National coffer

Newsletter 9

INVESTMENT ACTIVITIES AND INCENTIVES OF SOUTHERN NATIONS, NATIONALITIES AND PEOPLES REGIONAL STATE

Since Ethiopia adopted a free market economic policy in 1992, the Government has implemented a wide range of economic reforms aimed at   promoting economic liberalization and encouraging private investment. 

In order to enhance private investment in the SNNPRS, the Regional Investment Code has been revised recently. As a result, various bottlenecks related to investment are addressed. The untapped resources, a host of investment opportunities and the existing conducive climate of investment have attracted many investors to the region. 

Over the last years up to June 2005, a total of 1319 projects were issued with licenses to engage in different economic sectors.  

Out of the total, 248 (18.8%) are engaged in agriculture, 628(47.6%) in industry, 106(8%)construction, 274(20.7%) and services while the rest 63 (4.7%) are involved in various other sectors. These projects with a total capital amounting to ETB 9.0 billion employ a total of 129,651 skilled and semi-skilled manpower when they begin production with full capacity.  

But compared to the resource base and potential of the region, vigorous promotion has to be carried out to lure more investors. 

Incentives Granted at the Regional Level 

Incentives that are granted to investors engaged in different investment projects at regional level can be summed up in general as:

  • Exemption from the payment of customs duties,

  • Income tax exemptions,

  • Rural land rent holding for some type of development projects

  • Priority in servicing investment sites,

  • One-stop-shopping  for investors

  • Low rural land rent per hectare per year i.e. a minimum of birr 30 and maximum payment of birr 117per hectare per annum.

  • Reasonable lease rent ranging from 0.10-0.80 cents per sq meter designated in the reform towns of the region.

Besides, currently the regional state is promoting certain manufacturing and agro-processing industries (such as coffee roasting and packing, spice extrication, leather and leather products, food complex, meat processing, textile e.t.c) that have comparative and competitive advantages and is ready to release attractive incentives. 

In addition to the incentives regarding land rent for agricultural investment in rural areas, special incentives are granted giving due attention for perennial and annual crops both on rain-fed and irrigated development as well as mixed agriculture, animal husbandry and forestry   development. Apart from agriculture, low land rent was introduced for projects engaging in tourism and industry sectors in rural areas.

 

No

TYPES OF SERVICE

DELIVERY

TIME

SERVICE FEE(ETB)

 

1

Issuance of Investment Permit

  • New Investment
  • Expansion Investment

 

1 hour

 1 hour

 

600

300

 

2

Renewal of Investment Permit

  • New Investment
  • Expansion Investment

 

30 minutes

30 minutes

 

200

200

 

3

Substitution of lost or damaged investment permit

1hour

100

 

4

Issuance of trade registration certificate

Principal registration

  • Application format
  • Certificate
  • Registration

Issuance of Business License

  • Application Format
  • ID
  • License

 

 

1hour

-

-

-

 

-

-

-

 

 

4

4

100

 

4

3

200

 

5

Acquire Investment Incentive

1 hour

-

 

6

Investment application format

-

Free of charge

 

7

Information

-

Free of charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           Source:-SNNPRS Bureau of Investment 2005