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Abundant opportunities in Ethiopia

By William Gaviyau

Ethiopia is a country that is in the horn of Africa and has an estimated population of 127 million as of 2023, making it the second most populous country in Africa after Nigeria.

The country has a ten-year development plan that is supported by the various economic strategies such as Homegrown Economic Reform Agenda (HGER II).

The key sectors of Ethiopia’s economy are services, agriculture, and mining.

Ethiopia is a signatory to several trade agreements with COMESA and AfCFTA being the shared agreements with Zimbabwe.

To understand the key opportunities in Ethiopia, ZimTrade conducted a market survey of the market this year, with identified sectors with opportunities including horticulture, building and construction (services), and processed foods.

There are several issues to consider when targeting the market, such as population, and logistics.

Ethiopia has a population of more than 120 million, which means a strong marketing strategy must be developed for products targeted a wide range of consumers.

There is also need for companies to consider activation sales and monthly promotions and tastings to push their brand visibility.

Entry into the retail sector or FMCG requires that companies enter into distributorship agreements with established retail distributors in the country.

Since Zimbabwe products are known to be of non-GMO this serves as a comparative advantage to enter the market and taking into consideration the different consumer tastes.

Local presence also helps in dealing with associated consumer issues.

In the short run, dealership entry model can be used with the longer-term view of setting up operations through joint ventures in Ethiopia.

For companies to break-through and reap meaningful benefits they must have a presence in the market.

From the survey it was noted that registration of foreign companies in Ethiopia takes shorter period.

There is also need to leverage on huge diplomatic presence in Addis.

Africa Union has its headquarters in Addis and several international cooperation agencies.

This means that a huge number of foreigners require consistent food supplies that are almost like their countries of origin.

Thus, for this niche market, companies can leverage on the foreign community and use them as a springboard for entering the market.

Companies can also take advantage of tenders, which are open to foreign companies.

Ethiopia is developing its infrastructure and has tenders that require foreign participation.

The types of tenders in Ethiopia are for construction projects, consultancy services and supply provisions to contracts.

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