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Ethiopia: Pakistan's Growing Interest in Ethiopia

The Reporter (Addis Ababa)

April 15, 2006
Posted to the web April 16, 2006

Kaleyesus Bekele


Seven years ago there was not a single Pakistani company working in Ethiopia. "When I came to Ethiopia in 1998 I could not find any Pakistani investor or company," says Mr. Hameed A. Kidwai, roving ambassador to sub-Saharan Africa. Bilateral trade relation between the two countries was non existent.

Mr. Kidwai and Dr. Safdar A. Sohail, commercial counselor at the High Commission for the Islamic Republic of Pakistan, who is based in Nairobi have been trying to bring Pakistani investors to Ethiopia. "We were trying hard to bring a real Pakistani businessman," says Sohail. Mr. Sohail said that Ethiopia was the most elusive country. However, he said five years ago things began to change.

Three years ago a Pakistani company signed a management contract agreement with EFFORT to administer the Messobe Cement Factory in Tigray. "That was the first project in Ethiopia that fell in the hands of our professionals," Mr. Kidwai said. Later on Pakistani firms took over the management of other three companies under EFFORT.

Sibhat Nega, board chairman of EFFORT and a senior TPLF official, is the technocrat in the series of negotiations held between EFFORT and the Pakistanis. Sibhat and Mr. Kidwai played a leading role in bringing expertise and foreign direct investment from Pakistan.

The Pakistanis did not limit their activities in Ethiopia with the management contracts signed with EFFORT. More companies are coming from Pakistan and they are investing in textile, pharmaceuticals and in other sectors. At present there are 20 Pakistani companies in Ethiopia and their investment capital reached 300 million dollars. The bilateral trade relation that started from scratch thrived to almost 11 million dollars. Surprisingly, the trade balance between the two countries is infavour of Ethiopia. Ethiopia's annual export to Pakistan is seven million dollars while Pakistan's export to Ethiopia is about four million. Ethiopia exports cotton, skins and hides and other agricultural products. "Ethiopia could increase its export volume to Pakistan. For the first time we started to import tea from Ethiopia. It could export more coffee and tea to Pakistan," says Mr. Kidwai.

Ethiopia imports fabrics, garments, equipment and other industrial products to Ethiopia. Mr. Kidwai said that his country manufactures aircraft, tractors, different machineries that could be used in modern farming. "He said the price of the tractors and machineries were cheaper when compared to the price of tractors and machineries manufactured by other countries." I wonder why Ethiopia doesn't buy our tractors. Our price is less by 50 percent than the price that other countries offer," he said.

Mr. Kidwai who last week came to Addis Ababa for a working visit met Addisu Legesse, deputy prime minister and Minister of Agriculture and Rural Development, officials of the Ministry of Trade and Industry, Sibhat Nega and other senior government officials. In a meeting held at the Hilton Hotel last Saturday Mr. Kidwai conferred with Pakistani investors working in Ethiopia. Sibhat Nega and Getachew Belay, chief executive officer of EFFORT, attended the meeting.

Mr. Kidwai applauded the Pakistani managers who are leading the management of some of the subsidiary companies of EFFORT for their accomplishment. He told his countrymen that they should not fail in their business mission in Ethiopia, adding that he was always ready to listen to any problem they were facing. "I assure you that we will solve any problem you may face. But you must bring your complaints to our attention. And we will be there to help you. What you have to always bear in mind that you should not fail," he added.

The only problem raised by the investors was the bureaucracy in obtaining entry visa. Some of the investors who established different factories in Ethiopia said that it took them a prolonged time to get a visa for experts coming from Pakistan. "Sometimes we spend 20 to 30 days in dealing with a visa issue. And the delay cost us darely," they lamented. The investors said that Ethiopia was a resourceful country adding that there were many business opportunities. However, they said the business community in Pakistan was unaware of the business opportunities available in Ethiopia. The investors suggested that the Pakistani ambassadors should promote Ethiopia in Pakistan. They also said that Pakistani investors could look in to the mineral resources in Ethiopia.

Mr. Kidwai said that he had already discussed issues related to visa. He said Pakistanis coming to Ethiopia for a business mission could get visas upon their arrival in Addis Ababa. "Whenever you face a problem in obtaining a visa, inform us immediately," he added. Mr. Kidwai said the Ethiopian chamber of commerce was the most inefficient chamber. "We informed the chamber a trade fair to be organized in Pakistan and asked them to send us the list of Ethiopian investors who are interested in participating in the fair. But officials of the chamber did not respond to our invitation. I decided to take ten Ethiopian business people to the trade fair. We will cover their travel and accommodation expenses," Mr. Kidwai said. He further said that he had a firm commitment to promote Ethiopia in Pakistan.

Mr. Kidwai said that a Pakistani delegation comprising representative of mining companies will soon come to Addis Ababa to see the mineral resources in Ethiopia. The delegation will hold a discussions with officials of the Ministry of Mines and Energy. The Pakistani Minister of Foreign of Foreign Affairs will visit Ethiopia next month. The government of Pakistan anticipates to open an embassy in Addis Ababa. At present Pakistan has eleven embassies in Africa.

Sibhat admired the Pakistani's commitment to promote bilateral trade and diplomatic relations with Ethiopia. He said Pakistan's decision to establish relation with Africa was a right decision. "The amount of trade volume doesn't matter. The most important thing is to start the bilateral trade relation. The current relation is a basis for the future. It will be used as a build block," Sibhat said.
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Excellent to see these two nations and africa as a whole trading with each other. this is the way forward! :)
 

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Ethopia has been doing well lately (dispite border clashes with its neigbour) And is growing at about 7% a year. Hopefuly Ethopia will be able to take its proper status since it's Africas second largest Nation.
 

