Opportunities and Challenges of Investment in Ethiopia: A case of North Shoa Zone of Amhara Regional State

Abstract

This study has examined the opportunities and challenges of investment in North Shoa Zone of Amhara Regional state of Ethiopia. The study adopts a qualitative type of research design. Specifically the study surveys 50 investment projects conveniently (ten percent of the total population of more than 490 investment projects). Also out of the 27 districts found in North Shoa Zone, 8 districts (Weredas) were selected as a sample purposively. The findings of the study revealed that North Shoa Zone is becoming one of the best investor destinations in Ethiopia in general and in Amhara Region in particular. The main reason for this is that; the Zone has so many investment opportunities in all sectors, favorable weather condition, availability of industry zone in Debre Berhan town, nearness to the capital of the country and port Djibouti, better bureaucracy, favorable investment policy, supply of land free of tender for industry sector, better infrastructures, better supply of raw materials, nearness to the market, availability of labor, Customs duty payment exemption on capital goods and construction materials, Income tax exemption from two to seven years, etc. even though the aforementioned factors attract investors to the Zone, there are also some challenges that hinder the investment activities of existing and potential investors. These are; elongated bureaucracy in some offices, lack of decision making capability by some officers, shortage of sufficient loan supply, contentious power interruption, shortage of foreign currency, unfair tax assessment, limited supply of qualified labor in some fields, road and transportation shortage in some districts, less government supervision, incentive, and follow-up, shortage of raw-materials, lack of quality on some raw materials supplied locally, limited market linkage.