Ethiopia’s Foreign Investment Stalls After Attacks on Businesses

Addis Ababa (Capital Markets in Africa) – Foreign investment in Ethiopia is stalling after a series of demonstrations against international companies.

Investment was about $500 million in the three months ended Oct. 10 compared with the same period a year earlier, according to Investment Commissioner Fitsum Arega. Foreign investment had gained 20 percent a year on average for the past six years, including a 50 percent jump last year, he said by phone from Addis Ababa, the capital.

Ethiopia declared a state of emergency on Oct. 8 after businesses were attacked by foreign-backed protesters in the Oromia region. The attacks followed the deaths of about 100 people from the Oromo ethnic group on Oct. 2, when the forced dispersal of a protest at a cultural celebration caused a stampede. Groups have demonstrated in the area since November 2015 amid claims of state repression and marginalization.

U.S. apparel maker PVH Corp. is investing in a newly built state-owned Hawassa Industrial Park, Fitsum said. There were no new agriculture investments during the period, according to Fitsum. The government treasury is offering “financial support” to attacked companies, as long as they commit to continue operations, Fitsum said.