BUILDING INDUSTRIALIZED

ETHIOPIA:
YOUR NEXT
MANUFACTURING
INVESTMENT DESTINATION

Showcasing SCAN ME
Ethiopia’s
Manufacturing
Potential
Dive into the dynamic landscape of
Ethiopia's manufacturing prowess, offering
enticing investment opportunities.

Unearth the wealth of raw materials and

supporting industries that form the
foundation of Ethiopia's manufacturing
excellence.

CONTACT US
(+251) 115158035
Ethiopian Ministry of
Industry
info@moi.gov.et
Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

MANUFACUTURING INDUSTRY
An overview of Ethiopia's vision for becoming a manufacturing hub

Aspiring to become the Manufacturing The industry sector has experienced

Hub of Africa by 2030, the Ethiopia
Government set a pragmatic multi-sector
pronged development approach and
make the manufacturing sector the
leading contributor to the GDP by the end
of the decade by increasing the sector’s
production and productivity, unlocking
export promotion potential, and
developing private enterprises.
significant growth and transformation in
recent decades standing at a 27% average
productivity growth rate duly for the
ambitious industrialization policy laid out
under the consecutive Growth and
Transformation Plan I and II and the Home
Grown Economic Reform 1.0 and 2.0.

Insights into the future of

Ethiopia's manufacturing
sector

In the next decade, Ethiopia's

manufacturing sector is positioned to play
a pivotal role in the country's journey
towards becoming a middle-income
economy. As the sector continues to
evolve, it is contributing to infrastructure
development, technology transfer, and
skills enhancement, ultimately fostering a
more diversified and robust economy.

The manufacturing sector has

demonstrated a consistent pattern of
growth over the last decade. With a
compounded annual growth rate (CAGR) of
3% in value addition and 14% in value-added
production, this sector has become a vital
component of the country's economy.
Currently, it contributes significantly to the
GDP, accounting for approximately 6.7% of
the total. Moreover, it plays a crucial role in
employment generation, maintaining an
average employment share of 5.2%.

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

KEY SECTORS A key contributor to the national economy,

Key industries in Ethiopia
encompass food and beverage,
textiles and apparel, leather and
leather products, chemicals,
construction materials, and metal
and engineering.
These sectors have shown robust
growth in terms of production
volume, job opportunities, and
more.
supported by Ethiopia’s agro-climatic zones, fertile
Food & soils, and three Integrated Agro Industry Parks, the
Beverage sector presents opportunities in dairy, juice
extraction, flour, edible oil, poultry, honey
processing, and more.
With abundant cotton production potential and
targets a $30 billion export value by 2030,
Textile & opportunities for investment range across
Apparel processing, garment production, and components
and accesories manufacturing, tapping into the
growing global apparel market.

A large livestock population enables the leather

Leather & industry as a strategic priority. Investors can engage
in tanning hides and skins, and manufacturing
Leather footwear, gloves, and accessories like soles,
Products synthetic thread, and zippers for both local and
export markets.

The industry provides opportunities driven by

increasing demand in real estate and household
Chemical & national and regional consumption trends. Investors
Construction can explore basic chemical production from local
Input Industry raw materials, manufacturing of pulp and paper
product, detergent, and other essential and basic
chemical products.

Opportunities include machinery, equipment, metal

Metal & and steel manufacturing, automotive industries, and
Engineering electrical and electronics, with iron ore deposits
Industry available in multiple regions and the support of
industrial parks.

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

Building Industrialized
Building IndustrializedEthiopia:
Ethiopia:Your
YourNext
NextManufacturing
Manufacturing Investment Destination
Investment Destination

INVESTMENT
INCENTIVES
Ethiopia's favorable investment climate, competitive labor
costs, and preferential trade agreements have attracted
both domestic and foreign investors, leading to the
establishment of numerous industrial parks and the rapid
expansion of industries.

The newly revised investment proclamation opened up

new sectors for foreign investors, streamlined investment
establishment procedures to reduce bureaucratic hurdles
provided equal treatment for domestic and foreign
investors, extended land lease and production facility
provisions, and introduced a wide range of investment
incentives.

DUTY EXEMPTIONS TAX EXMPTIONS EXPORT

100% exemption from
duties on machinery and
equipment imports
Duty and tax exemption
to build factories
Duty-free spare parts, up
to 15% of total capital
goods
Duty-free delivery vans
and trucks for eligible
sectors
Income tax exemptions
from 1 to 6 years
10-15 years of income tax
exemption for industrial
park developers.
A 30% time-bound income
tax deduction in under-
developed regions
Loss carry-forward for up
to half the income tax
exemption period
Export tax exemption for
export excluding hides & skins
Duty-free import of raw
materials for export products
Income tax exemption for
foreign nationals
2 more years of exemption for
industrial park enterprises
with high export percentages
Export credit guarantee to
facilitate access to bank
credit
Franco Valuta import of raw
materials allowed for export
processing enterprises

NON-FISCAL INCENTIVES
Forex retention – Exporters can keep up to 20% of foreign exchange
earnings and operate foreign currency accounts

Remittance – Foreign investors can remit funds for purposes like

profit and dividend repatriation, loan interest and principal
payments, and other valid reasons.

