| MARCH 2019

KARATENG MAGAZINE OF THE AFRICAN CHAMBER OF COMMERCE IN CHINA

GOING ONLINE: CHINA’S PLANS

TO EXPORT ITS E-COMMERCE
CULTURE TO AFRICA (13)

KARIBU: HOW KENYA’S SAFARIS

ARE DRIVING SUSTAINABLE
GROWTH (21)

INVESTOR REPORT: ETHIOPIA (30)

Issue 1 | March 2019
 AfCham Upcoming Events
March 2019

- Networking Events for investment in Ghana

April 2019

- Networking Events for investment in Tanzania

- Inauguration of the AfCham African Cultural Center

May 2019

- Africa Day Gala Dinner 2019 (24th May)

June 2019

- Nairobi Global Forum on the investment in East Africa within the

Belt and Road Initiative
- Networking events for investment in Madagascar

Trade Shows and Exhibitions - China

For more information visit: http://www.winbtb.com/en/service

March 2019

(22nd-24th) China North International Bicycle&E-Bike Exhibition 2019 - Tianjin

April 2019

(19th-22nd) China International Ceramic and Bathroom Products Exhibition 2019 - Foshan,
Guangdong

May 2019

(9th-12th) The 2nd China International Food Expo 2019 - Huaian, Jiangsu
(9th-11th) China International Sourcing Fair on Lamps Lanterns and Accessories&LED Illumination
Exhibition 2019 - Ningbo, Zhejiang

June 2019

(18th-20th) The 19th Chemical Pharmaceutical Ingredient (CPHI) China Exhibition - Shanghai
 | MARCH 2019

Content
AfCham’s work Features
11 AfCham Youth: AYEP 32 Investor Report: Ethiopia
12 Corporate Social Responsibility program A comprehensive introduction to
19 China’s First African Trade Hub with AfCham Africa’s visionary

Comment Investment Opportunity

6 Opening Speech by the Chairman at the Global 42 Investment Incentives for Tourism
Development Summit for Africa (Sept 2018) Companies in Ethiopia

8 Planting The Seeds: Recent policy progress in addressing

the trade imbalance between Kenya and China is necessary but Tourism
by no means sufficient
26 Travel Ethiopia: Why the East
African country needs to be your next
13 Going Online: China’s Plans To Export Its E-Commerce travel destination
Culture To Africa
29 AfCham exclusive Northern and
21 Karibu: How Kenya’s safaris are driving sustainable Southern Ethiopia tour
growth

30 6Ps: A Different Approach

flickr.com

africa.cgtn.com
3
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4
 | MARCH 2019

Letter from the Chairman

I am glad this publication is here now and serving as a

major information portal for individuals, companies and
organizations planning to venture into Africa as well as
those already operating in Africa. This should have been
there from the early days of AFCHAM but better late than
never, they say. All publications that focus on Africa, be
they about business, politics, culture, etc., face the uphill
task of reconstructing some of the damage misinformation
has done to Africa for over a century. May Karateng excel
in that task.

D. Nkwetato Tamonkia,
AfCham Chairman

5
THE GLOBAL DEVELOPMENT SUMMIT FOR AFRICA
SEPTEMBER 6TH AND 7TH 2018, BEIJING, PRC.

Opening Speech by the Chairman, AfCham

D. Nkwetato Tamonkia

Your excellencies, senior representatives of embassies and governments,

Industry leaders from China and Africa,
Distinguished personalities,
Partners, members, friends and well wishers of The African Chamber of
Commerce,
Ladies and gentlemen,

On behalf of The Board of Trustees of The African Chamber of Commerce that I

hereby represent, it is with great honor that I welcome you to the second edition
of The Global Development Summit For Africa here in Beijing.

Two years ago, in this same hotel, we gathered in our first Global Development
Summit For Africa, to discuss the growth of Africa and the abundant opportunities
that come with it. After that first summit, we went back to the drawing board, set
up teams, sent experts to the field in various industries in Africa for feasibility
studies; we expanded our network of partners and collaborators, we drew up
strategies and here we are at the second summit. This time around we believe
we are here to put pen to paper, cut deals and get into full action on the field
both here in China and in Africa, to ensure that investors here present find fertile
investments, government representatives here present find the right partners for
their developmental projects, sellers here present find buyers and buyers here
present find products. In this summit, let there be less talking and more action. A
famous African proverb says: “A roaring lion kills no game.” We cannot achieve
anything by simply talking about it.

If summits, conferences, forums, symposiums, meetings, seminars, workshops

and motivational speeches alone could develop a place, Africa would be the
most developed continent in the world by far. There isn’t a single week that goes
by without a gathering somewhere in the world discussing the development of
Africa. Yet Africa remains underdeveloped.

A flourishing multi-billion dollar industry has been built on organizing events about
various kinds of projects for Africa. Yet Africa remains underdeveloped. If NGOs
and aid packages could develop a place, Africa would be the most developed
region of the world by far.

These are all pointers to the fact that something is missing somewhere along the
line. Either the messengers are not delivering the right messages or the receivers
are not doing the right thing. We at The African Chamber of Commerce, are
trying to find the missing piece in the puzzle. So far, we think, the development
of the African continent looks like the case of a child, spoilt by too many gifts or a
beautiful girl spoilt by too many suitors. Our dream Africa is one in which Africans
take control of their own destiny. Our dream Africa is one that stands strong and
is able to play fairly at the global stage in all aspects. That kind of Africa is the
ultimate dream of all African youths.

6
 | MARCH 2019

When most people look at Africa they think natural resources under
the ground. However, Africa’s most important resources are not under
the ground. Resources like Africa being home to the fastest growing
middle class in the world and home to the youngest population in the
world now form the center of attention for those who genuinely want to
prepare Africa for a bright future. We, gathered at this summit, are the
chosen ones and it is a big honor for all of us. The decisions we make
today and the actions we take, shall define the lives of hundreds of
millions of people in Africa in decades to come. So, we, stakeholders
in Africa’s development should rethink our strategies. An old African
proverb reads: “Do not look where you fell, but where you slipped.” Let’s
not look at our mistakes, let’s look at what caused us to make those
mistakes. If we don’t, we shall make the same mistakes only to find
ourselves at more gatherings discussing the development of Africa.

The African Chamber of Commerce (AfCham) since its creation

has focused on identifying partners and collaborators who truly
understand Africa’s problems from the point of view of Africans. It has
not been easy to find such partners and collaborators because most
people understand Africa from a non-African perspective. Not every
successful venture around the world can be copied and pasted in Africa
to work. Many who criticize Africa do that from a safe distance. Through
AFCHAM many non-African companies, organizations and state
institutions have been able to see Africa from Africans’ perspective.
To me, that is the greatest thing our chamber has achieved so far.

AFCHAM has established the vision that while companies from

friendly countries like China seek to invest in Africa, there should
be reciprocal action. African companies should be encouraged
to invest in China. Many AFCHAM initiatives, in collaboration with
local government entities in China, friendly African embassies
in China and private stakeholders have been set up to make that
vision a reality. Many of our keynote speakers and panelists
will be elaborating on projects that are already on the move.

In that light, I would like to thank all our partners and collaborators,
especially, The Somali Government, The Ethiopian Embassy, The
Senegalese Embassy and all other embassies collaborating with
AFCHAM.

Many thanks to The Shenzhen Foreign Economic Trade

and Investment Development Association, Legadere
Sports, The Standard Chartered Bank Group, The Amani
Initiative, KAIOS Technology, Conway Incorporation and
all those who contributed in one way or the other to the
success of this event not forgetting our host NOVOTEL,
Beijing, always ready to welcome us.

I wish all of you a successful event, fruitful discussions,

meaningful deals and giant steps in the development of
Mama Africa.

Long live AFCHAM, Long live a prosperous Africa.

Thank you.

7
 Planting The Seeds
Recent policy progress in adressing the trade imbalance
between Kenya and China is necessary but by no means
sufficient

By Zesemaiat Debessai Corino

Amid political pressure to tackle Kenya’s vast trade deficit with

China, on November 9th (2018) the two governments signed a
Memorandum of Understanding (MoU) on agricultural standards for
Kenyan exports.

“After a week of delicate negotiations, formal sanitary and

phytosanitary agreements have been signed” the president’s chief
of staff, Nzioka Waita, said on Twitter.

Beijing also agreed to set up a special working group mandated

with negotiating the removal of tariffs for some of Kenya’s biggest
agricultural exports.

The deal is expected to formalise and simplify the certification

process Kenyan exports go through for food, plant and animal
safety, paving the way for exporters to reach the 1.3 billion strong
consumer market.

Trade with the Asian giant accounts for just over 17% of Kenya’s
overall trade with the world, making China the country’s biggest
trading partner.

