EU Companies Frustrated by Difficult Business Climate in Ethiopia

Addis Ababa, June 12, 2011 - Representatives of the European Union (EU) member states companies operating here in Ethiopia said that there are various hurdles that make doing business in Ethiopia difficult, but they said that they saw huge business opportunities in the country, according to the Ethiopian Reporter. The representatives made their statements while presenting their experiences of doing business in the country at the launching of the EU Business Community Forum in Ethiopia last week at the Sheraton Addis. About 41 percent of respondents from some 68 EU companies operating here said that “they find it difficult to do business in Ethiopia” while some 17 percent of them said that they have, to the contrary, found it convenient, according to Henrik B. Hansen, Business and Development Director of SVEA, a Nordic company which operates here and circulated  the queries to the respondents. The rest were simply neutral, Hansen told The Reporter. Hansen said that frequently changing laws, different interpretations of the same laws, bribery, poor road, telephone and IT infrastructures were among the major hurdles to doing business in the country reported by the 68 companies. A presentation by an EU Delegation officer, Christoph Wanger, pointed out that there are both challenges and opportunities for EU companies operating in Ethiopia. The presentation indicated that strong state investment in infrastructure, high growth rate, [human capital] including the diaspora, availability of  basic  resources for business and investment, trade access to various markets including AGOA and EBA, Government’s priority areas with [attractive] incentive schemes account for business and investment opportunities in Ethiopia. On the other hand, the presentation noted transaction costs, macroeconomic instability, finance and foreign exchange availability, uneven playing field for competition and lack of predictability when it comes to laws and regulations as the major business and investment challenges in the country. While acknowledging that “there are some rooms for clarification” for some of the complaints raised by the representatives of the EU business community in Ethiopia, State Minister for Industry Tadesse Haile said that his government will use the complaints raised as an input for future policy making.