Investing in Ethiopia

"It is only the farmer who faithfully plants seeds in the Spring, who reaps a harvest in the Autumn."  BC Forbes

Unmatched ROI... 

The IMF forecasts that in the next five years emerging economies will grow at an average of 6.8% a year vs. 2.7 for the developed economies, underpinning global economic growth for the foreseeable future.  Small wonder then that Wall Street and other financial entities have cheered this trend by sinking 7 trillion dollars into emerging market funds that are focused on these opportunities.  To be sure, much of this interest to date has centered on a small group of stalwarts such as Russia, India, Latin America and South Africa.  But recent trends indicate an increasing level of interest in other African countries on the strength of some of the best returns of the year outpacing the overall emerging market index. 

"The adoption of sounder macroeconomic policies in Africa increased consumer spending, and Chinese demand for the continent's commodities have fueled solid growth, spurring expansion in telecommunications, retail banking and other service sectors." (African Stocks Outpace Emergent Peers, The Wall Street Journal Online, October 2, 2006).

   

The Information gap...

To be sure, investing in such markets is hardly risk free.  In fact, in the very same article referenced above, WSJ notes the nature of these risks highlighting the lack of "Reliable information about companies and stock movements..." as one of the challenges investors face in these markets.   The latter challenge may in fact be even more acute where Ethiopian companies are concerned due to the lack of a formal stock exchange that enables equity stakes in existing businesses along with sufficient liquidity to facilitate such investments.  This necessarily means that investment in Ethiopian companies is more likely to be one in which an investor provides direct funding to a business in exchange for an equity share or some other mutually agreed upon financial benefit. 

Emergent can help fill the gap in information access that characterizes the Ethiopian investment market. Utilizing our combination of assets on the ground with our familiarity of business practices in the global economy, we can assist your direct investment efforts in Ethiopia by offering the following:

• Extensive information on the regulatory framework (requirements, incentives, tax law, profit extraction, etc.) of foreign based investment in Ethiopia
• Business establishment, due diligence, feasibility study and related services
• Investment advice & assistance on investment opportunities, favorable sectors, joint ventures, financial intermediation and optimal business structuring
• Advice on risk mitigation strategies and facilitation of specific mechanisms such as those provided by multilateral agencies including MIGA and OPIC (US based investments)
• Pre-screen companies that meet your specific requirements such as sector, size, operating history, management structure and willingness to follow acceptable governance models and oversight where equity based investing is desired
• Facilitate discussions and contractual agreements

Drop us a line and let us know what your needs and/or interests are - there are few 'one size fits all' solutions for such investment so we will try to come up with the best fit for your particular needs.

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