According to the Kenya National Bureau of Statistics, in 2017 Kenya

imported $3.79 billion worth of mostly finished products and
exported a modest $97 million worth of goods to China; consisting
mostly of hides, skins, coffee, tea, titanium ores and plastics.

The announcement came days after Kenyan president Uhuru

Kenyatta’s speech at Shanghai’s first China International Import
Expo (CIIE). “It is important to correct the existing trade imbalance to
enable a fairer share of the benefits of trade” he said.

Kenyatta travelled to the CIIE in early November with an entourage of

Kenyan farmers and traders, hoping to strike deals and partnerships
in the fervour of the new deal.

The agricultural sector makes up 65% of all export earnings, namely

in tea, fresh cut flowers and coffee. Access to China’s enormous
appetite for agricultural produce would be invaluable for Kenyans
exporting anything from tea to smaller cash crops like avocados and
cashew nuts.

Horticulture, for example, which in 2017 raised $1.13B in export

earnings, is set to bloom under the new agreement. Europe has

8

historically been Kenya’s main market thanks
to a deal which grants the country duty-free
access to the international flower auction in
Amsterdam, where China buys it’s flowers. These
new developments would cut out the middle man
and create direct access to China’s growing luxury
goods market.
Kenyan exporters have so far struggled to access
the Chinese market. Hannah Ryder, CEO of China-
Africa consultancy company Development
Reimagined says this is indeed partly due to the
difficulty in acquiring sanitary and phytosanitary
certificates.
“
there’s a long way
to go before African
exporters in China
can enjoy the kinds
of privileges that
come with a strong
“ network.
network.
However, effectively tackling the trade imbalance
is going to require more comprehensive action.
Xinqing Lu, Programme Officer at AGRA, a non-
profit in the Agriculture industry in Africa, says
“actual progress will depend on the [government]
bureaucracy on both sides”, as an MoU is just the
first step.
Besides the bureaucratic challenge, exporting
from Africa to China is comparatively unchartered
territory with more hurdles to cross in terms of
logistics, support and access to information.
| MARCH 2019
Firstly, support for African businesses is scarce.
Hannah Ryder explains in a recent op-ed titled
‘Who is looking out for African businesses in
China’ that exporters looking to open shop in
China suffer from the lack of established entities
providing two basic services: information and
advocacy.
For Chinese investors in Africa, this kind of support
is provided by a network of well-established
councils and chambers. For example, members
of the Zhejiang Business Association in Kenya -
a significant proportion of whom own trading
businesses, share legal advice, information and
could, as a collective, offer suggestions to the
Kenyan government to implement more business-
friendly policies.
With a lack of centralisation and country specific
embassies and councils being too small to offer
comprehensive support, there’s a long way to
go before African exporters in China can enjoy
the kinds of privileges that come with a strong
Secondly, the Chinese market is not yet aware of
what countries like Kenya produce, and in a word-
of-mouth consumer culture, there has not yet
been much opportunity for African countries to
build a strong brand.
Sam Onanda, General Manager of the Africa Mall
says that there is a lack of awareness “that they
can source these high-end goods, these luxury
goods or these high-quality goods from [Africa]”.
In fact, initiatives that provide African exporters a
platform to exhibit their products, such as the CIIE
and the Africa Mall (pg.19), are vital in promoting
African products to the Chinese market.
This kind of promotion is especially important
for long-term growth, in which case policy needs
to encourage players “to add value in African
countries and then export to China” says Ryder.
9
shuttershock.com
 Onanda adds that there is huge scope on Kenyan
side to scale up “processing agricultural goods into
finished, more refined items”.
This sort of brand-building isn’t likely to happen
overnight, but thoughtful and deliberate promotion
of high quality and affordable products from Africa
will no doubt win over China’s pragmatic consumer.
On a similar note, “Kenyan exporters don’t
necessarily know what the Chinese consumer
wants or that they have a demand for their goods”
says Onanda. Promotion of African products
in China needs to be accompanied by a better
understanding of the Chinese market on the
Kenyan side.
Kenyan exporters are familiar with African and
Western markets, having had decades of experience
to fall back on. The Chinese market, however, is still
strange new territory.
Ryder says that one way this lack of information
can be tackled is through initiatives to “commission
market research studies, subsidise branding and
marketing in China to support [exporters]”.
China and Africa’s increasingly close ties, including
a growing African student diaspora in China, and
the introduction of Mandarin in some African
classrooms may also help bridge the gap in cultural
understanding and market know-how.
This might be a useful tool in the long term
providing that other more urgent measures are
implemented for Kenya to effectively capitalise on
the progress at policy level.

Rwanda’s eWTP
In partnership with Alibaba, Rwanda recently
launched the first Electronic World Trade
Platform (eWTP) which aims to provide a
platform for Rwandan SMEs to access the
Chinese market.

“Rwandan producers will be able to sell

directly to a much larger set of customers”
Paul Kagame, Rwanda’s president said, and
products such as coffee, handicrafts and even
tourism are set to benefit from this exposure.

The Initiative provides a convincing solution

to some of the barriers faced by African
exporters, a model which Alibaba hopes roll-
out to other countries in the continent.
Jack Ma and Paul Kagame at eWTP launch howafrica.com

10
 | MARCH 2019

AfCham Youth
By Khaoula Houssini

AfCham was built with youth dynamism as its

centerpiece. The belief that youths are the lifeline
of the future was pivotal when the framework
for AFCHAM was laid down. Today, this line of
thought is the main inspiration behind the youth
empowerment project the chamber is running. The
main objective is to give youths the skills they need
in order to reveal their full potential in all walks of
life - with particular emphasis on business related
skills. Through the African Chamber of Commerce
Youth Empowerment Program, talented youths are
detected, nurtured, and either strategically placed
to run AFCHAM missions or guided to follow their
own paths.

There are five ongoing courses under the African

Chamber of Commerce Youth Empowerment
Program (AYEP):
1. AYEP Public Speaking Course
2. AYEP African Languages (Swahili, Amharic,
Yoruba, Ormo, Igbo, Zulu, Shona, Hausa)
3. AYEP Website Design and Launch
4. AYEP Apps Design basics
5. AYEP CV Writing and Interview Launching
In line with AYEP, the African Chamber of
Commerce has been organizing different
networking sessions. Gathering students,
young entrepreneurs and experts of
the fields of Chinese education and
entrepreneurialism with the aim of giving
students and young entrepreneurs guidance
for their educational and professional
careers.

Moreover, AFCHAM, in cooperation with

Fesco Adecco and The World Bank Group,
successfully organized the “Global Job
Opportunities for International Students
in China” event. Over 40 attendees of 23
nationalities, all postgraduate degree holders
in various fields were drawn into in-depth
analyses on career choice and development
by experienced professionals from the three
organizations that brought the event to bear.

For queries on the Youth Empowerment Program and AFCHAM Vocational Training, contact:
Khaoula.houssini@afcham-china.org

11
 Corporate Social Responsibility
Our Corporate Social Responsibility (CSR) program has been designed to maximize the social and
development impact in Africa while enhancing the economic potential for our clients. The program
includes several focus areas for social impact targeted at specific issues that can improve the overall
CSR rating of a company. Following the guidelines set for the AfCham, our CSR programs protect
both Chinese and African interests and help to sustain a positive relationship between businesses
and local community, promoting a healthy business environment with a significant social impact.

Our CSR rating focuses on four main areas:

1 Social Impact
2 Investment
3 Involvement
4 Operations

Our rating has been devised in order to provide companies the best guidelines for adopting CSR
strategies according to their field of operation and the communities they would like to be engaged
with. Through the CSR rating, AFCHAM analyzes the socio-economic impact beyond a merely finan-
cial metric, measuring the involvement and operational strategies of the companies.

Our CSR programs:

1. Women and Youth Empowerment Programs: Expanding prospects for individual skills and agency
2. Ecotourism: Promoting ecotourism to support local communities protecting their environment
3. Funding Incubators: Providing facilities and equipment for start-ups and new small businesses
4. Local Sports Initiative: Funding for community sports teams and centers
5. Electrification of Villages: Electrification of villages that have no access to electricity and distribution of
solar panel lamps to primary schools.

