Now is the Perfect Time to Expand Your Business to Ethiopia – Here’s Why

When we think of Ethiopia, it’s easy to think of its world-renowned coffee, rock-hewn churches and remarkably diverse landscape, history, and culture. However, the country has strode forward, taking giant leaps to excel economically. Post-2000, the Ethiopian economy has grown at a stable rate, and it’s now one of the most promising regions to expand your business.

Given that the country is the second most populous in Africa, Ethiopia has a planned economy. It’s one of the fastest-growing economies among the International Monetary Fund (IMF) countries. The country enjoys a decent employment rate and offers new opportunities for new businesses.

This post will look at some of the significant factors that make Ethiopia a promising region for expanding your business.

More importantly, finding a translation agency to translate your Amharic documents is vital because you will need them once you settle your business in Ethiopia.

1. Ethiopian Export Economy is Rising

Right now, the Ethiopian economy is ranked fourth in sub-Saharan Africa. But, it will soon take over Angola to become the third-largest by 2025. It indicates how well Ethiopia has developed its production sector. A rising economy is also a sign of a higher employment rate.

In the last ten years, Ethiopia’s annual average GDP grew at a stable rate of 7 to 8 per cent. As a result, it became a centre for top companies like GlaxoSmithKline, Diageo, Tesco, Unilever, etc.

Therefore, the current stats offer a favourable environment for businesses to touch the African market.

2. There is Immense Potential Growth

As the country’s economy steadily grows, the expected potential growth is enormous. Several factors support such development. For instance, Ethiopia has a vast agricultural landscape. In addition, it continues to excel in hydroelectric power generation and the fisheries industry.

Some of these supporting elements help maintain the basic lifestyles of the people whilst also supporting new businesses. For instance, more power generation means new industrial setups and lower tariffs.

Secondly, Ethiopia has abundant human resources paired with cheap labour. So, it’s ideal for businesses looking to expand in this region.

Moreover, Ethiopia has a consumer market of more than 90 million people. So, regardless of the business type, you are most likely to appeal to a decent portion of the population, which is often enough to start your business operations in a new region.

3. Ethiopia Welcomes Foreign Investors

Previously, Ethiopian businesses ran primarily on local investments. For example, the banking, insurance, micro-credit, and telecommunication sectors were all under local investors’ influence. However, recent investments from China, India, Turkey, and the EU mean a more stable business environment.

Generally, these investments are focused on the textile, agriculture, leather, leather processing, infrastructure, and construction sector. Ultimately, these investments will form the base for a more profitable business environment in Ethiopia in the next few years.

4. Trade Agreements

Now, Ethiopia is a part of the African Continental Free Trade Agreement. So Ethiopia is a part of a much larger and unified African market. More importantly, it’s a quota-free inclusion so Ethiopia can compete with other African countries in the same market.

Thanks to the Everything But Arms initiative, it also has free market access to the European Union. So, EU countries can import duty-free goods from Ethiopia. It means more recognition of Ethiopian products in Europe which opens more business chances for the country.

Moreover, Ethiopia is a signatory of the Abuja Treaty. This treaty aims to build an African Economy Community with the collaboration of 54 countries.

5. Abundant Fuel Resources

Ethiopia has a huge potential for oil and gas drilling because it is located in the sedimentary regions. Ten years ago, the oil and gas sector generated a whopping $2.5 billion revenue, and these numbers have grown ever since.

Moreover, there are four trillion cubic feet of confirmed gas reserves in Ethiopia. Therefore, it opens new opportunities for oil and gas drilling businesses from different parts of the world.
At the same time, the new development projects in the country can help uplift the general lifestyle of the local population.

6. Tourism

Ethiopia has ten UNESCO-recognised heritage sites, which are major tourist attractions. Therefore, the country’s tourism is one of the distinguishing aspects of its growing economy. As business owners, more tourism means a diverse group of customers.

So, while you will optimise your business for local customers, better tourism opportunities in Ethiopia will also provide more foreign customers.

You can also become a part of the Ethiopian tourism promotion sector by contributing to the construction and infrastructure in the country.

Some Challenges for Businesses in Ethiopia

Business expansion in Ethiopia is a promising yet challenging affair, especially if unfamiliar with the local language. Therefore, you will need the expertise of an Amharic translation service provider to yield more personalised content for the locals before setting up your office.

Diverse Consumer-base

Language is not the only barrier in Ethiopia. The general working environment is informal. It means that you will be dealing with locals from different cultural backgrounds who speak other languages and follow different customs and traditions.

Challenging Demands

Not only this, but some customers aren’t always afraid to hold back. They speak directly and are pretty determined about their traditions and cultural values. So, it presents some challenges for businesses to market their products according to customer demands.

Consequently, if you utilise the assistance of an expert translation agency like Africa Ready, you can take advantage of working with an interpreter or certified Amharic translator to market your products and services in the region more effectively.

Infrastructure

The Ethiopian economy is still developing, so you must make peace with the infrastructure in the region. The country’s regulations also take time to go into effect. So, clearing imports can take more than two months.

Conclusion

Ethiopia is worth exploring because it’s no longer just a famine-struck, underdeveloped African region. With foreign investments coming in, Ethiopia will be a major economy in the continent in the next few years. So, if there’s any better time to expand your business in Ethiopia, it’s now.