A senior essay submitted to the department of economics in pa rtial fulfillment of the requirement for degree. Ethiopia once the byword for famine in the region is garnering attention from foreign investors. Fdi triggers technology spillovers, assists human capital formation, contributes to international trade integration and helps to create a more competitive business environment. Foreign direct investment and knowledge diffusion in poor. Foreign direct investment and its relationship with growth and export in ethiopia ma thesis. The fdi are targeted due to the fact that they are a longterm engagement with the investment. Foreign direct investment refers to direct investment. During200203 and 200304, again there was fall in flow of foreign direct investment which was due to the cast of global recession on the indian economy. Foreign direct investment and knowledge diffusion in poor locations.
In the united nations conference on trade and developments unctad world investment report 2014, foreign direct investment fdi projects globally could increase to 1. Foreign direct investment is one of the key economic features of the modern globalized world. Foreign direct investment fdi in ethiopia investing. Foreign direct investment fdi development between the. Definitions and sources of data the ethiopia investment code defines a foreign investor as a physical or juridical person of foreign nationality which has invested imported capital investment proclamation no. National policies and the international investment.
Water implications of foreign direct investment in ethiopia s agricultural sector. Pdf determinants of foreign direct investment in ethiopia. Highlights of investment opportunities and conditions in. Foreign investment in ethiopia slumps after business. Ethiopia, like many african countries, took some steps towards liberalising trade and the macroeconomic regime as well as introducing some measures aimed at improving the fdi regulatory framework. Most investment have taken the form of acquisition of existing assets rather than investment. The determinants of fdi include any host countrys situations that affect the inflow of fdi, like market size, the economic growth rate, real growth domestic product, infrastructure, natural resource, the. The lasting interest implies the existence of a longterm relationship between the direct.
It in particular examines how fdi affects gdp growth, both directly and also conditioning on trade liberalization that ethiopia. Pdf foreign direct investment in the agricultural sector. Foreign direct investment and economic development in. Privilege is given to full repatriate profits, dividends, principal and interest payments on external loan, etc. The negative impact of foreign direct investment on peoples.
The survey covered various aspects of the foreign direct investment. Ethiopia, a country with a large amount of untapped land, abundant natural resources and cheap labor coupled with other regulatory incentives, has succeeded in attracting foreign capital investment, particularly, in the agricultural sector. Privilege to full repatriation of profits, dividends, principal and interest payments on external loan, etc. This paper attempts to study the nature and determinants of foreign direct investment. Challenges, opportunities and policy options for effective use to stimulate industrialization. Public actors could therefore be effective in stimulating private investment. The scope of this paper is limited to the determinants of fore ign direct investment in ethiopia. Foreign direct investment 253 foreign direct investment. It in particular examines how fdi affects gdp growth, both directly and also conditioning on trade liberalization that ethiopia adopted in early 1990s. Challenges and prospects in solid minerals development in nigeria sunday iduh korea development institute school of. Pdf foreign direct investment and its relationship with.
Foreign direct investment fdi is an integral part of an open and effective international economic system and a major catalyst to development. Ethiopia has been among africas most impressive growth performers over the. Ethiopia investment policies and incentives and opportunities. Chinese foreign direct investment fdi into africa is on the rise and ethiopia is at the forefront of this trend. Almost half of the flows from the east african region were absorbed by ethiopia.
Each asian firm reported that their primary reason for investing in ethiopia was to secure their leather supply. The study will focus on the time period between 19812007. While gdp growth has been strong, foreign direct investment fdi flows have. This paper measures the impact of foreign direct investment fdi on economic growth in ethiopia based on annual time series data over the period 1974 to 2011.
Pdf water implications of foreign direct investment in. The role of foreign investment in ethiopias leather value. Pdf on apr 1, 2017, mulu gebreeyesus and others published foreign direct investment in ethiopia. It is obvious that our country has engaged in farmland deal with foreign agricultural investors. A trend, determinant and impact analyses for the masters degree in this university, is my ownpiece of original research work.
Strategic and tactical issues of ethiopias foreign policy. The determinants of foreign direct investment fdi in ethiopia a time series analysis. Recognising that fdi, notwithstanding the type, can contribute to economic growth and. Therefore, this study is done with the main objective.
National policies and the international investment architecture matter for attracting fdi to a larger number of developing countries and for reap ing the full benefits. Chinese foreign direct investment fdi into africa is on the rise and ethiopia is. Nowadays, the attractivity of foreign direct investments fdi is a core issue in the strategy of development worldwide, especially in developing countries. A census of formal firms in the ethiopian leather industry reveals that the change in government policy was successful in attracting foreign direct investment. Ethiopia, because of its accelerated economic growth, relative political stability and pivotal role within the au, is a much respected and preferred country for foreign direct investment. Foreign direct investment in ethiopia dropped by a fifth in the first half of the countrys fiscal year after violent antigovernment protests in which foreignowned businesses were targeted. What is foreign direct investment fdi according to the imf and oecd definitions, direct investment reflects the aim of obtaining a lasting interest by a resident entity of one economy direct investor in an enterprise that is resident in another economy the direct investment. Top 5 opportunities for investment in ethiopia part ii. Impact of foreign direct investment on economic growth of. Foreign direct investment and economic development in ethiopia. In part i of top 5 opportunities for investment in ethiopia, i recommended financial services, telecoms. Foreign direct investment in the agricultural sector in ethiopia. Role of foreign direct investment fdi in the growth of. Does chinese inward foreign direct investment improve the.
In conflict prone contexts, foreign investors, especially whose actions while entering a given country were not subject to checks and balances, may undermine political stability and fuel social unrest. Ethiopia is one of the favored destinations of the trend of chinese ofdi, which also. On request of the government, the world bank surveyed 69 chinese enterprises doing business in ethiopia with a 95question survey in mayjune 2012. In the united nations conference on trade and developments unctad world investment report 2014, foreign direct investment. Determinants and impediments of foreign direct investment. Pdf an assessment of challenges and prospects of foreign. Indeed, in the modern day, foreign direct investment fdi has often been. Fdi inflows to the country have accelerated in recent years. Ethiopias experience in reconciling foreign direct investment with. Determinants of foreign direct investment in ethiopia. Yet, the benefits of fdi do not accrue automatically and evenly across countries, sectors and local communities. The government is leasing tenth of thousands of hectors of farmland to foreign agricultural firms. Depending on the level of accountability in the recipient country, foreign direct investment.
1492 753 269 531 1504 1539 1423 1498 1171 1529 26 1225 1421 348 1224 1095 1016 372 742 332 101 559 1229 1102 679 1282 589 216 468 576