12 Expand your horizons, join the AfCham CSR program.

shuttershock.com

Going Online
Ch i na ’s Pl a n s To E x po r t Its E-C ommerce C u ltu re To Af rica
By Timothy Ang
Last November, in the bustling central Chinese city of
Chengdu, hundreds of ambassadors and counsellors rep-
resenting 19 African nations met with the leaders of Chi-
na’s technology sector for the first China-Africa E-com-
merce Industrial Development Forum.
Just days after the much-hyped International Import
Expo, where around 200 African businesses put their
goods on display in Shanghai, the e-commerce forum was
the latest public display of China’s commitment to this
relatively minor aspect of its Africa engagement strategy.
Some of China’s largest tech giants are establishing roots
in Africa’s still immature e-commerce market, where a
mixture of structural limitations and more exciting mar-
kets elsewhere have deterred global players.
The prospect of getting an early seat at the table, howev-
er, has seemingly caught the eye of bigwigs such as Ali-
baba executive chairman Jack Ma, who has kickstarted
a number of preliminary initiatives aimed at sewing ties
with promising African tech talent.
In August Ma launched a $10 million annual prize
scheme for budding African business people, called the
Netrepreneur Prize, which Ma hopes will foster hundreds
of future tech leaders over the next decade. Each year
candidates will pitch their business models and 10 finalists
| MARCH 2019
shuttershock.com
will receive a $1 million grant from the Jack Ma Founda-
tion and mentoring from leaders in the industry.
“As a fellow entrepreneur, I understand the importance of
getting support during the early days,” Ma said at the pro-
gram’s launch event in Johannesburg. “This prize demon-
strates our support of a next generation of young entre-
preneurs across Africa that is paving the way for a better
future and impart positive change in their communities.”
Just two months later, Ma was in Rwanda, one of Afri-
ca’s fastest-growing economies, where he and President
Paul Kagame signed a series of agreements to promote
cross-border trade, digital infrastructure and tourism. At
the meeting, Alibaba welcomed Rwanda into its Elec-
tronic World Trade Platform, or eWTP, which provides
smaller businesses develop their logistical capacity and
digitalisation.
TMall, one of Alibaba’s online shopping platforms, has
also rolled out its “Tear Off the Label for Africa” edu-
cational campaign, aimed at eroding the negative image
many Chinese consumers have of goods originating from
the continent.
Despite being a dynamic and emergent space, the nascen-
cy of Africa’s e-commerce market nevertheless carries
with it a heap ofPhoto
issues1: that
namethe
Oneworld-leading Chinese
cuses sam sinumque
13
 giants may be ill-equipped, or
unwilling, to tackle. Compared
with what the likes of Alibaba
are achieving back home in
the domestic market, Chinese
companies are still dipping their
toes into Africa.

Emerging market
E-commerce is far from Africa’s
largest earner, but the market
is growing, and fast. According
to research site Statista, the
industry was worth $16.5 billion textmaster.com

in 2017 and is poised to hit $29 Africa already has familiarity with ideas like mobile

“
payments, which helped fuel the explosion of Chinese
Chinese giants such ecommerce. One of the largest service providers, Kenya’s
SimbaPay, recently launched a service piggy-backing

as Alibaba are hoping on China’s WeChat messenger, allowing money to be

transferred cheaply and easily between merchants in

to emulate in Africa
Africa and China both using the app.

what they have rolled

out in other emerging
“ Furthermore, homegrown platforms such as Kilimall or
Nigeria’s Jumia, both of which have operations in several
countries and stock goods from China, reflect the appetite
both among customers and local entrepreneurs. Disrupt
Africa, a platform for African startups, says there are
markets currently close to 300 e-commerce ventures across the 54
countries, all trying to get in on the activity.

The key step now, experts say, is for Chinese firms to tailor
billion by 2022 as necessary infrastructure, such as mobile services to local African markets. As a diverse continent
phone ownership, and household incomes continue to composed of different nations, languages, and sub-
rise. By 2025, when half of Africans have internet access, cultures, this will be no mean feat. But the mobile phone
this figure could be over $75 billion, say Mckinsey. revolution in Africa driven by Chinese brands sets a good
precedent.
For companies already setting up shop, this growth is
paying off. Alibaba, with 4.2 million customers on the “Look at Transsion in Hong Kong, the maker of Tecno
continent, saw the value of transactions through its brand phones – they’ve
AliExpress portal almost quadruple in 2017, driven by made Africa their focal
hungry consumers in key markets such as South Africa, market,” said Aubrey
Nigeria, and Kenya. Hruby, senior fellow with
the Africa Center at the
Admittedly this is pocket change next to China’s now $1 Atlantic Council and author
trillion digital marketplace, where two-fifths of the world of ‘The Next Africa’. “They
does its online shopping, according to official figures from offer keyboards in local
the Chinese commerce ministry. But China’s lightning- languages, and even have
quick growth in this area may also offer a model and extra-long-lasting batteries
inspiration for less developed economies such as those to deal with inconsistent
in Africa – a narrative often taken during China-Africa electricity access.”
trade talks.

14
 | MARCH 2019

Testing the water
Chinese giants such as Alibaba are hoping to emulate in
Africa what they have rolled out in other emerging mar-
kets, such as Turkey and India, capitalising where the US
players such as Amazon have shown less or no interest.
“Alibaba is a very smart company. They aren’t trying to
tions. Add to that a low bank account penetration and
scepticism towards handing over cash via the internet,
and it becomes clear that it will be many years before we
see investment in Africa returning big bucks.
“There is not an established culture of online buying due
to a big trust deficit,” said Stephany Zoo, head of mar-

“
go global everywhere at once,”
said China-based digital mar-
keting consultant. “It has
keting at BitPesa, a cross-bor-
as with any budding der payment platform based
in Nairobi. “Even the biggest

industry, African
been the company in China’s players don’t have advanced
e-commerce market. They see inventory systems, meaning

e-commerce has
poorer countries that have lit- what you paid for may not be
tle infrastructure, as China be- in stock and you end up with
fore, so they know exactly how
to deal with this sort of aspira-
tional consumer-base.”

Currently only a handle of

roadblocks that
Chinese attention
“ something completely differ-
ent. Then there’s still the ques-
tion of getting the package to
your door.”

African nations – usually the

largest economies with some won’t solve alone.
exceptions such as Rwanda –
are investing in e-commerce. Although Alibaba and Ten-
cent have plans to scale up, Hruby of the Atlantic Council
believes priorities will come first.
“Like many technology firms invested in Africa, they tend
to congregate in places like South Africa, Nigeria, Mo-
rocco, and Kenya,” said Hruby. “Expanding into smaller,
though rapidly growing, markets can often prove too dif-
ficult.”
And as with any budding industry, African e-commerce
has roadblocks that Chinese attention won’t solve alone.
Crucial requirements for an effective online delivery ser-
vice, such as individual post codes, for example, are still
lacking in many regions of even the richest African na-
But there the optics to consid-
er. Beijing often touts its ‘win-
win’ approach to Africa. We
see in Africa what the world saw in China a generation
ago, they say. China’s staggering growth has in no small
part been aided by its ability to absorb new technologies
and leapfrog stages of development. Will this be Africa’s
path?
E-commerce and services appear to be the next stage of
China’s strategy into the continent. Beginning with strict-
ly state-mandated infrastructure projects, China’s en-
gagement then expanded to include private investment in
the telecoms industry by the likes of Huawei and ZTE. If
Africa can sustain its growth and development, we could
be on the verge of a retail-centred third wave in Afro-Chi-
na relations.

Tecno is dominating the African mobile phone market Jack Ma at Netrepreneurs launch disrupt-africa.com
15
| MARCH 2019
 BENDO COMMUNITY GROUP
An AfCham partner

“Bendo” is associated with the word “Community” in afro culture.

Our objective is to implement impactful and sustainable social projects in education,
health, energy and more throughout the African continent.
We at BENDO Community Group believe that bringing people together through
leisure and entertainment can make a big impact. Not limiting ourselves to the
regular bag-of-rice charity, we introduce the richness of Afro cultures. Through our
events and parties, we want to build a community that adds a positive contribution to
African countries.

Our biggest events thus far are the Bendo Na Bendo parties, which started in March
2017 and have taken place in some of the best venues in Shanghai; including
the Meridian Hotel and the Hyatt Regency Hotel. They have attracted more than
350 people per party and have garnered a reputation as the best place to listen to
Afrobeats, Hip-hop, Dancehall and Reggaeton.