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Musharraf Ka Danda!
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We need to make the exports in our favor!
 

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UnitedPakistan said:
We need to make the exports in our favor!

Classical economic conservatism based on mercantalistic trade policies...

You don't need a Trade surplus with a specific nation to have your citizens better off..
 

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Musharraf Ka Danda!
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*UofT* said:
Classical economic conservatism based on mercantalistic trade policies...

You don't need a Trade surplus with a specific nation to have your citizens better off..
No, thats a bad economic policy!

I think only in the best intrests of my country. If we export more that means Pakistan is increasing the amount of products it makes and the economy as a whole will grow. If we import more we will lose jobs and money. That too from a nation like Ethopia! :sleepy:
 

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UnitedPakistan said:
No, thats a bad economic policy!

I think only in the best intrests of my country. If we export more that means Pakistan is increasing the amount of products it makes and the economy as a whole will grow. If we import more we will lose jobs and money. That too from a nation like Ethopia! :sleepy:
Trust me...unless things change, Pakistan will probably see a trade surplus with Ethiopia, but it is better to have equal parity with your trade partner. It would be like cheating Ethiopia if they had to buy more from you than vice-versa.

Anyways, thats good news...not only for Ethiopia.

If Somalia gets it's act together (and end this endless war bullsh*t) it could benefit from this trade. Ethiopia is landlocked, and Somalia has the longest shoreline in Africa, they could use our ports to export goods instead of using little Djibouti...
 

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Prince of Persia
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jup the african horn has the potential but not the situation...
 

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kronik said:
So are you here to celebrate this trade relation or look down upon Ethiopia?
clearly he sees ethiopia and it's people as inferior to pakistan and it's people. many non-africans have that mindset.
 

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..but these mindsets will change in the coming years with more african oil producing nations getting richer and richer

if Zimbabwe and Côte d´ivoire could only one day join the race again and dump their silly dictators who shamelessly ruined those two beautiful countries..Africa is ready for take off

Giant of Africa: South africa

new rising African giants: Nigeria and Angola

middle "powers": Kenya, Ghana, Senegal, Tanzania, Mozambique (?)

ruined former african stars (relatively undestroyed infrastructure in place): Côte d´ivoire and Zimbabwe

small well established countries, economically: Botswana, Gabon, Namibia, Mauritius, Equatorial Guinea, Cap Verde, Seychelles

sleeping giants: Republic of Congo and Sudan

if these countries rise and stabilize, it will drag along the entire continent and people will stop to look down on Africa :)
 

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shayan said:
jup the african horn has the potential but not the situation...
It does really...:eek:hno: It disturbs me to see that region contiuously fall behind the rest of the world..and other regions of Africa...

UnitedPakistan, you don't need to have a trade surplus with other countries for your economy to grow. Look at the US, which has some severe trade deficits, our economy grows faster (except China) than the countries that we have the deficits with.

Besides, Ethiopia is a MINOR player in the global economic market. If Pakistan does have a trade deficit with Ethiopia. It wouldn't make much of a difference.
 

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Matthias Offodile said:
..but these mindsets will change in the coming years with more african oil producing nations getting richer and richer.....
perhaps, but remember some people will never change, they may become less open but they won't change. but i wonder about pakistanis, i had a coworker once with a similar mentality.
 

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Matthias Offodile said:
..but these mindsets will change in the coming years with more african oil producing nations getting richer and richer

if Zimbabwe and Côte d´ivoire could only one day join the race again and dump their silly dictators who shamelessly ruined those two beautiful countries..Africa is ready for take off

Giant of Africa: South africa

new rising African giants: Nigeria and Angola

middle "powers": Kenya, Ghana, Senegal, Tanzania, Mozambique (?)

ruined former african stars (relatively undestroyed infrastructure in place): Côte d´ivoire and Zimbabwe

small well established countries, economically: Botswana, Gabon, Namibia, Mauritius, Equatorial Guinea, Cap Verde, Seychelles

sleeping giants: Republic of Congo and Sudan

if these countries rise and stabilize, it will drag along the entire continent and people will stop to look down on Africa :)

When Somalia becomes better (it's less if, and more WHEN), I can see it as "middle power". As for Congo, yeah, that is a sleeping GIANT.

You can add Ethiopia to that list of sleeping giants.
 

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Prince of Persia
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Somalia would do better if the tribal BS got dealt with, i mean even in the west different "clangs" dont want to party or anything with one a nother. Why is somali land doing so good? because they have a system hopefully the rest of somalia will learn fast.
 

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Somaliland is doing good because, for the lack of a better word, it is not diverse. Almost everyone is the same clan. And they have peace...which breeds success.

The southern part, is much more diverse, so that builds up rivalry, the land is much more fertile also. So there is no peace, but when it comes, it will takeoff.

This war is BS for sure, I would like to not be dead at 70 and see it still like this.

I fear that may happen...the "leaders" are too selfish and hard-headed, and the people are too weak and follow them like sheep.
 

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Ethiopia may appear to be stable but it is not. 90% of the people want to form their own smaller countries and there are several resistance groups operating in the country.

And Rotten, the Somali/Ethiopian relationship is like the Pakistan/India or Arab/Israeli one. Most Somalis would not like the idea of Ethiopia using their ports
 

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Prince of Persia
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Why doesnt Djibouti get back into somalia again?
 

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Because Djbouti was in a tug of war between Somalia, Ethiopia, and France for a while. Both Somalia and Ethiopia claimed Djbouti and tried to annex it but they both failed in the end. There was a vote in Djbouti after independence and over 90% voted to remain their own country. It has become important to Ethiopia again now that Eritrea broke away and wont let them use their ports.
 
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