ITC Executive Director keynote address at the inauguration of KPR Export Garment Factory (en)
Mekelle Industrial Park
13 May 2019
Today is an important day for all of us. This is global cooperation is action. At a time when some are questioning the value of trade, partnership and cooperation, and when some are turning inward and closing borders, we here in Mekelle today are sending the message that cooperation is alive and well. That trade brings growth, employment and opportunities.
I thank KPR Export and Mr. KPR himself for being here. Your investment is already bearing fruit and I am delighted to be with you today as we inaugurate this factory. I wish to recognize the role played by institutions’ and individuals in Ethiopia, and elsewhere, who ensured that KPR’s investment plans were translated into what we see here today. The Ethiopian Investment Commission, the Federal Ministry for Trade and Industry, the Ethiopian Textile Industry Development Institute, the Ethiopian Industrial Parks Development Corporation, the Ethiopian Textiles and Garments Manufacturers Association, the Regional Government in Tigrai and its constituent institutions are all to be commended. In India, the effort to generate investment to Ethiopia’s textiles and garments sector were ably supported and facilitated by the South Indian Mills Association, the Tirupur Exporters Association, the Confederation of Indian Textile Industry, the Federation of Indian Chambers of Commerce and Industry, and the Embassy of India in Addis Ababa, and the Embassy and Consulate of Ethiopia in New Delhi and Mumbai respectively.
I have dwelt at length addressing that long list of institutions to emphasise that investments do not happen in isolation, they do not flow due to the laws of gravity, but require the efforts and specialized inputs from experts behind these institutions founded, and mandated, to promote socio-economic development and cooperation, nationally, and beyond borders.
Speaking for the International Trade Centre, a joint organization of the United Nations and the World Trade Organization, what we specialize in doing is bringing the diverse skillsets required for enhancing global trade and investment together and ensuring that capacities are enhanced, are fit for purpose and focused, and operational abilities and impact are maximised.
This is best exemplified through our Supporting Indian Trade and Investment for Africa (SITA), programme which has worked with KPR and myriad institutions in Ethiopia and India to catalyse this investment. SITA started implementing its mandate, in Ethiopia, in 2015. However for a year before that, starting in 2014, the team that was designing SITA engaged with over 400 stakeholders across five East African countries and India to ensure that the project was aligned with the national priorities of Ethiopia, Kenya, Rwanda, Tanzania, Uganda and India. I remember attending part of one such design consultation in Addis Ababa in December 2014, where the energy was palpable and creative thinking tempered with realism abounded. The inclusive, evidence-based, design is what ensures that projects such as SITA succeed in their objectives through working closely with partners across countries and sectors. Through analysing the gaps in the offering of partners, and identifying, designing, and implementing products and solutions to ameliorate the gaps, results are delivered.
If we take the example of the KPR investment, the products, services, and events that went into arriving at where we are today included analytical and information products – the Textiles and Clothing Roadmap designed and developed by Ethiopian stakeholders led by ETIDI (I recognize the presence of Ato Sileshi Lemma D-G in our midst today) and ETGAMA, which set the trade and investment priorities for Ethiopia, and was adopted nationally in 2016; and the investment profiles and brochures that were jointly developed, to market Ethiopia as a destination for investment flows from India to address information gaps on opportunities and the business environment. Between 2017 and 2019 there have been three investment promotion missions and Managing Director of KPR Mill Mr. Natraj (NUT-RAAJ) was the host of the first mission in Coimbatore in July 2017; and it was there that the foundation of the relationship between KPR and Ethiopia was laid.
In April 2018 Mr KPR and two members of the company’s board visited East Africa and the rest, as I can say, is history, which we are celebrating today!
However, does one investment transform? I think you would all agree with me when I say that while it is an important step, the government and all trade and investment institutions in Ethiopia ought to re-double their efforts to use signature investments such as KPR to not only further market the country’s attractiveness but also work towards addressing very important business environment issues.
And we all know what some of these issues are:
1. Addressing the Costs of doing business – be it banking, insurance, communications connectivity, logistics, and investment-friendly laws. I think more can be done here and ITC is ready to assist;
2. Ensuring a Level playing field – restricting foreign investors to a bubble-like environment is not sustainable. They need to have as much a level playing field as local businesses. There is evidence from around the world that differential rules and treatment almost always result in impeding the competitiveness of domestic industry resulting in skewed development- this is also one issue which may have to be addressed in Ethiopia’s ongoing accession discussions at the World Trade Organisation;
3. Ensuring retention of investors – attracting investment while important is only one link in a continuum. Ethiopia should ensure that investors stay, grow, and become part of the national landscape.; and finally
4. Upskill, upskill, upskill – ensure that skills levels, Productivity and professionalism in Ethiopia’s work force is constantly improved. This means investing in youth, and investing in women’s economic empowerment. It also means continuing to pay closer attention to the digital resolution and how this can be used to increase efficiencies in the country and help the private sector- the MSMEs- to grow in competitiveness and in reach.
I say all this for two reasons. First, Ethiopia is currently riding on a wave of being a very attractive destination for foreign investment especially in export-oriented sectors, and should do everything to sustain and grow this trend. Ethiopia can be an example not only for the African continent but the rest of the developing world. Second, for us at ITC and the larger development community, Ethiopia is a priority country and therefore must succeed at all costs. To use ITC’s engagement to illustrate my point, this year alone SITA and its sister project Promoting Investment led Growth in Africa (PIGA) which focuses on promoting investment from China have had a clear Ethiopia focus. A little over two weeks ago I witnessed the signing of Memoranda of Understanding between Chinese investor’s and the Ethiopian government for a quantum of over 3 billion US dollars. One of these projects is the first pulp-based paper plant for Ethiopia with capital outlay of USD 1 billion which will provide 3000 jobs.
Furthermore, in the week of 18 November this year Addis Ababa will see two ITC flagship events gathering global thought-and-business leaders SheTrades Global; and the World Export Development Forum (WEDF). ITC during this week is also hosting a large Chinese textile investment delegation as well as a multisector delegation from India focusing on trade and investment. ITC will also participate at the Africa Fashion and Sourcing Week as well as the All Africa Leather Fair in Addis Ababa this year. Finally, in February 2020 Addis Ababa will play host to the largest textile-machinery focused event in Africa with international and continent-wide participation. ITC is the Trade and Investment partner for this event.
It is clear that ITC is very invested in Ethiopia. And ITC is invested in following the excellent partnership that will continue to grow between Ethiopia and KPR.
Excellencies, Ladies and Gentlemen, I thank you for inviting me here; and allowing me to share my thoughts with all of you.