INTERVIEW: Ethiopia Seeks Investment by Japanese Manufacturers

November 10, 2018

Tokyo--Arkebe Oqubay Metiku, head of the economic planning, monitoring and supporting sector at the office of the Ethiopian prime minister, has called on Japanese manufacturers to invest in his country.

Labor costs in the African country are "lower than in Asian countries," Arkebe said in a recent interview with Jiji Press in Tokyo, adding that Ethiopia, with a population of some 100 million, is an attractive market.

In 2011, the country established the Ethiopian Kaizen Institute, a government agency, to promote kaizen, a Japanese method for improving productivity. Strengthening the manufacturing sector is a pillar of the Ethiopian government's economic development policy.

"Japanese firms have primarily focused in Asia because geographical proximity was important for building supply chains," Arkebe said.

But labor costs are now increasing in Asia while the investment climate in Ethiopia is "improving," he said.

According to the Japan External Trade Organization, wage levels in Ethiopia are less than half those in Bangladesh, where the textile industry is thriving.

Ethiopia is geographically close to other African countries, the Middle East and Europe, Arkebe stressed, while indicating the country's readiness to cut corporate tax to support exporters.

The Ethiopian economy has been expanding at an annual rate of around 10 pct since 2004.

On the back of its strong economic growth and large population, Ethiopia attracted foreign direct investment worth 3.6 billion dollars in 2017, up more than 10-fold from 2010. Of the total amount, some 90 pct was invested in the manufacturing sector, according to Arkebe. Jiji Press