This year marks the 50th anniversary of the establishment of diplomatic relations between Ethiopia and Canada. Although Canada is well-known to Ethiopians, events were held in Addis Ababa and Ottawa to celebrate formal diplomatic ties.
Ethiopia has one of the fastest-growing economies in the world, having managed to maintain an average 11 percent GDP growth rate for more than a decade. The country just concluded its first cycle of a five-year economic plan, known as the growth and transformation plan (GTP I), and has just embarked upon GTP II, which will focus on industrialization.
As infrastructure expansion is one of the central pillars of the GTP, road and railway construction and the construction of hydro, wind and geothermal projects are well under way. The construction of the Grand Ethiopian Renaissance Dam, with a power-generating capacity of 6,000MW, is progressing on schedule.
Current data on trade flows and investment relations between Canada and Ethiopia are modest, but there is tremendous potential for growth. Recent years have shown enhanced trade and investment interest between Ethiopia and Canada. Last year alone, we managed to have an Ethiopian trade and investment delegation come to Canada and a Canadian business mission visit Ethiopia.
In 2014, two-way trade volume between the countries totalled $161 million, with $137 million in Canadian exports to Ethiopia and $24.5 million in Ethiopian exports to Canada. The data for 2013 show that Canadian exports were $21 million, while Ethiopian exports to Canada were $17 million. Unusually high amounts of Canadian exports, as seen in 2014, are attributed to the high-value nature of purchases such as aircraft. Ethiopian Airlines imports the Q400 aircraft from Bombardier, a company that has set up a regional maintenance facility for the Q400 in Addis Ababa. Apart from Canadian aircraft, exports to Ethiopia are mainly machinery, spare parts and chemicals. Canada’s imports from Ethiopia consist mainly of agri-food products, such as coffee, spices, oilseeds, leather and leather products, textiles and cut flowers.
In January 2010, Ethiopia and Canada concluded an air services agreement that led to the commencement of Ethiopian Airlines flights from Addis Ababa to Toronto in July 2012. Currently, there are three flights per week connecting Toronto to Addis Ababa and, through Addis Ababa, to 49 other destinations in Africa.
A memorandum of understanding, signed between Canada and Ethiopia in 2003, allows Ethiopian exports of textile and apparel goods tariff-free access to the Canadian market. Through this provision, we would like to see more Ethiopian-made textiles and garments exported to the Canadian market. And it’s happening to some extent: Ethiopia is emerging as a favoured destination for apparel makers. Canadian fashion and garment companies could set up manufacturing plants to make use of the low cost of labour and power for manufacturing.
Canadian investment in Ethiopia is mainly in the extractive sector. Nearly 15 Canadian companies are licensed and are exploring various minerals, including potash and base metals, and we are now working closely with Canada to build capacity for our extractive sector.
Ethiopia offers attractive investment opportunities for Canadian companies. The Ethiopian Investment Commission provides a one-stop-shopping service for investors and Ethiopia is signatory to the Multilateral Investment Guarantee Agency (MIGA) and the World Intellectual Property Organization (WIPO). The signing of a foreign investment protection agreement between Ethiopia and Canada is under discussion.
We would like to see more Canadian investors taking part in the industrialization of the country during the GTP II period. There are industrial zones waiting for foreign investors and plenty of business opportunities for Canadian companies interested in the massive infrastructure projects under way in Ethiopia. GTP II will see construction of more power generation projects, roads and railways.
Ethiopia’s recent development and fast-paced growth are now fully acknowledged by international financial institutions and the media. I would like to seize this opportunity to invite the Canadian media to visit Ethiopia and share their findings with the Canadian business community and the public at large.
Birtukan Ayano Dadi is ambassador of Ethiopia. Reach her at (613) 565-6637 ext.28 or info@ethioembassycanada.org.
