Foreign direct investment dropped 20% to $1.2 billion in six months through December. Foreign companies receive financial compensation for damages
By Nizar Manek (Bloomberg) |
Foreign direct investment in Ethiopia dropped by a fifth in the first half of the country’s fiscal year after violent anti-government protests in which foreign-owned businesses were targeted.
The country attracted $1.2 billion in the six months through the end of December, compared with $1.5 billion in the same period a year earlier, Fitsum Arega, commissioner of the Ethiopian Investment Commission, said in a phone interview Monday from the capital, Addis Ababa. He said the government may miss its annual target of $3.5 billion, with $3.2 billion more likely to be attainable.
The government of Ethiopia declared a state of emergency in October to deal with unrest accompanying protests by ethnic Oromo and Amhara communities that began in late 2015 over the alleged dispossession of their land, political marginalization and state repression. Businesses including those owned by Nigerian billionaire Aliko Dangote and Dutch fruit processors were attacked during the unrest. The security forces killed at least 600 demonstrators, according to the Association for Human Rights in Ethiopia.
Ethiopia, one of Africa’s fastest-growing economies, is expected to expand 7.5 percent this year, compared with an average of 9.1 percent over the past five years, according to the International Monetary Fund. Opponents of the government argue that Ethiopia’s economic gains haven’t been matched by increased political freedoms since the ruling party cracked down on the opposition in 2005, after losses in that year’s elections.
The government is paying out damages to foreign and domestic companies deemed affected by the unrest, with 100 million birr ($4.4 million) already disbursed and “more in progress,” Fitsum said. Claims were received from at least 20 domestic companies. At least two foreign businesses were successful in making claims from insurance companies, while the government is also providing tax relief to operations that sustained damages during the violence, he said.
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