Where: ‘The Bar’ Hyatt Regency Hotel

When: Saturday evening, once a month, every month
Time: start 10:00pm end 3.30 am
Price: Free entrance Connect with us!
Music: Hip-Hop, Afrobeat, Dancehall, Reggaeton
Dress code: casual/chic WeChat: BendoCommunityGroup
Instagram: BendoCommunityGroup
2-year anniversary party: March 16th Facebook: Bendo Na Bendo #Shanghai
Email: william.bakinde@bendocommunity.com

18
 | MARCH 2019

C hin a’s First A fri can Trade

Hu b with A fCham
By Khaoula Houssini

On 15th November to 30th November the African

Chamber of Commerce in cooperation with Greenland
Commodity Trading Hub launched the first edition of
Shanghai African Import Exhibition.
Traders from different African countries based in China,
gathered on the 26th of October 2018 in order to
register for the exhibition, introduce their products and
network with the organizers and other traders.
The first edition of Shanghai African Import Exhibition
saw participation from the following African countries:
Cameroon, Togo, South Africa, Senegal, Ghana,
Ethiopia, Uganda, Madagascar, Sudan and Tanzania.
A variety of African products were promoted; including
beauty products, handicrafts, masks, accessories, local
coffee and gastronomic products and more. What
made these products unique and exclusive is that they
are all green and eco-friendly products. As a matter
of fact, one of the main aims behind the first edition of
the Shanghai African Import Exhibition was to promote
African agricultural products as well as handicraft items
that were produced in an environmental friendly way
that supports African local communities.
What made the Shanghai African Import Exhibition
exceptionally unique and especially impactful, is that
this exhibition culminated in a permanent Shanghai
African Mall opening on the second floor of Greenland
Commodity Trading Hub.

19
 Sam Onanda, Manager of Shanghai African
Import Exhibition and Shanghai African
Mall has put all his efforts in managing the
exhibition and providing the African traders
the necessary guidelines to adapt in terms
of import regulations, product sourcing
and successful steps for an outstanding
exhibition.
Sam Onanda in an interview during the
inauguration stated that the African Import
Mall at Ghub is a great opportunity to
showcase the quality, diversity and variety
of African products and services over an
offering of 1000 sqm space. He added
that he was impressed by the speed and
excellence of the merchandising as well as
the facilities and management of the client
services.
This is only the start of a successful
project aimed to demonstrate the potential
and prospects of African products traded
nationwide and to give African merchants
the opportunity to actively promote their
products in the various Chinese markets.
We believe in an inclusive development
engaging and supporting traders from all
African countries and today more than ever
we are committed to showcase African local
products and art-crafts in China.

If you are interested in importing, exporting or trading African goods please don’t hesitate to contact the
general manager of the Shanghai African Mall, Sam Onanda: sam.onanda@afcham-china.org.

20
Karibu
How Kenya’s safaris are
driving sustainable growth
By Zesemaiat Debessai Corino
Perched on a rock overlooking the grasslands of the
Kalama Coservancy sits Saruni Samburu, a cluster of
eco-chic, earth coloured villas. The Samburu lodge is
one of four Saruni properties, established by author
and visionary Riccardo Orizio, who on a quest to
have a “meaningful reason” to settle in Africa, started
the chain of boutique, luxury lodges and camps.
Teeming with a variety of natural landscapes, Kenya
offers idyllic beaches, lakes, mountains and most
famously, animals. Few tourists go to Kenya without
making time to go on a safari, and Saruni offers a
diverse experience with two properties in the Masai
Mara and another two in the county of Samburu.
Saruni’s ethos is all about creating an immersive
experience for their guests, a strong alternative to
‘tick-list tourism’, which can easily take precedence
in an industry hungry for profits. Guests can
enjoy game rides, bush walks, and breakfast or
sundowners in the wild.
But Saruni is also unique in another way. An
engrained culture of community and sustainability
permeates through to the guest’s experience; from
communal meals, to personal ‘Saruni’ engraved
water bottles, the overall experience leaves one
feeling like they’re contributing to something bigger.
Riccardo explains that there are three main tenets to
the business model. The first is community outreach,
to ensure that the local communities who own the
land profit from Saruni’s existence. As part of the deal
that allows the company to operate on their land,
locals receive conservancy fees and incomes from
employment at the lodges.
The second is environmental sustainability, “Saruni
21
 had to be an example of correct [environmental]
practices” says Riccardo. This includes energy
reliance on solar panels, effective recycling,
reducing plastic use and careful water usage,
among others.
the Kenyan tourism industry, as safaris are
increasingly moving away from mass tourism and
tapping into a more up-market clientele, who are
willing to pay the price for an experience like the
one Saruni offers.

“
In fact, according to the Kenya Tourism Board,
“Less people paying the average revenue from each tourist has
grown from Sh35,113 (approx. $350) in 2007
more money” is a to Sh74,412 (approx. $740) in 2016. “More
community friendly, more eco-friendly, more
crucial tool for the
industry to protect “ experiential trips are being offered and that is
shaping the kind of demand that is being directed
to Kenya” Riccardo says. “Less people paying
more money” is a crucial tool for the industry to

the environment. protect the environment.

Besides being willing to pay the price, Huang

Hongxiang, founder of China House, a Nairobi
In the savannah, conservation also means setting based sustainability consultancy company says
standards that protect the natural habitats so as that an educational component is necessary to
not to drive away or harm animals that live there.
For example, guides are trained to drive around
in a manner that doesn’t damage the soil, and
even the colour schemes of camps, lodges and
vehicles stay away from bright colours to avoid
unsettling the animals.

The last tenet comes as a consequence of

the first two. “Tourism is a crucial element of
conservation, because tourists provide the
necessary income” says Riccardo. “Without
tourists there is no conservation and without
conservation there is no tourism”. Advocating that
the industry can and should be at the forefront of
sustainability efforts.

Eco tourism Kenya, a leading voice in tourism

certification, list 38 lodges in the country, including
Saruni, as Gold rated standard, and 48 more as
Silver and Bronze. The industry is growing and it’s
“very much part of the DNA of the tourism industry
in Kenya” says Riccardo.

Those with the highest ratings tend to be more

expensive, high-end lodges, who have the means
to adhere to stricter and more comprehensive
environmental standards. In a setting ill equipped
with green infrastructure, being ‘green’ often takes
significant effort and investment.

However, this is not necessarily bad news for

22
 | MARCH 2019

drive conservation efforts on the tourists’

side.

China House works to add this aspect to

the Chinese tourist experience in Kenya,
and argues that this is a vital component
to changing perceptions. The number
of Chinese tourists who seek out
environmentally and animal friendly
practices is “still small but is increasing”,
says Huang.

He adds that in the past, absent any

significant effort to spread awareness
within the tourism industry, some
Chinese tourists may have been even
more inclined to buy ivory products after
visiting a national park. The kinds of
services being offered by organisations
such as China House address this issue
so that visitors are better informed and
don’t fall prey to complicit practices.

“We need to realise that it’s not a natural

thing” says Huang. “Seeing wildlife does
not mean that people will become more
conscious about conservation. We need
the educational component as well”.
23
Saruni Samburu property saruni.com
The Northern Rangelands
Trust supports 35 community
conservancies across northern and
coastal Kenya. Together, we are
changing the game; empowering
local people to take charge of their
wild spaces, to build sustainable
economies linked to conservation,
lead peace efforts to mend years
of conflict, and shape government
regulations to support it all.

Visit & donate!

https://www.nrt-kenya.org

24

Across the board, Riccardo adds that
tourists need better guidance on where
else to visit outside of the Masai Mara,
which is widely considered a must-
see destination. The challenge lies in
educating visitors to the fact that there
are a number of interesting attractions
which can offer a different overall
experience.
Each place needs time to be
explored, which doesn’t fit in with
what Riccardo calls a ‘consumeristic’
approach to travel, where visitors
are more interested in ticking off the
animals they’ve seen than the overall
experience. This can lead to an
overpopulation of tourists in certain
areas, chasing the perfect picture and
putting a strain on the environment and
animal wellbeing.
An important aspect of diversifying
tourist destinations is, unsurprisingly,
diversifying what’s on offer. “It’s
important for the tourism industry to
| MARCH 2019
gain territory” says Riccardo.
In fact, while in other safari-destination
countries like Botswana and Tanzania
there is a relatively large proportion of
land reserved for national parks, this is
not the case in Kenya.
In Kenya, a significant portion of the
wildlife exists in land owned privately
by local communities. This provides
an opportunity to further develop
“private land on which tourists and
conservation can thrive” says Riccardo.
Organisations such as the Northern
Rangelands Trust (NRT) are at the
forefront of this effort; building private
community conservancies in the north
of Kenya.
For many of these communities,
resources that in the past led to conflict
and poaching, under a framework
built to protect the environment, offer
a sustainable source of income and
development.
25
 Travel Ethiopia
With a variety of unique attractions, Ethiopia is growing as an alternative holiday destination for visitors
looking to explore the country’s distinctive history and culture. Ethiopia was named the ‘World’s Best
Tourism Destination’ in 2015 by the European Council on Tourism and Trade for it’s 9 World Heritage
sites and it “excellent preservation of humanity landmarks”. Here are some reasons to visit this
fascinating country:

Churches of Lalibela

Located 714 miles from Addis Ababa,

in the North Wollo zone of the Amhara
Region, the Rock-Hewn Churches of
Lalibela were built at the end of the 12th
century. The UNESCO World Heritage
Site has eleven such churches carved out
of solid rock and is to this day a place of
pilgrimage and devotion.

