By Andualem Sisay | AfricaNews
Addis Ababa, Ethiopia – Turkey is now planning to join the mining and energy development sector of Ethiopia after years of investing in the textile sector.
Last week, a Turkish business delegation led by Turkish Minister of Transport, Binali Yyidrym, visited the Ethiopian Ministry of Mines and Energy and held a meeting with senior officials of the ministry.
The delegation was briefed by Alemayehu Tegenu, Minister of MME, about the investment opportunities in the mining and energy sector. The Minister discussed with the delegation about the precious and industrial mineral resources and the immense hydro-power potential Ethiopia has.
Gold, marble, limestone, and small amounts of tantalum are among the major natural resources mined so far in Ethiopia. Of these minerals, gold, which provided US$12.5 million to the economy in 1996, and is expected to generate a total of 1.6 billion USD up to 2020, is among the most significant contributor to export earnings of the country.
In addition, several foreign companies have signed exploration of natural gas and product sharing agreement with the Ethiopian Ministry of Mines and Energy and are currently drilling wells in different parts of the country.
The Turkish delegation arrived in Addis Ababa on Tuesday to participate at the fifth Ethio-Turkish joint economic commission meeting.
Speaking at the meeting, Minister of Trade and Industry Grma Birru said the bilateral trade between the two countries had grown by 46 percent between 2000 and 2007 to $182 million.
Investments
Ethiopia mainly exports sesame and leather to Turkey while Turkey exports steel and steel products, electronics and other industrial products. The number of Turkish companies, particularly those dealing in textile and garments, investing in Ethiopia is increasing.
From January-June 2008 alone, some 19 Turkish companies with an aggregate capital of 3.79 billion birr (around $379 million) have received licenses to engage in business in Ethiopia.
Relations
Relations between Ethiopia and Turkey, which go as far back as 1557, was strengthened in the early 20th century and weakened in 1975 with the closing of the Ethiopian Embassy.
However, they strengthened in 2005 with the visit of Turkish Prime Minister Tayyip Erdogan, which led to the reopening of the Ethiopian consulate in 2006; that same year, Turkish Airlines started flights to Addis Ababa.
The aim is to raise trade between the two nations, which is currently at 200 million USD, to 500 million US$ by 2011.
Last month, a Turkish businessman won a contract worth 90 million USD; this increased the average trade balance between the two counties from 200 million to 300.
The increase in the export of Ethiopian agricultural products, such as green lentils and hides is expected to scale up the trade relation between the two sides to reach the 500 million mark.
According to Yusuf Adeniz, Chairman of Ayka Addis textile and Investment Group, Ethiopia is in a position to capitalize on the knowledge sharing and investment support being given to it by Turkish businessmen, who would add value to the nation’s manufacturing sector, particularly textiles.
Ayka is currently constructing a textile company in the town of Alemgena – located on the outskirts of Addis Ababa – with an investment of over 100 million USD. Once operational, the company envisions increasing its current 800 employees to 10,000.
Textile player
Briefing members of the Ethiopian media who were visiting Istanbul last month, Adeniz noted that for Ethiopia to really become a global textile player, policies and procedures should be fine-tuned to help meet projections. According to the chairman, red tape, lengthy custom clearance and financing problems impede Ayka’s target export of $200 million annually.
According to the chairman, red tape, lengthy custom clearance and financing problems impede Ayka’s target export of $200 million annually.
Contrasting the incentives given for exports in Turkey, Adeniz pointed out the need for Ethiopia to re-examine the existing policies in regards to customs and financing and make adjustments to create an environment where textile export potentials could be tapped into.