Ethiopia: The Ever Widening Ethio-Arab Economic Ties

Photo: RFI

(File photo).

The historical, cultural and religious resemblance between Ethiopia and the Arab world is the asset paving the way for the two parties to work together for a meaningful economic relation and reap the fruit of their engagement.

There are platforms that have been serving Ethiopia as gateways to foster its economic cooperation and coordination with countries in the Arab world. In this regard, the League of Arab States (also known as Arab League) becomes in the forefront.

The League established its embassy in Addis Ababa in 2009 representing its 22 member countries in North Africa, Horn of Africa and Arabia.

Being home to the African Union (AU) and United Nations Economic Commission for Africa (UNECA), Ethiopia presents itself for increased connection in trade and investment fields with members of the League.

Accordingly, 17 members of the Arab League have set up embassies in Addis Ababa with growing interest to step up the economic partnership.

The double membership of Djibouti, Sudan and Somalia in the Arab League and the Intergovernmental Authority on Development (IGAD) is also believed to promote the two sides economic ties.

Ethiopia becomes one of the leading destinations for Arab investment in Africa that is manifested by the increased Foreign Direct Investment coming from Egypt, Sudan, Saudi Arabia, United Arab Emirates and other members of the League.

Due to the rapid economic progress the country has registered over the past decade, it has managed to catch the attention of more investment from the Arab and the rest of the world.

Ethiopia’s favorable investment policy and attractive incentive packages are also widely regarded as pulling factors for investment from the Arab world and the trend is expected to continue by bringing others on board.

Taking in to account farming in many Arab countries has been challenged by low water supply and bad weather, the government of Ethiopia is engaged to make the country an ideal place for their priority agricultural investment.

Accordingly, big agricultural companies from the region have been invested in Ethiopia of which Saudi Star Agricultural Development Plc is the major one.

Owned by Ethiopian-born Saudi business tycoon Sheikh Mohammed Hussein Ali Al-Amoudi, Saudi Star has rice processing factory and large farm land in Alwero Woreda of Gambella State.

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The government has also been hugely investing to improve country’s infrastructural networks that have been evidently successful in enhancing flow of investment and trade exchanges with members of the League.

The joint commissions Ethiopia has formed with some Arab League countries have been playing an immense role in outlining economic cooperation frameworks and initiating the signing of various agreements.

The commissions have also been credited in enabling Ethiopia signed Agreement for Promotion and Protection of Investment and Avoidance of Double Taxation with some members of the League. The agreements are thereby essential in encouraging more investors from the Arab world come and do business in Ethiopia and enhancing the trade exchange.

Ethiopian missions in the Arab League member countries and the League’s embassy in Addis Ababa have been engaged in promoting economic partnership and informing potential stakeholders about Ethiopia’s investment opportunities.

Furthermore, embassies have been participated in the annual Riyadh Travel Fair and Dubai’s Gulf Food Exhibition to seek market for country’s agricultural exports and promote its wider investment opportunities among potential stakeholders.

These exhibitions are also helpful to identify the interest of Arab companies and aware them about the potential of the country.

The national flag carrier, The Ethiopian Airlines and airlines from Arab countries have a paramount importance in strengthening the two sides economic ties.

Capitalizing on its extensive destinations in the Arab world, Ethiopian has been playing a distinctive role in promoting Ethiopia’s trade and investment opportunities among potential stakeholders in the region.

High level frequent exchange visits that have been made between Ethiopia and leaders of Arab League member countries are believed to take the multifaceted relations to new heights.

In this regard, the visit Prime Minister Hailemariam Dessalgen held in Saudi Arabia in 2016 and Qatar’ Emir Sheikh Tamim bin Hamad Al Thani’s visit of Ethiopia in last April have big roles in giving momentum for the respective countries’ economic ties.

During his visit to Saudi Arabia, Prime Minister Hailemariam held discussions with the high level Saudi officials including King Salman bin Abdulaziz Al-Saud on ways of scaling up Saudi investors involvement in Ethiopia and Saudi supporting Ethiopia’s development.

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The visit bears fruits in short time in that two high-level Saudi delegations led by Minister of Environment, Water and Agriculture Abdulmoshen Al-Fadhli and the Senior Advisor at the Royal Court Ahmed Alkhateeb made visits to Ethiopia along with representatives of major Saudi companies.

Furthermore, the Association of Senates, Shoora and Equivalent Councils in Africa and the Arab world (ASSECAA), which was established by 24 African and Arab countries, has been instrumental in supporting Ethiopia to reach mutual economic cooperation with various Arab countries.

ASSECAA also helps the government of Ethiopia to inform development activities that have been taking place in the country. By doing so, Ethiopia has been employing the Association to lure more investments from the Arab world to its economy.

Bearing in mind the stated facts, however, Ethiopia’s economic ties with members of the League have not reached at the desired level compared with the two sides long-standing people-to-people and diplomatic ties as well as geographic proximity.

As a potential arm to advance Ethiopia’s multifaceted relations with members of the League, a lot is expected from the joint commissions in initiating new areas of cooperation and enhancing the existing ones.

Ethiopia needs to work closely with members of the League and expected to facilitate conditions to attract more investments from the Arab world. Besides, the government should initiate high level visits that would be crucial in cementing economic cooperation agreements.

Embassies in members of the League need to extend their leading role in promoting Ethiopia’s investment opportunities and hold discussions with investment authorities of the respective countries to encourage potential investors from the region to come and do business in the country.

Above all, realizing the much desired synergy between the economies of Ethiopia and countries in the Arab world is not the assignment of a single entity rather a shared responsibility of all actors in the effort.

Investment and trade, particularly investment in the agriculture and industry sectors has remained the main cooperation areas between Ethiopia and the Arab world. Through enhancing this relation, Ethiopia could benefit from the Arabs’ huge capital and the Arabs could benefit from Ethiopia’s untapped investment potential.

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