Jenna Belhumeur Al Jazeera

The first European to visit Lalibela,

missionary Francisco Alvarez, in
1521 labelled the churches as a
wonder of the world and wrote
back “I weary of writing more
about these buildings, because
it seems to me that I shall not be
believed”.

Jenna Belhumeur Al Jazeera

Each church has an appointed priest

- a prestigious position. Pictured:
A priest shows off an immaculaely
perserved manuscript kept inside
one of the churches.

26
Jenna Belhumeur Al Jazeera
 | MARCH 2019

Simien Mountains National Park

The Semien Mountains National

Park is located in North Gondar
Zone of Amhara, 800 miles
from Addis Ababa. The park’s
peaks reach 1900-3925 meters
above sea level and boast a
complex topography with 31 types
of wild animals.

Will Whitford independent.co.uk

Stephen Gollan uncharteredbackpacked.com Stephen Gollan uncharteredbackpacked.com

Gondar Royal Enclosure

King Fasil (Fasiledes)

settled in Gondar and
established the city as
a permanent capital in
1636. Successive kings
continued developing the
royal court and before
its decline in the late
eighteenth century, it
had developed into a
compound consisting
of six major building
complexes surrounded by
a wall 900 metres long -
Fasil Ghebbi.
John Elk Getty Images
27
 Axum

The ancient capital city of the Axumite empire (4th-7th century),

Axum is found in the central zones of Tigray National Regional
State. The city is a cradle of various archaeological and historical
sites that represent the ancient civilisation of Ethiopia which include
the Obelisks of Axum and other archaeologically unearthed ancient
artefacts, statues, churches and tombs.

UNESCO website

Ethiopia also boasts some

incredible natural landscapes
including the Danakil desert and news.et
the Great Rift Valley.

Lake Abaya (Arba Minch) is the largest lake in the Ethiopian Rift Valley flikr.com
28
 | MARCH 2019

Northern and Southern route

An AfCham exclusive trip with
Balehageru Tours Ethiopia

Attractions: Historical, Natural and

Cultural attractions

Duration: 6 days/5 nights

Mode of transportation: Surface/flight

Balehageru Tours facebook.com

Day 1 Hawassa-Arba Minch
Early morning visit fish market in Hawassa and drive to Arba-
Price
Minch from Hawassa. After checking in, sightseeing around Arba
• Please contact us for
Minch. Overnight Arba Minch (in Hotel).
AfCham exclusive prices
Day 2 Arba Minch
After breakfast, a boat trip on the beautiful lake Chamo, home to
Price includes:
the local hippopotamus and crocodile population. In the afternoon,
• Domestic flight fees (Addis
visit Dorze village, meet local tribes and learn more about their
to Lalibela, Lalibela to
way of life.
Axum, and Axum to Addis
Ababa)
Day 3 Arba Minch to Addis Ababa
• Transportation fee (Latest
Early morning, drive to Addis Ababa (510km) which will take most
model V8 Land Cruiser cars
likely a full day’s drive. Overnight in Addis Ababa (in hotel)
with third party insurance,
AC, seat belt and fuel and
Day 4 Flight to Lalibela
driver allowance)
After arrival and checking into hotel, visit the 11 rock-hewn
• Accommodation: Twin
churches of Lalibela. In the morning, visit the 1st and 2nd
bed rooms with full board
group which are symbolized by earthly Jerusalem and heavenly
service
Jerusalem. After lunch at 2pm we visit the 3rd group and the ‘arc
• Professional English guide
of Noah’ called St. Gorge. Overnight in Lalibela (in hotel)
• Entrance and Local guide
fee for all destinations
Day 5 Flight to Axum
• Governmental tax
A full day of visiting the sites of Axum, including the famous
• Bottled water during each
obelisks (one that was recently erected after being returned from
tour
Italy), the Queen of Sheba’s Bath (which supplies water to Axum
year-round), King Bazen’s tomb, and the Queen of Sheba’s
Palace. You can also visit the St. Mary of Zion church, where the
Ark of the Covenant is kept (only men are allowed to enter the old
church). Overnight in Axum (in hotel)
For reviews of Balehageru tours
Day 6 Flight back to Addis Ababa
visit their Facebook page @
A city tour in Addis Ababa. Addis Ababa is the headquarters of
the United Nations Economic Commission for Africa (UNECA) Balehageru Tours Ethiopia
and the African Union (AU). The city tour includes the national
museum, home of Lucy and other hominid skeleton dating back
3.2 million years, and sightseeing around the city. Afternoon free.
Nighttime - fare well dinner and departure.

End of tour

To find out more contact us at: discovery@afcham-china.org

29
 6 Ps
A different approach

By Luvodic Emmanuely

Economist and Chairman of Croissance PEACE

3Ps (Public-Private Partnership): The driving force of the activity is the public sector (the state
or a public authority). The public sector initiates projects ensuring or contributing to the public
service while the private sector runs, manages, and keeps finances under control, for which it
obtains financial compensation from the public.

6Ps: The driving force of the activity is the private sector. The private sector initiates and
implements while the public sector becomes a constructive facilitator that can lead to rapid and
effective implementation, subject to meeting certain specified criteria.

On the private side • the law is not respected (including corrupt

• Let’s assume that the private sector
knows what it needs in order to
prosper; the need for infrastructure and
equipment, staff training, financing, etc.
All factors which allow the growth of their
businesses.
• Let’s assume that now all studies,
statistics, existing figures, etc. are not
exclusive property of the public sector and
are available for the private sector as well.
• Finally, let us assume that the
development of African subregional
organizations, regional integration
organizations and the advent of
globalization metaphorically “blows up”
the borders within the continent.
 
Partnerships between private entities are
born out of need and have the capacity to
provide an operational and constructive
response; hence they have the expertise and
common sense.
 
On the public side
practice);
• there are significant security risks.
The public sector should work to facilitate and
improve private sector efficiency; including
by simplifying bureaucracy, promoting
regional integration, removing red tape,
facilitating entrepreneurship, combating
unfair competition and encouraging foreign
stakeholders to train local employees.
 
The public sector is therefore the guarantor of
general interest and must thus make private
action more efficient. The public sector must
effectively tackle the obstacles that prevent
private-private partnerships from flourishing.
 
Conclusion:
Welcome to another modus operandi for
working in Africa, reflected between Africans
and Croissance PEACE (including partners).
This new approach brings dynamism,
employment, industrialisation and limits
corruption...

The public sector can regulate private activity We call it the:

by cancelling all or part of an action if: “Private-Private Partnership Performed
• an undertaking is damaging to the Pushed by the Public” or “6 P”
collective interest (local, country, regional
or international).

30
AFRICA MUNDUS Cultural Centre
in China

AFRICA MUNDUS is a name coined by

primus inter pares of the AFRICA MUNDUS
international network, Emmanuel Argo.
Argo is an international ex officio advisor
to AfCham China as well as a Chatham
House and Oxford University History
Society member in the United Kingdom.
He is the author of the concept-paradigm
called NégroÉvolution. Previously, Argo was
a senior lecturer of European law at the
Faculty of Law in Rouen and acted as an
expert advisor to the European Economic
and Social Committee in Brussels.
The name AFRICA MUNDUS incorporates
the 5 continental regions known as the
cradle of humanity. The 6th region refers
to the community of peoples of African
origin living all over the world notably in the
Americas, the Caribbean, Europe, the Indian
Ocean and Australia.
AFRICA MUNDUS aims, with the support of
NégroÉvolution, to promote a positive image
of Africans of all origins and descents. The
cultural centre in China aims to contribute in
achieving this goal.

31
 INVESTOR REPORT
Ethiopia
By Timothy Ang
a. Overview
Ethiopia counts itself as one of Africa’s few true
success stories of recent years. Located in the
continent’s dynamic eastern region, Ethiopia
has boasted some of the world’s consistently
highest annual growth rates since the start of the
millennium, pulling millions of its citizens above the
poverty line as foreign investment accumulates and
the government stays loyal to a policy of gradual
expansion of the private sector.
Although still considered a low-income country by
most major international bodies, there are clear and
determined signs that the incumbent administration,
led by Abiy Ahmed of the long-ruling EPDRF
coalition, intend to maintain and even accelerate
current growth rates in order to propel Ethiopia
into the middle-income bracket by the middle
of the next decade. This has already thrown up
challenges regarding competing objectives, such
as tempering inflation while keeping investment
high, and restructuring the economy.
32
shuttershock.com
There are still notable hangovers from the
socialist Derg regime, including high-levels of
state ownership of industry and land. In addition,
a recent crackdown of opposition political parties
appears to be reaffirming the control of the already
authoritarian government, although any spillover
effects on foreign entities have so far been limited.
Despite this, Ethiopia is viewed as a safe, reliable,
and promising base in Africa, both politically and
economically. One of the least corrupt African
nations, the capital, Addis Ababa, serves as the
headquarters of the African Union and the UN
Economic Commission for Africa, as well as the
regional base for many global NGOs. The country’s
well-established strategic ties with the US remain
strong under the current administration, but the
development of economic partnerships with
China have offered a fresh source of trade and
an opportunity to diversify its reliance away from
Western economies.

