An Analysis Of Foreign Direct Investment Pattern And Its Implications In Ethiopia

This study investigates the sect oral and geographical distribution of the approvedrnforeign direct investment (FDI) in Ethiopia between 1992 - 2000. It is observed that,rnsect orally, FDI is mainly concentrated in consumer goods manufacturing andrnprocessing. Agriculture, real estates, construction, and hotels and tourism have alsornclaimed substantial proportions of the approved FDI, in that order. Fishing, and miningrnand quarrying attracted the least amount of FDI. The relative shares of health andrneducation were also low. The present Investment Code is argued to have a strongrninfluence in causing this sect oral pattern as the Code maintains such entry restrictionsrnas high minimum capital requirements and a list of several areas reserved for domesticrninvestors.rnRegional considerations show that FDI is predominantly situated in Addis Ababa. ThernOromia, Asmara and Afar regional states have also taken sizable proportions of thernapproved FDI. No foreign private company expressed its interests to invest inrnBenishangul-Gumuz and Somali regional states during the period under reference. Thernstudy argues that the regional distributions of FDI are largely determined by the level ofrneconomic development of the regions (in relative terms) such that the better thernavailability of infrastructural facilities the larger the flow of FDI, other things beingrnconstant.

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