly in the realms of trade and investment. This collaboration is evident in various sectors, with a significant focus on investment. To provide some context, Ethiopia has granted licenses to more than 650 emerging companies, representing a staggering total investment of five billion U.S. dollars. Notably, 68% of these ventures are engaged in manufacturing, with an additional 13.1% dedicated to agriculture.
The synergy between Ethiopia and India extends to multiple sectors, notably agriculture, textiles, pharmaceuticals, and mining. In the agricultural domain, for instance, out of the 650 companies invested in Ethiopia with a combined capital of five billion dollars, approximately 13.2% are actively contributing to agriculture and floriculture. The potential for further growth in this sector is immense, considering Ethiopia’s abundant untapped opportunities in agriculture, food processing, and agro-business. Our country boasts fertile lands, abundant water resources, and diverse agro ecological zones, making it an attractive destination for Indian investors.
Moving on to textiles, Ethiopia has emerged as a noteworthy destination for Indian investments, with Indians ranking as the second-largest investors in the textile and garment sectors. More than 25 Indian companies have already ventured into these sectors. There is substantial potential for further expansion, particularly in textile manufacturing and garment production. Ethiopia’s vast untapped resources, competitive labour costs, and advantageous geographical location position it as an ideal hub for Indian companies to maximize profits and explore new opportunities.
In the pharmaceutical sector, Ethiopian pharmaceuticals are experiencing remarkable growth, with several Indian companies, such as Kilitch, Africure Pharma from Mumbai and Global Care from Chennai, investing significantly. The pharmaceutical sector in Ethiopia has been growing at an impressive rate of 15% annually and represents a domestic market worth one billion USD, with an additional 20 billion USD available in the broader African market. The Ethiopian government offers enticing incentives for those establishing pharmaceutical units, making it a key sector for potential Indian investors.
Mining is another promising sector in Ethiopia, characterized by abundant untapped mineral resources, including gold, platinum, and marble. Ethiopia also stands out as an emerging destination for oil and gas exploration, offering competitive royalty rates ranging from 4% to 7%. These incentives make Ethiopia an attractive prospect for mining investments, offering a wealth of opportunities yet to be fully explored. Moreover, Ethiopia presents an enticing investment landscape due to its low labour costs, competitive electricity and water rates, and its strategic location with access to a market of over 127 million in Ethiopia and 1.3 billion people in Africa. Connectivity is seamless, with Ethiopian Airlines serving 137 international destinations and connecting to 64 African cities, facilitating trade and investment between our nations.
In conclusion, Ethiopia and India share a rich history of collaboration, which has paved the way for substantial growth in various sectors. Ethiopian officials welcome Indian investors to explore these promising opportunities and partake in our nation’s journey towards economic advancement and development.
As the new Ambassador of Ethiopia to India, what is your vision for further strengthening the existing friendly ties between our two nations? How do you envision expanding collaboration beyond the current sectors of cooperation?
Apart from our traditional areas of cooperation, there exists a vast scope for collaboration between Ethiopia and India across a spectrum of sectors. The Ethiopian government has outlined five priority sectors, including agriculture and agro-processing, manufacturing, Information and Communication Technology (ICT), tourism, and mining. To effectively implement these priorities, we have initiated the National Digital Transformation Plan, known as Digital Ethiopia 2025, under the oversight of the Ministry of Technology and Innovation. This ministry is tasked with standardizing and driving the digitalization of our country.
Beyond the sectors traditionally associated with investment, there are significant opportunities for Indian companies to engage with Ethiopia, particularly in the IT and technology sector. Ethiopia has established an IT village with modern infrastructure to support this endeavour. India’s rich experience in information technology and digitalization makes it an ideal partner to further develop this sector.
Additionally, Ethiopia is keen to welcome more Indian businesses, especially in telecommunications, telecommunication equipment manufacturing, telecom equipment services, information technology services, and banking. The recent liberalization of banking and telecommunications sectors allows for greater foreign investment. With India’s expertise in these areas, we anticipate substantial growth in these sectors.
The investment climate in Ethiopia has garnered international attention. Could you outline the key factors that make Ethiopia an attractive destination for foreign investments, particularly from India? What are the incentives and support mechanisms in place to encourage and safeguard foreign investments?
Several factors make Ethiopia an attractive investment destination for Indian investors. Firstly, our country offers access to a vast market. Ethiopia is the second-most populous country in Africa, with over 127 million people. Furthermore, as a member of the African Continental Free Trade Area (AfCFTA), Ethiopia provides access to a broader African market of 1.4 billion people. Our capital, Addis Ababa, is also known as the political and diplomatic capital of Africa, serving as a central hub for the continent.
Secondly, Ethiopia boasts a youthful and skilled workforce. Over 70% of our population is below 30 years of age, offering a significant labour force that can be readily trained and employed. The competitive labour costs in Ethiopia make it a cost-effective choice for businesses.
Thirdly, Ethiopia has invested heavily in education. We have over 60 public universities and more than 1300 vocational and technical colleges, producing a steady stream of educated and skilled labour. English serves as the medium of communication, further facilitating business operations.
