Prime Minister Hailemariam Desalegn held discussions with hundreds of industry sector investors and businessmen and women in Addis Ababa on Wednesday (October 24th). Also present were representatives of international development partners and trade attachés from investment source countries. In all about eight hundred participants were present to hear the Prime Minister underline that the government was committed to support developmental investors and bring the nation up to middle income status in the next decade. During the discussion, investors raised problems related to transparency in public services, collateral for bank loans, problems with customs regulations and the newly introduced multimodal transport system. They also raised industry specific problems, relating especially to leather and leather products, textile, flower and horticulture investments.

Responding to queries, the Prime Minister emphasized that the government had accorded special attention to the development of the industrial sector. He said the private sector was the back bone of the economy and the driving force for the nation’s development endeavors to achieve middle income status. He acknowledged that there were problems in the provision of land, in transport, logistics, port services, tax and customs services and power supplies. Equally, he said, the government knew that there were some investors who wished to amass wealth through short cuts or illegal means rather than legally and in support of development. He said that the present administration would, as in the past, continue supporting developmental investors. He stressed there would be no policy change in that respect.

With regard to the questions on tax and on customs, he told the meeting that a separate forum would be held with stakeholders to sort out problems and identify possible solutions. In relation to problems identified within the bureaucracy, he said that apart from what the government is doing, the involvement of the investors would be valuable to bring about necessary attitudinal changes. Responding to a question about the multi-modal transport system, Prime Minister Hailemariam said that as such systems had proven effective in many places, it was clear the problem was not with the system itself. It was rather the result of poor preparation for the adoption of the system. A study was now underway to solve the problem. Again, a separate discussion would be held with stakeholders, he said, to identify possible solutions.

The Prime Minister told the forum that the problems in the tax system would be resolved with the coming into effect of newly adopted regulations by the Council of Ministers. He said the new regulations would allow the merging of taxes of a similar tax base and nature. This would ease problems of procedural overlap. On the availability of bank loans, he said the policy issues involved had been resolved. With the government’s commitment to the manufacturing sector, 70% loans were available to investors at the start up of business, providing the investors came up with 30% of the project finance.

On the provision of land he said a structural reform was underway and the provision of land would be handled by the Ethiopian Investment Agency. The establishment of industrial zones would also be pursued with much vigor to provide a long-term solution. He reassured the meeting that the establishment of industrial zones would be made free of any problems relating to quality of service for power, water, or telecommunications. He added there was no power shortage at the moment, and power cuts were due to poor infrastructure, some of which dated back nearly a century. The government, he said, is conducting a study for the replacement of infrastructure to meet current and future demands of the sector.

In conclusion, the Prime Minister announced that the government would hold bi-annual meetings with investors in order to sort out problems and identify solutions through consultations. He assured investors and businessmen and women that all ministries would have their doors open to any and all queries from them.
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* Originally published on A Week in the Horn – Oct. 25, 2012 issue, titled “Prime Minister Hailemariam holds discussions with industry sector investors”. Items from A Week in the Horn are re-published here with a permission to do so.

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