Decline in overseas investment

Ethiopia is still struggling to attract overseas investment compared to other African countries, according to the United Nations. The UN’s Conference on Trade and Development (UNCTAD) revealed that last year Foreign Direct Investment (FDI) amounted to just US $20 million – the lowest level for almost a decade. The figure shows a marked decline on previous years where Ethiopia attracted over US $200 million per year. But the war with Eritrea sparked a massive downturn. Economists believe that the right economic policies and climate are in place but a world slowdown and the bitter two-year conflict with its neighbour had major implications for the economy. Other Horn of Africa countries have seen major increases in investment, like Sudan which last year attracted some US $574 million – mainly for the oil business. According to UNCTAD’s World Investment Report for 2002, sub-Saharan African broke through the US$10 billion mark for the first time ever in attracting overseas investment. “Three countries -- Angola, Mozambique and Sudan – together accounted for the lion’s share of the total increase,” UNCTAD said. The majority of the flows come from the United States, France and the United Kingdom, the report added.