Credit access – Access long-term, low-interest credit, project

financing, and lease financing for machinery and equipment
through the Development Bank of Ethiopia.

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

 Building
BuildingIndustrialized
Industrialized
Ethiopia:
Ethiopia:
Your
Your
Next
Next
Manufacturing
Manufacturing
Investment
Investment
Destination
Destination

The Ethiopian government has developed several initiatives, policies, and

strategies to create an enabling environment for private manufacturing industries

Ethiopia Tamrit: A national movement to boost the manufacturing industry,

launched by Minister of Industry H.E Melaku Alebel on May 7, 2022.
It aims to coordinate government, private and development partners’ efforts to
address the sector’s challenges and create a competitive and diversified
domestic industrial base that can support economic growth and reduce
dependency on imports.

Manufacturing Sector Policy: Ethiopia’s Home-Grown Economic Reform Agenda

outlines a comprehensive industrialization policy.

It focuses on key manufacturing sectors and aims to attract investors to the

manufacturing sector and to improve infrastructure development for industrial
park and industrial clusters.

Ethiopia has a dedicated ministry and several government agencies mandated

with supporting manufacturing development

Formulates policies, strategies, implements programs

Ministry of Industry
Oversees the development of industrial parks and zones

Responsible for promoting and facilitating investment Ethiopian Investment

Grants licences, and provides aftercare services Commission

Industrial Parks
Plans, develops, and manages industrial parks
Development
Offers infrastructure and services
Corporation

Sets and enforces national manufacturing standards Institute of Ethiopian

Trains, certifies, and promotes quality control Standards

Manufacturing Industry Provides capacity building, provides R&D support

Development Institute Provide market information and linkage opportunities

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

ETHIOPIA’S EXPORT Exports achieved a historic high of $4.1

TRADE PERFORMANCE
billion in the 2021-22 fiscal year,
marking a substantial increase from
previous years. Manufactured goods
constitute a significant portion of
Ethiopia's merchandise exports
contributing over $500 million in export
trade earnings, becoming the second
top contributor to Ethiopia’s export
trade revenue next to agriculture.

Key export sectors include leather and

leather products, textiles and apparel,
and food and beverages. Top export
destinations during this period included
Switzerland, the Netherlands, the USA,
Somalia, Saudi Arabia, and Germany. An
additional seven countries (UAE, Japan,
Djibouti, Belgium, Israel, South Korea,
and China) also imported a significant
amount of Ethiopian products.
Collectively, these 13 nations represent
Ethiopia's most vital export destinations.

TRADE AGREEMENTS AND PARTNERSHIPS THAT

BENEFIT MANUFACTURERS
Ethiopia enjoys a strategic position in various international agreements and organizations,
fostering its economic opportunities. It is a beneficiary of the European Union's "Everything
but Arms" initiative, which grants preferential access to EU markets. Furthermore, Ethiopia is
a member of the Multilateral Investment Guarantee Agency (MIGA) and the World
Intellectual Property Organization (WIPO), signifying its commitment to international trade
and intellectual property rights.

Ethiopia has also established more than 30 bilateral investment promotion and protection
agreements, enhancing its attractiveness for foreign investments. Most notably, Ethiopia is
a proud member of the African Continental Free Trade Area (AfCFTA), providing access to a
vast market encompassing 55 countries, 1.3 billion consumers, and a combined GDP of $3.4
trillion. These affiliations and agreements position Ethiopia as a significant player in global
trade and investment.

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

INFRASTRUCTURE AND LOGISTICS DEVELOPMENT

Ethiopia prioritized public and private infrastructure investments in building
sustainable and integrated infrastructures and logistics systems are directly
linked with the productive sectors for a sustainable supply-chain development
focusing on manufacturing, agriculture, and mining corridors.

A FEW HIGHLIGHTS | INFRASTRUCTURE

THE GRAND ETHIOPIAN RENAISSANCE

DAM (GERD)
The project aims to generate 6000 MW
energy to provide a sustainable source of
clean energy, enhance water management
for irrigation and agriculture, and
strengthen Ethiopia's resilience to climate
change impacts.

ETHIO-DJIBOUTI RAILWAY
In January 2018, Ethiopia inaugurated the Ethio-
Djibouti Railway, connecting Addis Ababa to the
port city of Djibouti. This project enhances
regional connectivity, facilitates trade, and
promotes economic growth in both countries.
The railway was constructed with a focus on
sustainability, using modern technology and
environmentally friendly practices.

