Any Nigerian who listened to Ethiopian Prime Minister Abiy Ahmed in Davos must have looked on with envy as the 42-year-old spearheading a raft of investment-friendly reforms in East Africa’s fastest growing economy sold his nation to an elite gathering of business leaders and politicians at this year’s World Economic Forum (WEF) in Switzerland.
Ahmed’s speech at Davos is something you would have expected from the leader of Africa’s largest economy, President Muhammadu Buhari, only that the 76-year-old, who seeks a second term at next month’s elections, wasn’t even present at the gathering for the second year running.
Critics say Buhari’s distaste for private capital may be why he has not seen the need to be a part of the Davos gathering. Buhari’s absence does little favours for a country badly in need of foreign investment, but is nowhere near attracting the required amount.
A 2019 report by the United Nations Conference Trade and Development showed that while Nigeria only managed $2.2 billion in Foreign Direct Investment (FDI) in 2018, Ethiopia attracted $3.1 billion. That equates to an FDI per head of $29.5 in Ethiopia, which harbours some 105 million people. For Nigeria, FDI per head is less than half at $11.
Ethiopia has suddenly become an investor’s delight on the back of a rapid set of reforms being pursued by Prime Minister Abiy who is bringing down age-long barriers to investment in a market seen as rival to Nigeria because of the size of its population.
HERE’S THE FULL TEXT OF ABIY’S SPEECH AT DAVOS
Thank you for the warm welcome in this cold winter. I am honoured to be with you for the first time in Davos and most grateful for the opportunity to share Ethiopia’s new vision.
Ethiopia is today among the fastest growing economies in the world, consistently averaging over 9 percent growth in the last decade.
Ethiopia’s GDP has multiplied 10 folds in 25 years, poverty has been halved and educational enrolment has markedly increased.
Significant investment in infrastructure has contributed to growth, and also attracted foreign direct investment, making Ethiopia one of the leading foreign direct investment destinations in Africa.
Our tremendous success has reflected the commitment of our government and our people to development and progress, however our challenges remain formidable.
To enforce an upward trajectory and achieve even more rapid and sustainable economic growth, Ethiopia has embarked on comprehensive reforms process since last April which cuts across politics, economics and society.
We aim to establish a bulk of a cycle between these elements and among our partners to enable us to meet our challenges in a mutually profitable manner.
Ladies and Gentlemen, allow me to explain this path of reform.
Our reform is deeply rooted in the philosophy of Mardema an apori word for coming together or synergy.
Mardema is a historic reform to organic change and building on the gains of the past, while reminding us of our rich heritage.
It also reflects on modern realities and synergy in politics, economics, technology and society.
Ethiopia is indeed undergoing a period of political and economic renaissance.
The Mardema reform is people-centered and based on three interdependent pillars.
The first pillar is a vibrant democracy; the second one is economy vitality while the third one is regional integration and openness to the world.
Today, we meet at a time of great opportunity for Ethiopia and for you.
In this spirit of partnership, please allow me briefly address each of these aspects.
On the political reforms, we are working tirelessly to fulfil the constitutional promise of building a democratic political order based on our first pillar a vibrant democracy.
Guided by this principle, we have acted quickly and decisively in the past nine months, we have released all political prisoners in their thousands.
We have also invited individuals and groups based abroad to return home and join us in the spirit of nationalism.
We have restored licenses to independent media, issued and amnesty law and repealed restrictive laws of the past. We will also revive civil society law very soon.
Without these reforms, we believe it’s not possible to sustain growth, attract investment and allow all Ethiopians to benefit from the growth dividends and persuading investors to invest in our economy.
We see democracy and development as interlinked we have acted decisively on this understanding.
The second pillar of our reform is economic vitality. We are determined to bring Ethiopia firmly to the centre of international market. To do so, we will leverage the collective power of our people especially women and youth. We will also build the private sector to drive more inclusive and socially sustainable growth.
We cannot hope to progress as a nation and as an economy if we disqualify half of our people from full and equal participation.
Women are now occupying key government positions including the minister of defence, minister of trade, minister of transport and newly established minister of peace.
We have achieved gender equality in our government, we now have the first woman as the president of federal Supreme Court and recently our parliament has elected the first woman head of state in modern Ethiopia.
