FOREIGN DIRECT INVESTMENT: IS IT LURE IN ETHIOPIA?

Parimalarani Ganesan

Abstract


ABSTRACT

Foreign Direct Investment (FDI) plays a vital role in the development of an economy. Many least developed countries in the world has taken FDI as the key weapon for improving its economic growth and they are giving keen interest in attracting the FDI. Ethiopia is one of the fastest growing nations in Africa; it needs more investment in the form of FDI. The World Bank report regarding doing business for the year 2013 ranked Ethiopia at 127th place out of 185 countries. Ethiopia has many positive features like provision of incentives on investment, country is rich in renewable energy, have cheapest labour cost, and youth unemployment is 50 per cent added to this major economic sector are liberalized for investment. From the study it is quite visible that in the East African region Ethiopia places itself in third position in attracting the FDI. It is identified that through the FDI in the year 2013 the country generated 42,509 permanent employment and 1,20,630 temporary employment. By taking this as background the study made an attempt to know whether FDI is attractive in Ethiopia or not?

Key words: Foreign Direct Investment, Employment and Economic growth


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