An Analysis of Foreign Direct Investment Pattern and its Implications in Ethiopia
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Date
2001-07
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A.A.U
Abstract
This study investigates the sect oral and geographical distribution of the approved
foreign direct investment (FDI) in Ethiopia between 1992 - 2000. It is observed that,
sect orally, FDI is mainly concentrated in consumer goods manufacturing and
processing. Agriculture, real estates, construction, and hotels and tourism have also
claimed substantial proportions of the approved FDI, in that order. Fishing, and mining
and quarrying attracted the least amount of FDI. The relative shares of health and
education were also low. The present Investment Code is argued to have a strong
influence in causing this sect oral pattern as the Code maintains such entry restrictions
as high minimum capital requirements and a list of several areas reserved for domestic
investors.
Regional considerations show that FDI is predominantly situated in Addis Ababa. The
Oromia, Asmara and Afar regional states have also taken sizable proportions of the
approved FDI. No foreign private company expressed its interests to invest in
Benishangul-Gumuz and Somali regional states during the period under reference. The
study argues that the regional distributions of FDI are largely determined by the level of
economic development of the regions (in relative terms) such that the better the
availability of infrastructural facilities the larger the flow of FDI, other things being
constant.
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Keywords
Direct Investment, Implications in Ethiopia