1. Macroeconomic overview
In the past ten years, Ethiopia has managed
to sustain annual GDP growth of over 10%,
according to the International Monetary Fund
(IMF). In 2017, GDP stood at US$80.6 billion,
making it the largest economy in east Africa,
surpassing even neighbouring engines Kenya
and Uganda. The headline figure is expected to
hit $105 billion by 2020.
The IMF forecasts that growth will moderate
closer to 8% over the next two years, although this
remains well above the average for sub-Saharan
Africa of 5.4% over the last decade (World Bank,
2017). If achieved, this will likely also be sufficient
to achieve the government’s stated goal of
becoming a lower-middle income nation by 2025,
though the Ethiopian government itself hopes to
average 11% for the five years from 2016-2020.
GDP is currently led by agriculture, construction
and services, though the manufacturing sector is
growing as a proportion of total output. Between
2016 and 2017 the industrial component of GDP
rose 14% to ETB464.4 billion (US$16.4 billion),
compared with 4.3% in agriculture and 8% in
services. This ties in with the government’s
second five-year Growth and Transformation
Plan, or GTP II, aimed at repositioning Ethiopia
away from its reliance on raw materials, although
the dominant role of agriculture is accepted
for the time being. By 2025, the government
forecasts that manufacturing will account for 18%
of national output, up from 4.8% in 2015.
| MARCH 2019
Ethiopia’s consumer price index recorded
inflation of 10.4% in December (Central Statistical
Agency), down from 13.6% a year below, as the
government has sought to rein in expenditure
on pricey, capital-intensive projects, such as
the overdue ETB80 billion Grand Ethiopian
Renaissance Dam.
As a side effect of this economic strength,
unemployment has hovered just above 5% for
much of the last decade, comparing favourably
with other leading African economies such as
Nigeria at 23.1% as of last quarter, and Kenya
which remains over 10%. Data compiler Statista
estimate that Ethiopian unemployment was 5.2%
at the end of 2017
2. Trade
Ethiopia benefits from its geographical proximity
both to the trading and commodity hubs in the
middle East, as well as fast-growing economies
to the south. A landlocked country, Ethiopia has
conducted its shipping through Djibouti’s main
port during the conflict with Eritrea over the
last two decades. The recent rapprochement
with Asmara, however, means that Ethiopia will
regain access to two additional ports to carry out
international trade.
33
Ethiopia’s trading pattern is characteristic of
developing nations, with exports comprised
heavily of agricultural produce and imports
dominated by secondary sector goods to assist
the development of domestic manufacturing.
The difference in value of exports and imports,
however, has led to the trade deficit ballooning
from $3.6 billion in 2010 to $13.27 billion in 2017.
The GTP II plan list as one of its goals the raising
of export value as the economy transitions
towards manufacturing, which will be necessary
to pay for the expensive capital good imports. By
2020, the government expects that exports will
be worth 20.6% of GDP, from 9.7% in 2015.
3. Foreign direct investment
Ethiopia’s relationship with FDI is tightly linked
with the government’s signature policy plan,
GTP II, which spans the five years from 2016-
2020, and follows on from the first phase
launched in 2010. The overarching theme of the
initiative is to upgrade the Ethiopian economy
from one based on the cultivation and export
of agricultural goods to one led by value-added
manufacturing.
To fund the massive scale of public investment
in physical infrastructure, industrial parks, and
34
implementing more efficient agricultural
practices, Ethiopia has required heavy
financial inflows from abroad – a problem
exacerbated by Ethiopians’ relatively low
domestic savings rate.
The government has helped to attract FDI
with tax breaks for investors in a number of
manufacturing, chemical, and commodity
sectors. New investors in these areas can
claim up to five years of tax exemption
depending on the location of their investment.
Overseas groups which produce goods
that can be exported (or supply goods to a
domestic exporter), or invest in designated
Industrial Development Zones near the
capital are also eligible for a further two years
tax-free status.
In addition, the Ethiopian Investment
Commission (EIC), whose mandate is
predominately to foster a more thriving
domestic business climate, has taken steps to
streamline the inbound investment process,
including the introduction of at least 28
services related to licensing, registration, and
low-duty imports of capital goods. Ethiopia
is currently ranked 159 out of 190 countries
in the World Bank’s Doing Business Report
2019.
Ethiopia has attracted over half of all foreign
capital into East Africa in recent years. Net
FDI inflows have climbed to $3.6 billion, as
of 2017 (UNCTAD), triple that recorded in
2010 at the beginning of GTP I, and ten-fold
pre-2007 levels. FDI inflows now make up
12.8% of gross fixed capital formation, which
is higher than the East African average of
10.5%. Total FDI stock was $18.5 billion in
2017, up from $11 billion in 2015.
While the source of the investment is
widespread, China, Turkey, and India have
been Ethiopia’s largest contributors since
2010, both by dollars spent and the number
of projects carried out.
The government has made clear in its
proposal for the ongoing GTP II that the focus
for FDI will be on obtaining higher-quality and
higher-impact investment, which will entail
 | MARCH 2019

bolstering the quality and

competitiveness of homemade
goods and services, as well as
continuing to improve bilateral
relations with potential markets.

Furthermore, Ethiopia is among

one of the most outward looking
African nations, having signed
up to the Multilateral Investment
Guarantee Agency (MIGA) and has
bilateral investment arrangements
with over 30 nations. It also
benefits from a treaty prohibiting
double taxation with the US, UK,
Russia, Israel, and South Africa,
among others.

4. Limitations on FDI
As is true for many nations,
inbound investment is closed
off for several large, wholly
nationalised industries providing
public services, including
telecommunications, power
distribution, and the postal
service.

Most importantly, however,

investment law also prohibits
foreign investment in some
key, consumer-oriented service
industries, above all the financial
sector and retail trade. Export
markets are well protected, such
as coffee (Ethiopia’s largest
export by dollar value), oilseeds, and livestock, as well as most import trade.Within these sectors,
foreign firms may act upstream from the domestic producers or service providers, but may not
partake in a joint venture.

The government has made public intentions to fatten out the private sector as part of its wider
appetite for reforms to allow corrections in Ethiopia’s lopsided economy. This was exemplified
by a pledge to privatise embattled state energy carrier Ethiopian Electric Power Corp., which
currently holds over 300 billion Birr of debt, or around 99% of its capital. Similar comments have
been made towards the country’s highly-regarded state airline.

35
4.i Property rights
A continuation of Ethiopia’s socialist history,
land is deemed an asset of “the people” and is
entirely controlled by the central government.
As with systems in other liberalised planned
economies such as China, private ownership
does not formally exist but instead occupants,
both residents and businesses, lease properties
for long periods of up to 99 years which
effectively substitute private deeds.
However, the government was wide-ranging
eminent domain, and can expropriate any
land for the ‘common good’, a term which
encompasses establishing commercial farms,
industrial zones, and infrastructure. This has
led to occasional conflict with local residents,
particularly in cases when grazing land has
been allocated to investors. Furthermore, land
law can vary in part between regions. It is
necessary, therefore, for prospective investors
to liaise closely with both federal and local
governments regarding leasing regulations.
Regarding intellectual property, Ethiopia has
expressed its goal of meeting international
norms though remains absent from key IP
treaties such as the Paris Convention for the
Protection of Industrial Property. The Ethiopian
Intellectual Property Office, a small and poorly-
funded department, adheres to the mandate of
protection domestic patent rights and copyright
materials, but has no law enforcement authority.
No official data on levels of counterfeit goods
are available, but the US Department of State
claims that abuse of US trademarks remains
a significant problem in certain tertiary sector
industries.
36
5. Ease of doing business
The pressure to attract foreign funds, particularly
to fuel growth in key export industries, has
pushed the EIC to drastically trim down red
tape for potential investors. It is now possible
to receive a business license within one day of
application, though this is the lower extreme and
not commonplace. More streamlining has been
highlighted as one of the goals of the current
five-year plan.
The 2019 World Bank Doing Business Report,
which placed Ethiopia 159 out of the 190
countries surveyed, said that starting a business
in Ethiopia takes on average 32 days, roughly 9
days longer than for the rest of Sub Saharan
Africa. It was more expensive and involved
more bureaucracy than the regional average.
Zooming in, Ethiopia still lags well behind the
East African highfliers as a place to do business.
Rwanda, which ranks 29 worldwide – the
second highest among African nations behind
Mauritius - has soared up the list in recent
years following a package of market reforms
simplifying property and business registration
procedures. The Ethiopian Ministry of Trade has
made some initial steps in this direction, such
as shedding the minimal capital requirement
for LLCs and yearly business license renewals,
but so far plans to take the system digital as in
Rwanda and Kenya have yet to be realised.
There is still much ground to be made in terms
of innovation, too. According to the Global
Innovation Index Ethiopia ranks 110 out of 127,
behind a short list of African nations including
Kenya, Rwanda, Uganda, Nigeria, Namibia,
and Botswana.
World Bank Doing Business Report 2019

