Ethiopia used to be associated with famine, but times are changing so fast in the highly populated East African country. Ethiopia currently is the fastest growing Economy in Africa. There is so much buzz in the street and it’s not hard to see why.  It is presently a choice destination for investment with its growing economy and large population. What possible areas can a potential investor be looking at when considering investing in Ethiopia?

Financial Services

The African financial services sector has greatly benefited from international banks playing a role in private equity and expansion deals. But such activity has been absent in Ethiopia – home to Africa’s 9th largest economy and 2nd biggest population.

Private investors lurk around banks in Ethiopia, eager to jump into a sector not yet available to them. A population of about 90 million people, and high GDP growth means opportunity for financial services, especially when you take into account that large percentage of its population remains unbanked.

Experts estimate that Ethiopia’s unbanked population could be as high as 85 to 90 percent. As the Ethiopian economy transitions to the international stage, financial infrastructure will have to facilitate access to the various under-served communities.

Telecom Services

Telecommunications is another restricted sector in Ethiopia. More than half of the country’s population still do not have access to mobile phones while internet penetration is below 1 percent largely due to poor infrastructure and very high prices.

What mobile phones and internet could do for a population of that size is evident in the stories coming out of Nigeria and Kenya.

The potential of the telecom market is further evidenced by the Ethiopian government recently introducing mobile services for utility payments.

“Right now, the Ethiopian government is trying to make back the money it paid for access to the fiber optic cable,” says a former Seacom employee, but this should change over time.”

Telecom services would surely be number (1) on our list of investment opportunities if the sector were open to foreign investment. As one insider says, “Telecommunications is just starting to move in the country.” There won’t be a better time to invest in this sector than now.

Heavy Construction

Ethiopia’s infrastructure spending, as a percentage of GDP, is the highest in Africa. The Ethiopian government rightfully makes the delivery of infrastructural services, such as transport and energy, a focus of its development plan. Absent the government’s current and continued focus on infrastructure, the development story of Ethiopia would hit a wall.

Heavy construction sectors, including cement and steel, are the major beneficiaries of this infrastructure build. It is not just the government. All the buildings under construction in Addis are also a clear indication that those with money are investing in property.

Says Tsege, a local resident, “Walking around Addis is like walking through a major construction site.”                                

Agriculture and Food Processing

This is an important industry in Ethiopia. Accounting for over 85% of employment for the people of Ethiopia, agriculture is vital. The agricultural  sector still looks for methods to present opportunities for better farming technology. In fact, 8 million acres are now being offered to commercial farming investors.

There are different types of crops that can be grown in the country ranging from cereals to fibre crops and flowers, to teas and coffee plantations, etc. Forestry is also an important resource in the country along with fisheries. Also, commercial processing of produce and raw materials gotten from agriculture provides an opportunity for business in Ethiopia.

Vending machines

Most people in Ethiopia are always on the move and would not like to waste precious time in the process of buying things. This has led to an increase in the demand for vendors and their machines. A vending machine for the sale of small items like drinks, snacks, water, milk, juice, newspapers, cigarettes, etc. can be installed in different strategic places to meet the immediate needs of people on the go. This is a splendid business idea for busy places like a bus terminus, schools or colleges or even a busy residential area in Ethiopia.