Ethiopia shifting economic partnership from West to East
Trade privileges from Europe’s Everything But Arms (EBA) and America’s African Growth Opportunity Act (AGOA) are not stopping Ethiopia from shifting its historic economic partnership with the West to the East, a report reveals.
According to the Ethiopian Macroeconomic Report 2010, released by Access Capital Services Share Company over the weekend, the fast-growing eastern countries mainly Middle East, India and China (MICs) have recently become major sources of Ethiopia’s import and foreign direct investment.
Even though the West, a historic economic partner of Ethiopia, is now able to retain its dominant role in exports and tourism, ultimately, MICs will takeover and become major importers of Ethiopian commodities, the report projected.
“There will remain considerable economic and business links with the “West” on account of long-standing and historical trading links. Especially with European countries and on account of relatively new factors such as the African Growth Opportunity Act (AGOA) trade privileges in the US and the Everything But Arms (EBA) trade privileges in Europe,” the report highlighted.
“The growing inter-connectedness with the these countries will, in our view, be an indisputably positive force for growth and development in Ethiopia, especially if economic policies continue to provide increasing space for the expansion of the domestic private sector,” the report noted.
“There is a huge pool of investable funds in the MICs that includes multi-billion dollar sovereign wealth funds, large state-affiliated export promotion banks, and large privately-owned and globally active companies.”
The report also stated that linkages with African countries have stayed broadly flat or declined over the past decade. At present, exports to African countries comprise 17 percent of Ethiopia’s total exports while imports from African countries make up just 6 percent of total imports.
Access Capital Services S.C. started operations in June 2007. According to the information obtained from its official website, the company aims to support economic growth in Ethiopia by helping dynamic Ethiopian businesses raise funds and widening the opportunities for investors.