Permitting foreign firm’s involvement in the import, wholesale and retail business, which was restricted to local companies, would bring a new dynamism in Ethiopia’s economy, well-noted experts said.
Speaking to the Ethiopian Press Agency (EPA), Ethiopian Economics Association’s Senior Researcher Arega Shumetie (PhD) stated that the opening up of the local market for foreign actors would bring multilayered benefits including expediting job creation and FDI inflow and easing the rampant Forex crunch.
Apart from the above outcomes, the measure is instrumental to facilitate technology and knowledge transfer, stabilize market, and encourage domestic investors to excel their activities, the researcher elaborated.
According to Arega (PhD), foreign investors’ participation in the local market would bring a significant outcome in importing strategic commodities, widening alternatives, encouraging competitiveness, and arresting the pressing inflation. “To realize this goal, the government needs to put in place a meticulous and proper implementation system.”
Addis Ababa University’s Economics Professor Alemayehu Geda, who mentioned the 10 percent profit margin of many countries with a healthy business system, stressed that the involvement of foreign companies in the aforementioned areas is a solution to Ethiopia’s hyper-inflated market and ensure competitiveness.
“For example, Kenya has two big retail centers and everyone is buying commodities from there. As a result, in the last 15 years, the price increase in some items has been less than 30 percent.”
Prof. Alemayehu stated; however, that equal attention should be given to encourage domestic firms’ involvement in the import, wholesale and retail business that would create a balance in the market.
Indeed, encouraging consumer associations would also have a significant impact to curb the soaring cost of living that has been immensely affecting the society especially those in the low-income bracket. Similarly, the government should create enabling environment to foreign investors to do business here without any hesitation, the scholar stressed.
BY MESERET BEHAILU
THE ETHIOPIAN HERALD SUNDAY EDITION 21 APRIL 2024