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Which sectors provide the best opportunities for investors in Ethiopia? Africa Private Equity News (download the free mobile app here), recently posed this question to Matthew Davis, CEO and partner of private equity firm RENEW.
Davis says there is a sweet spot in adding value to locally sourced commodities, and then exporting the finished products internationally. He highlights “anything manufacturing that is leveraging a competitive advantage of [Ethiopia], which has really affordable labour and power right now [as well as] some very attractive tax regimes and incentives”.
Another advantage of investing in export-oriented companies is their ability to generate much-needed foreign exchange. According to Davis, Ethiopian banks are so hungry for foreign exchange, they are often willing to give favourable interest rates on loans for companies participating in the export markets.