Fourthly, Ethiopia’s energy sources primarily rely on hydropower, with the construction of the Grand Ethiopian Renaissance Dam set to generate 6,500 megawatts of electricity. Consequently, our electricity rates are among the most competitive in the world, at just 0.04 USD cents per kilowatt-hour. Moreover, Ethiopia is often referred to as the “Water Tower of Africa,” with abundant and affordable water resources.
Finally, land is readily available for lease in Ethiopia. The government has established more than 22 industrial parks, offering modern infrastructure and services. Land can be leased at nominal rates, ensuring a hassle-free setup for businesses.
Ethiopian Airlines further enhances connectivity, with flights to 135 international destinations and 64 African cities. This connectivity facilitates trade and investment, reducing travel time for Indian businesses. It operates flights to 4 cities in India, New Delhi, Mumbai, Bangalore and Chennai.
Overall, I would say Ethiopia offers a favourable investment climate, supported by a burgeoning economy, abundant resources, a skilled workforce, and a strategic location in Africa. Our government is committed to fostering strong bilateral relations with India, and we look forward to welcoming more Indian businesses to our country to explore these emerging and untapped sectors of investment.
In the context of boosting bilateral trade, how do you perceive the role of cultural and people-to-people exchanges between Ethiopia and India? How can these interactions contribute to fostering a deeper understanding and partnership between our countries?
Regarding the role of cultural and people-to-people connections, Ethiopia and India share a rich historical and civilizational bond that spans millennia. Culturally, we have always had a connection, which has influenced the way our people perceive each other. Cultural interactions create positive sentiments, foster mutual understanding, and enhance diplomatic relations.
Promoting these cultural ties can be achieved through various means, including cultural exchanges, showcasing each other’s cultural heritage through exhibitions, music, dance, films, and theater performances. By doing so, we can raise awareness among our peoples about our shared values, art, and heritage, ultimately creating a conducive environment for closer ties in trade, investment, and political cooperation.
We have observed a growing trend of Ethiopian students choosing India as their destination for higher education, how do you envision this trend evolving in the coming years? Are there any specific strategies or initiatives in place to further facilitate and enhance the educational exchange between Ethiopia and India?
Ethiopia has witnessed a growing number of students pursuing education in India, and this trend is indeed positive. This is a testament to the strong educational ties between our two nations. Ethiopia has a deep appreciation for India’s contributions to modernizing our education system in the 1960s. Thousands of Indian teachers came to Ethiopia, laying the foundation for our modern education.
Today, we have more than 60 public universities with Ph.D. programs, thanks to the initiatives of Indian professors who helped establish these programs. Additionally, we’ve had Ethiopian students studying in India for decades. Over the years, our educational relationship has only grown stronger.
Ethiopia sees India as a second home for education, with thousands of Ethiopian students choosing India for higher education. The ties between our countries are deeply rooted in education, and this will continue to strengthen our bilateral relations.
In summary, cultural exchanges and educational ties have played and will continue to play a vital role in fostering deeper relations between India and Ethiopia. These interactions create lasting bonds that transcend borders and contribute to the broader partnership between our two great nations.
Your last message…
In my role as an ambassador, my primary objective is to actively contribute to the strengthening and broadening of the already existing outstanding cooperation and partnership that exists between our two nations. This partnership encompasses a wide spectrum of areas, most notably in politics, economics, education, investment, and trade.
When we examine our trade relations, it’s remarkable to note that Ethiopia and India have been engaged in trade since the 1st century AD, representing a rich history of over two millennia. While our bilateral trade currently stands at approximately $2.2 billion, there remains significant untapped potential to further increase and diversify the trade between our countries. We aspire to broaden the range of traded goods and encourage Indian companies to consider Ethiopia as a destination for expanding their trade activities. Ethiopia is strategically located as the second-largest market in Africa, offering immense opportunities.
Turning to the realm of investment, Ethiopia presents substantial prospects for Indian investors, particularly in sectors like agriculture and agro-processing, manufacturing, especially in pharmaceuticals and other manufacturing segments. Furthermore, Ethiopia is actively seeking Indian engagement in the exploration of our largely untapped mining sector, which holds significant potential. We are particularly eager to welcome Indian investments in this domain.
Moreover, the field of digitization offers a promising avenue for collaboration. India possesses a comparative advantage in this area, which aligns with Ethiopia’s efforts to digitally transform our economy and public services. We recognize the substantial demand for Indian expertise in this sector and invite Indian businesses to participate actively.
Additionally, the financial sector is an area of great interest. The Ethiopian government has opened up the telecommunications sector, and we have already witnessed the participation of around 30 Indian telecommunications equipment manufacturing and service providers on India-Africa ICT Expo held in Addis Ababa. This is a promising trend, but we aim to further strengthen Indian involvement in this sector. In my capacity as Ambassador of Ethiopia to India, I will exert relentless efforts diligently to elevate the existing friendly relationship between Ethiopia and India to the status of a strategic partnership. My priority is boosting trade and investment, fostering more extensive collaboration and cooperation in education, knowledge transfer, technology sharing, and various other sectors. I am committed to facilitating and supporting Indian companies in their endeavours and solidifying the business-to-business ties that benefit both countries immensely. This journey has been truly fulfilling, and I look forward to further enhancing the bonds between our two nations, by elevating the relationship to strategic partnership.
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