A Study of Problems of Foreign Investors in Ethiopia in Floriculture Sector
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Date
2007-03
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Publisher
A.A.U
Abstract
The economy of Ethiopia is based on agriculture, which accounts for half
of gross domestic product (GOP), 60% of exports, and 80% of total
employment. Dependent on a few varieties of crops like coffee and oil
seeds for its foreign exchange earnings and reliant on imported oil,
Ethiopia lacks sufficient foreign exchange. Now days, business is
changing fast in Ethiopia. About 10 years ago, there were virtually no
foreign private companies in the country. Today, foreign investors are
embraced, a gesture of the goodwill and openness of the current profuseness
regime. Attracting foreign direct investment (FDI) is a major
priority of the government. Ethiopia's comparative advantage lies
primarily in its abundant, low-cost, disciplined and trainable labor force,
the size of its domestic market, and the numerous river basins affording
great potential for irrigation and hydropower generation. Ethiopia's
climate and proximity to the Middle East, Europe and other markets
provide opportunities for investment in cut flowers and high-value fruit
and vegetable production. A number of cut flower and horticultural
enterprises have started exporting successfully over the past few years.
This study will see the prospects Ethiopia has to offer foreign investors
on the floriculture field but will mainly focus on the problems, such as
the quality of the infrastructure, especially means of transportation,
electricity and telephone services as well as cumbersome administrative
procedures. More emphasis is given on the assessment of the
problems, which if not timely solved might hinder the country from
being competitive on the global market of the sector which is dominated
by Netherlands, Colombia and Ecuador as well as Kenya Zimbabwe and
Zambia the African forerunners, which have realized tremendous
achievements in the sector lately.
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Keywords
Floriculture Sector, Foreign Investors