Investment Policy Review Ethiopia - Unctad

Report on the Implementation of the Investment Policy Review Ethiopia
issues led to its eventual disbandment. More recently, a National
Coordinating Committee, chaired by the Deputy Prime Minister, has
been created. Together with its sub-committees, it will assist the EIA
and RIBs with their investment promotion efforts and to analyze FDI
inflows to the country.
3.5. Restructure regional investment bureaus.
The structure of RIBs was found not to be best suited for
investment promotion in the IPR assessment. These agencies
tended to be under-resourced, particularly in relation to skilled
human resources and essential investment promotion skills. Their
work was dominated by bureaucratic matters and primarily dealt
with domestic firms. Furthermore, RIBs in peripheral regions can be
at a disadvantage as the majority of foreign investors prefer to
locate in or near Addis Ababa. The investment law gives the EIA
and the RIBs clear respective mandates. While the mandate of the
latter is to promote and facilitate domestic investments in their
respective regions, the EIA’s mandate is to promote and facilitate
foreign investments, joint ventures and investments whose business
licences are issued by the Federal Government. Consequently, the
RIBs issue investment permits for domestic investors while the EIA
does so for foreign investors. While occasionally some RIBs had
circumvented the EIA and directly undertook FDI attraction activities,
this practice no longer happens.
In an effort to better utilize the resources of RIBs, the IPR
recommended that they be restructured as regional development
agencies (RDAs). The development agencies would rely on the EIA
to act as the dedicated agency for serving both greenfield and
existing foreign investors. The RDA, in turn, would provide support
to investors attracted by the EIA in areas such as land availability
and permitting, infrastructure and labour. There has been some
movement toward restructuring the RIBs, and collaboration with the
EIA has improved. In fact, they organize a joint forum twice a year to
discuss issues related to the approval and implementation of
investment projects, exchange experiences and streamline the ways
in which they render services to investors.
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