6. Consumer market
Ethiopia’s population of over 100 million –
the second largest after Nigeria – makes it a
particularly appealing consumer market. As
more Ethiopians climb out of poverty and the
country moves towards its goals of lower-
middle-income status, appetites for cheap
consumer goods will inevitably continue
to swell, offering lucrative opportunities for
companies who can gain an initial foothold and
navigate the local culture.
Growing consumer power is perhaps the most
exciting aspects of the Ethiopian economy.
Between 2000 and 2015, the proportion of the
population living under the poverty line almost
halved from 44% to 23.4% (National Planning
Commission), meaning tens on millions of
Ethiopians no longer living on subsistence
farming and millions more finding themselves
with expendable income for the first time.
| MARCH 2019
As we have seen in other, more developed
African economies, this can create a boom
for household normal goods like clothing and
footwear, but also mobile phones and branded
food.
The African Consumer Sentiment Report
2016 published by BCG found that Ethiopians
were among the most optimistic people in
Africa when asked about their own economic
prospects. Around 89% of those surveyed
(mainly urban residents) said that they felt
“financially secure”, while 88% said they were
“Eager to buy new things”. This was much
higher than the previous study, and more
positive than South Africa and Kenya.
In 2018, Kenya’s Safaricom announced that it
will be rolling out its M-Pesa mobile payment
platform in Ethiopia, where it will hope to
recreate the transformative effect it has had in
its home market. Ethiopia’s internet penetration
is still low, at 15.3% according to IWS statistics,
but phone ownership has been growing at a
double-digit pace, with one around one-in-four
owners using internet and data. If the country’s
nascent e-commerce market can begin on the
right track under proper government guidance,
this could be a strong motor to drive spending.
Nigerian online shop Jumia, one of the
continent’s largest e-commerce companies, is
already established in Ethiopia.
Edna Mall in Addis Ababa flickr.com 37
 close its current account deficit by
growing out its high-value export
capacity through manufacturing
development, which is currently
not producing enough to pay off
imports of machinery.

Administrative barriers such as

inefficient tax collection and low
savings rates, endemic to many
African economies, have intensified
the issue, but there is evidence
here, too, that the situation is
being addressed. Ethiopia’s tax-
to-GDP ratio was 10.7% in 2010,
according to official figures, around
6% under the average for Sub
Saharan African nations, but rose to 13.3% in
7 Additional limitations
2015. Under GTP II, the government intends to
The capital cost requirements of GTP I & II
lift this further to 17.2% by 2020.
have forced the government to widen its budget
deficit and accept loans from the likes of the
8. Regulatory environment
World Bank to help cover temporary financing
Ethiopia is considered a relatively fair and
costs. Last year the bank extended $1.7 billion
clean regulatory system by African standards.
to Ethiopia, supplementing over $550 million
According to Transparency International’s
obtained from other foreign aid and grants.
2018 Corruption Perceptions Index, which
focuses on the public sector, Ethiopia scored
However, heavy imbalances following decades
34/100, where 100 indicates very low levels of
of political and social unrest have meant
corruption. This ranked it 114 out of 180, higher
that recent investment is yet to generate the
than Kenya and Nigeria (joint at 144), though
necessary income to repay the debt. Ethiopia
far off Rwanda at 48.
recently rescheduled 60% of its outstanding
loan repayments to 30 years from 10 years,
As for its effect on business, foreign investors
according to Prime Minister Abiy Ahmed in
view Ethiopia as a safe haven for corruption
February. Until the economy catches up with
compared to regional alternatives, particularly
the newly-built infrastructure and capacity,
when dealing with the country’s large state-
the debt burden will continue to weigh on
owned enterprises. There have been reports
economic policy. As of 2016, Ethiopia’s debt
of bribery during tax collection and land
as a percentage of GDP was 57.9%, before
administration involving foreign businesses,
the latest bout of expenditure. This compares
but on the whole Ethiopia appears to be moving
favourably with neighbouring Kenya’s 61.0%
in the right direction.
and Sudan’s 66.5%, but is well above other
East African nations such as Uganda at 37.0%
Contract law and commercial law are both
and Rwanda at 37.6%.
codified and such cases are relatively absent
of government interference. The government is
In response, the government has had to tighten
currently drawing up a reformed Commercial
its purse strings, Abiy said, though the GTP
Code in line with international best practices,
II proposal targets a four-percentage point
which will include creating a specialised
increase in capital expenditure as a proportion
court for commercial law cases and raise the
of GDP by the end of the five-year cycle. This
expertise of judges adjudicating business
has had the corollary effect of cooling inflation.
disputes (US Department of State, 2018).
It also intensifies the government’s desire to

38

9. Financial risks
Despite a rapidly growing economy, access to
credit remains Ethiopia’s principle challenge if
it wants to sustain growth across the economy.
Banks often demand 100% collateral deposits
and the central bank (National Bank of Ethiopia)
has, since 2011, required non-government
banks to invest 27% of each new loan extended
in state coffers, creating a widespread liquidity
drought.
Nevertheless, Ethiopia’s upside growth
potential and commitment to infrastructure
spending under GTP II has earnt the country a
‘B’ rating from the three global ratings agencies
as of February 2018. The government offers a
small quota of 28-day, 3-month, 6-month, and
one-year Treasury bills, but interest rates are
kept under the bank deposit rate, currently
7%. Demand for the bills has been muted from
private investors, and 95% remain in possession
of state enterprises.
The NBE is working on plans for the country’s
first stock market, which will likely be modelled
on the commodity exchange (ECX) for goods
such as coffee, wheat, mung beans, and
corn, established in 2008. The exchange was
reformed in 2017 following criticism of inefficient
price allocation due to distorting regulations.
Of Ethiopia’s eighteen commercial banks, just
one is state-owned – the Development Bank
of Ethiopia, tasked with funnelling capital to
priority industries as outlined in GTP I & II.
Financial services to retail customers are off-
Ethiopia Commodity Exchange Africabusinesscentral.com
| MARCH 2019
limits for foreign participation, though some
foreign banks have opened liaison offices in the
capital to extend credit to compatriot companies
working in Ethiopia.
9.i Foreign exchange
The instability of the birr has been something
of a headache for Ethiopia in the past
decade, due to its sustained weakness and
poor administration. The birr is still not freely
convertible.
Since 2012, forex reserves have been
desperately low, stressing the need for continual
outside financing if the government wishes
to fulfil its ambitious infrastructure projects
and import-led industrial development. Being
strongly responsive to global commodity prices,
Ethiopia’s reserves have been further tested
by weaker coffee bean and oil seed prices.
For local businesses, this can mean significant
delays of up to a year while seeking foreign
exchange in Ethiopia, threatening their ability to
pay for imported goods and machinery.
The birr lost around 98% of its value against
the dollar between August 2010 and February
2018, according to central bank data, requiring
the government to raise savings interest rates to
7% from 4% in 2017 and limit new commercial
bank loans to only export and manufacturing
businesses. Banks were also forced to transfer
30% of their forex to the central bank to help
cover the costs of fundamental imports, such
as sugar and oil.
39
 10. Ethiopia-China Relations
Ties between Ethiopia and China are strong,
with Beijing considering Ethiopia a key
regional partner. Bilateral trade surpassed
$3 billion in 2017, the bulk of which flowing
from China to Ethiopia in the form of industrial
goods and cheap consumer goods. China is
now Ethiopia’s largest trading partner, and a
major provider of investment in infrastructure.
China has pursued dozens of high-profile
projects in Ethiopia under the umbrella of
its ambitious ‘Belt and Road’ infrastructure
initiative, in which Beijing seeks to bolster
its diplomatic and economic influence in
developing economies by providing flexible
loan packages to cash-starved governments.
In the fiscal year 2017/18, Ethiopia gave
1,294 project licenses to Chinese bidders,
around one-quarter of all deals. One headline
project, the $4.5 billion Addis Ababa-Djibouti
Railway, was inaugurated last year, opening a
fresh supply route to the eastern coast.
Ethiopia also represents a useful sink for
cheap Chinese-manufactured goods as its
economy matures and income levels rise.
China has followed similar strategies in
other African countries, such as Kenya and
Zimbabwe, where everything from watches to
smartphones have splashed on the market at
competitive prices, given China’s comparative
advantage from being the world’s factory.
From the reverse standpoint, Ethiopia has in
China a valuable ally to flesh out its capital
inflows. Although Ethiopia has not been
neglected by the global
community, the current
structure of its economy
mean that its dependence
on foreign cash is severe.
China has largely been
on hand to provide this,
injecting $13 billion into
Ethiopia between 2006
and 2015, according to
a Financial Times report,
however recent reports
suggest that Chinese
credit providers have
pared back their support,
40
possibly in light of Ethiopia’s ongoing forex
and debt concerns.
Ethiopia: Africa’s visionary
There is no doubt that Ethiopia is a must-
watch market in Africa, given both its laudable
reduction of widespread poverty and its lofty
and defined goals for the near- to mid-term
future. Ethiopia may still have only taken the
first steps toward prosperity, but several key
structural and cultural factors, namely its
proximity to other fast-growing nations and
relative absence of corruption, will position it
well to absorb further development.
The success of GTP II is essential in
legitimising this administration’s economic
governance. If the plan’s goals with regards to
manufacturing capacity and exports are met,
then Ethiopia could well be among the next
generation of factory nations as China and
India move up the global value chain. This
is also the most viable solution to Ethiopia’s
rising debt burden and foreign exchange
crisis.
Nevertheless, to consider the Ethiopia of two
decades ago, with a majority of its population
under the poverty line, testifies to the rapid
growth and dynamism still available in this
low-income market. Few African countries of
similar income can boast such strong ties with
the world’s two largest economies. Many of
the foundations are set to become a booming
developing nation. The next stages will be
crucial.
Ethiopia-Djibuti Railway link bbc.com
 | MARCH 2019

