Mekelle, Ethiopia - Millennium Cities Initiative - Columbia University

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26 Mekelle, Ethiopia: Potential Opportunities for Investment The number of visitors to Tigray state has grown at an annual rate of 24 percent per annum over the period 2002 to 2008 and there is significant potential for a further increase. 1 Tigray State received approximately 15,600 tourists in 2002 and 57,500 tourists in 2008. Total receipts from foreign visitors reached 467 million Birr in 2007 (about USD50 million). Although Axum still accounts for the majority of tourists coming to Tigray State, there has been an increase in the average number of days spent by foreign visitors in Tigray (from 1.7 days in 1994 to four days in 2007) which indicates that tourists include other Tigray attractions in their trips particularly the world famous rock-hewn churches. Despite its high potential and fast growth, the tourism industry in Tigray State is underdeveloped. In 2007, the state accounted for only seven percent of the total number of foreign tourists visiting Ethiopia 2 . Customer profile There are two main groups of foreign tourists coming to Mekelle for non-business purposes. Retired people from Europe (mainly German, Italian and French) coming with the purpose of cultural tourism. This group of visitors is very price sensitive; the main purchasing criteria for them are moderate accommodation cost and high level of services provided. Expatriate population coming from Addis Ababa for weekend or short vacations. The main purchasing criteria for this customer group is an appropriate level of services provided and a wide range of additional services at a reasonable price (car rental, guard services, etc.). There is potential demand from young visitors interested in adventure tourism within Tigray State and the Afar depression area. This group of tourists demands low cost accommodation with easy access to natural attractions. Lack of quality lodge accommodation There is only one high-quality lodge run by an Italian investor currently operating in Tigray State (Gheralta Lodge in Hawzien). The lodge has 100 percent occupancy in the high season (some of the rooms are booked several months in advance) which indicates a supply shortage of quality lodge accommodation in the Mekelle region. There are a number of motel-style lodges in the Mekelle region but the services they provide are not in line with the ecotourism concept. One investor from the UK has started preparatory work for construction of a lodge in the Hawzien area. The Tigray Investment Office has stated it has been contacted by four other investors expressing interest in lodge development in the Mekelle region. There are plans for the construction of five tent lodges within the Millennium Villages Ecotourism project aimed at the development of community-based ecotourism in Tigray State. The total expected investments in the project amount to USD1.5 million. Possible activities at the sites include horse riding, rock climbing, trekking and cultural tourism 3 . Source: 1. KPMG in Ethiopia interview programme, 2009 2. Tigray Investment Office, 2009 3. Africa News, March 19, 2008 © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Tourist attractions in the Mekelle region Simien National Park To Asmara Humera To Gonder Sheraro Indasilassie To Gonder Simien National Park (UNESCO World Heritage Natural Site), which has one of the most spectacular landscapes in the world, lies in northern Ethiopia, 740 km from Mekelle. More than 120 rock-hewn churches and monasteries are located within 80–150 km of Mekelle. Most of them are almost a thousand years old but still underexplored because they were only opened to the public in the 1960s. The Afar Depression is the lowest point in Ethiopia (more than 100 metres below sea level). Several natural attractions are available in this area, such as salt lakes and waterfalls. Visitors can also observe camel, mule and donkey caravans. This area is populated with nomadic people. Al Negashi mosque, the most important site for Islam in Africa, is located within 60 km of Mekelle. The ancient city of Axum (UNESCO World Heritage Site) is situated about 150 km from Mekelle. Axum is famous for its stella and ruins of palaces, and is the spiritual centre of Orthodox Christianity in Ethiopia. Source: Tigray Investment Office, 2009 KPMG in Ethiopia interview programme, 2009 Mekelle, Ethiopia: Potential Opportunities for Investment 27 Axum Abiadi To Sokota Adwa To Asmara Mekelle Adi Gudom Maychew Korem Alamata Adigat Wukro Afar State To Addis Abada © 2010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Page 1 and 2: Mekelle, Ethiopia Potential opportu
Page 3 and 4: Foreword As part of KPMG’s Global
Page 5 and 6: The Mekelle region presents attract
Page 7 and 8: Challenges • • • • • •
Page 9 and 10: Introduction to MCI The Millennium
Page 11 and 12: Investment climate in Ethiopia Meke
Page 13 and 14: Investment trends The government le
Page 15 and 16: Key inhibitors Mekelle, Ethiopia: P
Page 17 and 18: Introduction to Mekelle The Mekelle
Page 19 and 20: Supportive state government policie
Page 21 and 22: Infrastructure The Mekelle region i
Page 23 and 24: Mekelle airport Mekelle airport (Al
Page 25: Mekelle, Ethiopia: Potential Opport
Page 29 and 30: Mekelle, Ethiopia: Potential Opport
Page 33 and 34: Trade value of exports of meat and
Page 35 and 36: Meat quality certification is a pre
Page 37 and 38: There is high potential for supply
Page 39 and 40: Case study: Comel Honey Processing
Page 41 and 42: There is potential for export of Et
Page 45 and 46: There is significant potential to s
Page 49 and 50: The construction industries of Ethi
Page 51 and 52: The government has developed libera
Page 55 and 56: kpmg.com Contacts Stefan Dierks, Pa

Mekelle, Ethiopia - Millennium Cities Initiative - Columbia University

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