NATIONAL ELECTRIFICATION PROGRAM

The program aims to expand access to
electricity in Ethiopia focusing on renewable
energy sources, such as hydropower, wind,
and solar, to build a sustainable and resilient
energy infrastructure and change the power
distribution gap only 27% of rural households
has access

RENEWABLE ENERGY PROJECTS

Ethiopia has made notable progress in
renewable energy, investing in wind, solar, and
geothermal projects. The Aluto-Langano
Geothermal Power Plant, commissioned in 2018,
adds clean energy to the grid. The Ashegoda
Wind Farm supports industrial growth and
decarbonization via affordable clean energy.
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FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY
Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

INFRASTRUCTURE AND LOGISTICS DEVELOPMENT

To expedite the infrastructure and logistics sector development, the government
established the Ethiopian Investment Holdings to identify underperforming state-
owned enterprises and implement reform measures, and to bring in private
sector expertise and capital into sectors traditionally dominated by state-owned
enterprises.

A FEW HIGHLIGHTS | LOGISTICS

NATIONAL LOGISTICS STRATEGY

Formulation of the National Logistics
Strategy (NLS) aimed at enhancing the
efficiency and effectiveness of logistics
and transport systems in Ethiopia, with a
particular emphasis on production
corridors-based logistics system
development - more than 2 Bn USD
allocated to enhance the capabilities of
Modjo, Jigjiga, Gambella, and Awash dry
ports and facilitate the development of
multimodal transport.

DRY PORTS ESTABLISHMENT

National logistics projects underway to
establish dry ports in various regions of the
country to facilitate the handling and
movement of cargo to boost inland terminals
for customs clearance and transshipment of
manufactured goods.

INVESTMENT REFORM

Liberalized private investment and allowed

PPP formulation in logistics services such as
packaging, warehousing, and freight-
forwarding for joint investment including
partnerships for port development and
management.

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FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY
 Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

RESOURCE ENDOWMENTS
Several natural resources are available for the manufacturing sector in addition to the
agricultural resources available for food and beverage manufacturing in Ethiopia,
which are in abundance including animal products, fruits and vegetables, root crops,
grains etc.

METALLIC MINERALS
Fundamental for industrial development gold, platinum, iron,
nickel, chromite, and base metals are available in the
southern, western, and northern belts of Ethiopia.

ENERGY MINERALS
Lithium, graphite, tantalum, coal, and oil are found in
Eastern Ethiopia notably in the Ogade, and Gambella
Basins.

CEMENT MINERALS
Limestone, gypsum, clay, and pumice are abundantly
available from volcanic and sedimentary rocks that originate
from the formation of the Ethiopian Rift Vally, a subsection of
the greater East African rift.

CERAMICS AND GLASS MINERALS

kaolinite and feldspar are available - the main sources of
kaolin for the ceramic industry in Ethiopia are the
weathering products of granites and pegmatites. 6 tonnes
of silica sand, feldspar, quartz, and calcitic marble are
available in Central, Southern and Eastern Ethiopia.

PRECIOUS STONES

Platinum, opals, emeralds, and sapphires are found in Southern

Ethiopia (Borena and Guji zones) and Central and Northern
Ethiopia (Wegel - Tena, Mezezo)

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY

 Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination
INDUSTRIAL PARKS TO
FOSTER COLLABORATION
AMONG MANUFACTURERS
Ethiopia boasts a diverse network of 22
strategically located industrial parks
across key economic corridors, including
15 government-owned parks and 7 private
ones. Additionally, Ethiopia is home to 4
integrated agro-industrial parks, with 3 of
them already operational. These three
integrated agro-industrial parks are
situated in the Amhara, Oromia, and
Sidama regions, representing notable
hubs for agro-industrial activities and
economic development.
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA - MINISTRY OF INDUSTRY
OPERATING WITHIN THE PARKS
OFFERS A MYRIAD OF
ADVANTAGES:
Easy access to service land and affordable
pre-built factory sheds for rent or
purchase.
Streamlined access to government
agencies through a one-stop shop,
including on-site custom clearance
services.
Inclusion of housing infrastructure for
employees, as well as daycare and
schooling services for families.
Built-in accessible electricity and water
supply with a dedicated power line and
IPDC support for utility access.
Availability of laboratory services and
training centers.
Utilization of common facilities, including
solid and liquid waste management and
zero liquid discharge technology.
Convenient proximity to transport
infrastructure such as main roads and
airports, enhancing logistics and
connectivity for businesses.
 Building Industrialized Ethiopia: Your Next Manufacturing Investment Destination

ETHIOPIA’S VALUE PROPOSITION

Ethiopia is Africa’s second most populous nation with a population size

01 of 120 million with 54% active labour force, trainable and available at
competitive wage rate

Proximity to major global market destinations such as the Middle East,

02
Europe, and Asia giving manufacturers in Ethiopia access to 3.5 billion
people living within less than 8 hours flight from its capital Addis Ababa

03 Abundant raw materials and inputs to manufacturing enterprises due to

diverse biodiversity and land as natural endowments

Duty-free, quota-free access to EU, Canada, China, Turkey, Australia,

04
New Zealand and preferential markets to India

Hosting the biggest passenger and cargo airline in Africa linking the
05 country to 127 destinations worldwide and providing preferential
services and prices for exporters

CONTACT US
(+251) 115158035 Ethiopian Ministry of
Industry
info@moi.gov.et