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41
 Investment Incentives for Tourism Companies In Ethiopia
INCENTIVES OFFERED BY THE FEDERAL
GOVERNMENT
Investments in tourism can benefit from the following
incentives granted by the Federal Government:
• Exemption of Customs duty for capital goods and
construction materials
• Exemption of Custom duties for motor vehicles
• Remittance of profit, dividends, principals and
interest payments on external loans
• Access to land at competitive price (land is public
in Ethiopia and the government offers long term
leases)
Incentives for Investments in Star Rated Hotels
Investors in star rated hotels fulfilling the conditions
listed below are allowed to import capital investments,
building materials and goods:
• Evidence that land has been secured;
• Evidence that the project has commenced, such
as the construction of the main building and
infrastructure, from the corresponding Regional
Investment Bureau/office.
Further details regarding what can be imported duty
free can be obtained from the Ethiopian Investment
Commission.
Ethiopian Investment Board Directives No.3/2003E.C
regarding duty free vehicles
A. Investments in eligible star rated hotels and
accommodation are allowed to import duty free:
• 1 pickup vehicle for one or two stars properties
and 2 pickup vehicles for three and above star
hotels;
• In addition, hotel businesses already operational
with 25-50 permanent employees can import free
of duty 2 mini buses or 1 bus, those with 50 or
more permanent employees can import duty free
3 minibuses or 2 buses.
In order to have access to these incentives investors
should provide i) evidence of a land lease contract,
ii) if capital equipment is imported from abroad, a
bill of landing or airway bill or track way bill and
invoice, iii) if the capital goods are procured from a
local company, the procurement contract with the
essential documents, iv) evidence of the beginning
of operations and evidence of at least three month
42
payroll and government tax payable for permanent
employees.
• Companies purchasing the eligible number of
duty free vehicles from a local car assembling or
production factory are entitled to get a deduction of
the Customs duty paid by the factory for importing
the necessary assembling parts.
B. Investors in tour operations that fulfill the minimum
investment requirements are allowed to import
3 duty free vehicles in two rounds (in any case,
they are requested to buy one vehicle and pay the
corresponding taxes before they can have access to
the duty free privileges). Basic requirements are:
• Meet the Ethiopian Ministry of Culture and
Tourism regulations for a tour operation business
to get an Investment License from the Ethiopian
Investment Commission;
• Get a recommendation letter from the Ethiopian
Ministry of Culture and Tourism to apply for duty
free privileges.
• Companies purchasing the eligible number of
duty free vehicles from a local car assembling or
production factory are entitled to get a deduction of
the Customs duty paid by the factory for importing
the necessary assembling parts.
Investors should contact the Ethiopian Tourism
Commission to get more details regarding the type of
vehicles they can import duty free.
INCENTIVES OFFERED BY REGIONAL
GOVERNMENTS
Some Regional Governments provide additional
incentives for investors to facilitate access to land:
• Amhara National Regional State (Northern
Ethiopia):
• Investment activities for which land is provided
with initial lease price and grace period are:
• Residential and commercial housing
development
• Star hotels
• Tourist lodges
• Gambella National Regional State (Western
Ethiopia): Land is provided free of lease for Star
Hotels
• Benshangul Gumuz National Regional State:
Investments in urban areas may obtain land free
of lease.

Why Invest in Tourism in Ethiopia
Growing Double Digit Economy
The International Monetary Fund (IMF) ranks Ethiopia
as among the five fastest growing economies in the
world. New buildings are rising in the cities daily and
sectors like tourism, trade, agriculture, infrastructure,
education, health, sport and many others are developing
at a fast pace. Ethiopia is a country in motion and
presents a positive energy for investors.
Stability and Security
Ethiopia is stable and safe for travelling, and the locals
are welcoming and hospitable. Ethiopia is ranked
positively in the Global Competitiveness Report in
terms of ‘Business costs of crime and violence’ (44 out
of 144 countries).
Growing Trend of International Tourism
Arrivals
Inbound Tourist Arrivals in Ethiopia have
grown from 115,000 in 1999 to almost
800,000 in 2014 and in 2016 the inbound
reach to nearly one million.
International Air Connections
Thanks to its strategic location in the
crossroads between Africa, the Middle
East, and Asia and to the national carrier
Ethiopian Airlines (a member of Star
Alliance), Addis Ababa is a top air hub in
Africa. Ethiopian Airlines is a dynamic
company constantly expanding its network
of flights, currently serving 90 destinations
worldwide.
Domestic Air Travel
A well-developed network of domestic airports and
flights serves the main tourism destinations. Ethiopia is
also well ranked in the Global Competitiveness Report
in terms of ‘Quality of air transport infrastructure’ (38 out
of 144 countries).
Improving Road Infrastructure
The majority of tourism destinations can be accessed
by paved roads.
Unique Cultural and Natural Attractions, with great
potential to be further developed:
• Highest number of UNESCO World Heritage sites
in Africa (8 cultural world heritage sites, 1 natural
world heritage site, 1 intangible cultural heritage).
• Land of Origins. Ethiopia is the cradle of humankind,
where our ancestors first walked on two legs. It is
also the source of the Blue Nile and it is the origin
| MARCH 2019
of coffee that still grows wild in the lush forests of
the West.
• A wealth of archaeological sites and treasures:
the oldest tools in the world, the remains of great
civilizations like Yeha and Aksum, with its giant
monoliths, of powerful kingdoms that gave splendor
to Gondar with its 17th century fairytale castles
unique in Africa.
• Living kaleidoscope of peoples drawn from many
different ethnic backgrounds and speaking 80
different languages.
• Dramatic landscapes: from the highlands that reach
over 4000m in the Simien Mountains National Park
(the Roof of Africa), to the Danakil Depression
situated under sea level, plus active volcanoes and
lakes such as those dotting the Great Rift Valley.
telegraph.co.uk
The Diplomatic Capital of Africa, Addis Ababa
Addis Ababa hosts 120 foreign embassies and
diplomatic missions plus the headquarters of important
international organizations including the African Union
(AU) and the United Nations Economic Commission
for Africa (UNECA). A growing number of international
standard hotels like Hilton, Sheraton, Radisson,
Golden Tulip, Marriott and Ramada an ever-improving
infrastructure, a hub airport and world-class conference
venues at the AU, the UNECA and the Millennium Hall,
make Addis Ababa a destination of choice for meetings,
conferences and exhibitions.
Abundant and Trainable Workforce
Ethiopia has a large young population. As the tourism
industry develops so does the number of training
centers offering tourism studies. Currently there are
over 50 TVET centers countrywide offering vocational
training in tourism as well as several universities offering
tourism management degrees. Higher education in
Ethiopia is in English.
43
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