This is important progress but it’s not enough. Ethiopia is a large market of over 100 million people of which 60 million people are under the age of 24. With half a million school leavers annually, our core objective is to sustain fast pace economic growth and to create more and better jobs.
We must create the condition to enable democratic dividend and to harness the potential of our young and energetic population.
To do so, we have to invest in the aspirations of our youths by improving educational standard and create fresh opportunities through careful planning and strategic repositioning.
This requires an ignitable potential of the private sector.
Here are four steps that we are taking to make this not mere rhetoric but reality.
First, we will make it easier for small and medium enterprises to grow and flourish, since they are the engine room of our economy.
We are reprioritizing access to credit for SMEs and since, two-third of the SMEs now report having improved access to finance.
Secondly, we will ease mainstream regulations needed to start a business and provide a better policy environment.
We will make it easier to do business for everyone who wishes to invest in our country.
Ethiopia is undergoing significant institutional reforms and is reviewing its investment courts, commercial courts, and other business regulations to enhance the ease of doing business in
Ethiopia and increase our global competitiveness.
Thirdly, we will make the private sector an integral part of our economy, as they should be.
Ethiopia is committed to reforming its state owned enterprises and crowd in more private capital.
We are committed to opening up the economy to international investors in telecoms, logistics, energy, aviation, railways and industrial parks.
This has the added benefit of creating the space to reallocate government expenditure to social services.
We are confident that international capital and expertise will deliver significant value for Ethiopians and contribute to our development agenda.
We will continue to foster public private partnerships, as we see this as more than merely a business proposition and a deal to be struck. We see it as a way to build long term partnership aimed at triggering faster economic growth and profit.
At the same time, we will ensure our citizens realize our full potential and live a prosperous, healthy and safe life.
We therefore look to the next generation of public private partnerships to be more balanced in delivering growth and delivering a fresh way to contemplate the relationship between business and government and offering the formula for growth and inclusiveness.
The third and final pillar of our renaissance is regional integration and openness to the world.
Regional integration and trade will be crucial to the future of our continent, allowing us to grow beyond primary commodities and accelerate our development.
Addis-Ababa is the seat of the African Union and so must lead by example.
Our determination explains our active engagement in discussions on the Africa continental free trade area and our sense of urgency to finalize Ethiopians ascension to the world trade organizations.
History has demonstrated time and again that neighbours with intimate robust and diverse trade in economic relations are unlikely to resort to conflict. That is why we believe integration must be viewed not just as an economic project but also as crucial to securing peace and security in the whole of Africa.
Ethiopia believes that an Africa at peace with itself can counteract the chaotic push of mass migration.
As such, Ethiopia aims to increase the influence of smart capital into the African continent.
There is a strong case to be made for investing in our continent.
Even the most conservative asset allocation of an investment portfolio should currently consider this option.
If just 2 percent of the $14 trillion US dollars in OECD pension assets were invested into Africa over the coming five years, it would exceed the total foreign direct investment that we have seen in the last five years by more than three times.
For investors considering return, this offers higher than average rewards and diversification of risk. For Ethiopia it would catalyze transformation. To realize this great opportunities, we appreciate the fundamental need to de-risk our politics and economy which would reduce the premium by prospective investors.
Part of that process is to build trust, confidence and lead by example.
I believe that our record over the last year shows this to be so.
Dear friends, let me conclude that Ethiopia has embraced a great vision and embarked on bold reforms, improving the political environment and business climate is our priority.
Building an open society and a vibrant economy is our shared aspiration and our proposition to you but we must all act fast.
I will recall over the last nine months, should elucidate our resolve this is an agenda for action and a blueprint for sustainable goals.
Looking at what we have accomplished in less than a year, I am optimistic and excited about the opportunities that are ahead.
Ethiopians are born runners and we excel in marathons. Take it as a signal of our intention and level of commitment and stamina.
Now is our time. Rating agencies forecast that growth will average 8 percent over 2018- 2021, making Ethiopia the fasting growing of sovereign countries.
Come and see what we have to offer and invest in our potential.
Whether you are an entrepreneur, a CEO, an industrialist or just a lover of nature and beauty, Ethiopia has something for you.
LOLADE AKINMURELE
