Addis Abeba, December 04/2018 -Results of the First Business Outlook Survey which involved 39 German companies operating in Ethiopia shows high expectations of business and economic growth in the country. The survey, which was the first ever Business Outlook Survey of German companies in the country, was conducted by the Delegation of German Industry and Commerce in Eastern Africa (AHK), a statement from the German embassy in Addis Abeba says.
Accordingly, 69% expect their businesses to get even better within the next twelve months. 54% expressed interest in further investment in their local operations, while 64% are satisfied with their current situation in the country and 44% expressed higher interest in increasing their local employment opportunities. The results are part of a Global Business Outlook Survey conducted by The Association of German Chambers of Commerce and Industry (DIHK) and the 140 AHK offices amongst 3500 companies in 92 countries worldwide.
“To have 64% of companies express satisfaction in their current investment is no small feat. Of course, there are still some challenges such as the forex shortage which have hampered international business. Nevertheless, this country is ripe with opportunities for partnership, trade and investment. For this reason, I am proud to announce we plan to open a permanent presence in Ethiopia in 2019. We want to be closer to our clients and the market to be able to provide faster and more efficient service,” said Maren Diale-Schellschmidt, Country Director, Delegation of German Industry and Commerce in Eastern Africa (AHK).
Brita Wagener, Ambassador of the Federal Republic of Germany to Ethiopia, on her part stated that the results show that “Ethiopia has great potential for business.” Ambassador Wagener expressed her delight to see that the country is evolving towards being a strong economic partner in the region. “The progressive spirit expressed by the country’s leadership in focusing on development activities and economic reforms is very encouraging. The present reforms are recognized by the business community which is willing to extend its activities here in the country,” she said.
Risks to business growth
However, there are some risks German businesses operating in the country face, according to the survey. “69.2% of the companies express financing as a risk, while a further 46.2% indicate that the exchange rate as an impediment. This is indicative of the foreign exchange shortage currently gripping the country,” the statement from the embassy reads.
Other risks to business, as expressed in the responses, include 43.6% business environment, 28.2% lack of skilled labor, 20% trade barriers, 12% infrastructure and 10.3% demand. We can see from these responses that even though a majority of the companies remain confident in Ethiopian business opportunities, there are major concerns to be worked on to facilitate further growth. AS