The 50th anniversary of the establishment of diplomatic relations between Ethiopia and Canada is being celebrated both in in Addis Ababa and Ottawa by holding different events. Although Canada and Canadians are well known to Ethiopians much longer than that, 2015 marks 50 years since they commenced their formal diplomatic relations in 1965.
The Embassy of the Federal Democratic Republic of Ethiopia to Canada located at 275 Slater St. suite 1501 represent Ethiopian interest in Canada. Likewise Canada has an Embassy in Addis Ababa. The two countries enjoy a strong political economic and people to people relations. Ethiopia considers Canada as one of its reliable allies in its fight against poverty. Ethiopia is a focus country for Canada’s international development assistance. Canada’s bilateral development cooperation program is an important component of Ethiopia’s development efforts in the areas of food security, agricultural growth and sustainable economic growth. Recently both countries are working hard to broaden trade and investment relations between the two countries.
Ethiopia has one of the fastest growing economies in the world which managed to maintain an average 11 percent GDP growth rate for more than a decade. Ethiopia just concluded its first cycle of the five- year economic transformation plan – The Growth and Transformation Plan (GTP I) and has just embarked upon the GTP II that will mainly focus on industrialization.
As infrastructure expansion is one of the central pillars of the GTP, road construction, railway construction and the construction of hydro, Wind and Geothermal projects are well underway. The construction of the Grand Ethiopian Renaissance Dam, with power generating capacity of 6,000MW is progressing as per schedule.
Current data on trade flows and investment relations between Canada and Ethiopia are modest but for sure have a tremendous potential for growth. Recent years have shown enhanced trade and investment interest between Ethiopia and Canada. In 2014-2015 there was an Ethiopian trade and investment delegation visiting Canada and a Canadian business mission visiting Ethiopia.
In 2014 the two-way trade volume between the two countries came to 161,507,281 CAD with 136.9 million Canadian exports to Ethiopia and 24.5 million Ethiopian exports to Canada. The data for 2013 shows that Canadian exports were 21,228,104 while Ethiopian exports to Canada were 17,824,837 CAD. In some years high amount of Canadian exports are attributed to the high-value nature of products like aircrafts. Ethiopian Airlines imports the Q400 aircraft from Bombardier. Bombardier has also set up a regional maintenance facility for the Q400 aircraft in Addis Ababa. Apart from aircrafts Canadian exports to Ethiopia are mainly of machineries, spare parts and chemicals. Canada’s imports from Ethiopia consist mainly of agri-food products, such as coffee, spices, oilseeds, leather and leather products, textile products, cut flowers and vegetables.
In January 2010, Ethiopia and Canada concluded an Air Services Agreement that led to the commencement of Ethiopian Airlines flights from Addis Ababa to Toronto in July 2012. Currently there are three flights per week connecting Toronto to Addis Ababa and to through Addis to 49 destinations in Africa.
There is a Memorandum of Understanding signed between Canada and Ethiopia in 2003, which allows Ethiopian exports of textile and apparel goods tariff-free access to the Canadian market. Through this provision we would like to see more Ethiopian made textiles and garment exports to the Canadian market. Nowadays Ethiopia is emerging as a favoured destination for apparel makers. Canadian fashion and garment companies could setup manufacturing plants to make use of the available low cost labour and power for manufacturing.
In terms of Investment, Canadian Investment to Ethiopia is mainly in the extractive sector, close to 15 Canadian companies are licensed and exploring various minerals including potash and base metals. Recently we are closely working with Canada in capacity building of our extractive sector.
Ethiopia offers attractive investment opportunities for Canadian companies. The Ethiopian Investment Commission provides a one-stop shop service for investors. Ethiopia is signatory of Multilateral Investment Guarantee Agency (MIGA) and World Intellectual Property Organization (WIPO). The signing of FIPA (Foreign Investment Protection Agreement) between Ethiopia and Canada is under discussion.
Ethiopia would like to see more Canadian investors taking part in the industrialization of the country during the GTP II period. There are industrial zones awaiting foreign investors. There are plenty of business opportunities for Canadian companies who are interested on the massive infrastructural projects underway in Ethiopia. GTP II will see construction of more power generation projects, roads and railway construction.