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Results of the Russia-Ethiopia-Djibouti forum: prospects for business development

Part 2. Ethiopia's economy - from agrarian to new industrial
Ethiopia is a special country for both Russia and Africa. Despite the rich history of the Horn of Africa as the "cradle of humanity", Ethiopia has proved to be the only African country that has been able to maintain its independence for most of its history and regularly rebuff colonizers. Even during the brief period of Italian annexation, Ethiopia could not be called a full-fledged colony. In this regard, the location of the headquarters of the African Union in Addis Ababa is natural.

According to Irina Abramova, Director of the Institute of African Studies of the Russian Academy of Sciences, in more than 120 years of relations with Ethiopia, Russia has never solved its problems on the basis of unilateral advantage or colonial conquest.

According to Abramova, based on the new political reality, Russia is in the same boat as African countries, in this regard, she expressed hope that the upcoming 2nd Russia-Africa summit will be "a forum not of prospects, but of concrete results." She also expressed the hope that a joint Russian-Ethiopian biological centre would be established in Ethiopia before the November summit.

The Russian Ambassador to Ethiopia, Evgeny Terekhin, spoke at length about Ethiopia's impressive economic successes, which are unfortunately overshadowed by the information backdrop of the Tigray conflict.

Terehin's Ethiopian colleague Alemayehu Tegenu later complained about problems with the information distortion of the situation by the Western media, which uses a lot of fake news that hits Ethiopia hard. According to Tegenu, this sets a dangerous precedent of viewing the situation in a one-sided manner that does not take into account the interests of the majority of the Ethiopian population and the country's official authorities.

It was often said at the forum that the prospects of economic cooperation between Russia and Ethiopia are almost unlimited: from leather to military cooperation, from hydropower to information technology.

Russia's foreign trade turnover with Ethiopia in 2020 was $49 million. Key exports include wheat and meslin (a 2:1 mixture of wheat and rye) - 41%, and rolled metal products - 12%.

The structure of Ethiopian exports to Russia is still extremely poor. Agricultural products account for 89% (of which coffee accounts for 3/4 and beans for 9%) and textiles for 10%.

The development of Ethiopia's extensive agricultural system requires modern agronomic technology, which Russia can offer. Other opportunities on the Ethiopian agricultural market include the need for an additional one million tonnes of fertiliser and the annual import of huge volumes of grain through Ethiopia's public procurement system.

The forum drew attention to the opportunities presented by Ethiopia's exemption from the AGOA programme, which gave local producers duty-free access to the US market. Ethiopia has developed a wide pool of producers who are successfully represented in the competitive US market. In their search for new markets, these companies have also turned their attention to the Russian market. Russian retail chains should be extremely interested.

Chairman of AFROCOM, Russian Senator Igor Morozov noted the presence of 53 million cattle in Ethiopia, useful also for leather production. In this regard, in the framework of the February business mission, AFROCOM plans to bring to Ethiopia heads of large Russian tanneries, which, according to Morozov, face an acute shortage of quality and inexpensive raw materials.

Ethiopian Ambassador to Russia Alemayehu Tegenu in his speech thanked AFROCOM for its support and cooperation and said:
"Russia is one of those countries that speaks the truth, stands for the original principles of the UN and for international law. Russia has always fought for the independence of Africa.

Alemayehu Tegenu once again outlined one of the main objectives for Ethiopia's economy - to become an agrarian industrial country by 2050. The ambassador listed many areas for investment in Ethiopia's economy: textile production, pharmaceuticals, tourism, information technology, energy, mining, transport and many others.

Elena Konstantinova, Senior Manager Sales and Marketing, Ethiopian Airlines, described the activities and development plans of the airline, which has been voted Best Airline in Africa for 4 years running. It is the only company that can fly from Russia to the centre of the continent, offering further connections to 62 African destinations via Addis Ababa and two regional hubs, Lomé (Togo) and Lilongwe (Malawi).

The presentation by Ashalyu Tadesse Mechesso, Director of Investment Promotion at the Ethiopian Investment Commission, focused on the country's extensive network of industrial and agricultural parks. Ethiopia has 23 public and private industrial parks (e.g. Bole Lemi, Hawassa, Mekelle, etc.) where major companies from China, Turkey, India and other countries have already localized their production. The Ethiopian authorities provide assistance in customs procedures, a favourable tax base for investors, one-stop-shop services and fast-track processing of documents.

Wobi Mengistu, Deputy Secretary General of the Ethiopian Chamber of Commerce, graphically demonstrated the structure of Ethiopia's imports, in which Russia has no place even in the top 10.

"Think about it!", Wobi Mengistu summed up his speech.

Concluding the forum, AFROCOM Chairman Igor Morozov and Executive Director Stanislav Mezentsev noted Ethiopia's extremely high readiness and interest in accepting Russian investors. In addition to localization and expansion of production, Ethiopia is an excellent springboard to enter the markets of East Africa, one of the fastest growing regions in the world.

A recent working visit of Stanislav Mezentsev to Ethiopia showed that in addition to already existing systems of business support, the African country is ready to provide the most favorable investment conditions for regional small and medium Russian businesses willing to localize production on Ethiopian territory.

The AFROCOM business mission, which will start on February 20, will provide participants with the most detailed information on investment opportunities in Ethiopia. Read about how to participate in the business mission in upcoming AFROCOM materials.
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