Ethiopia Prime Minister Abiy Ahmed has held a meeting with senior executives of Volkswagen ahead of a business investment move for the German automaker in the country.
According to Chief of Staff at the Prime Minister’s Office Fitsum Arega, the PM has assured the Germans that the government of Ethiopia will fully support their operations in the nation.
Meanwhile, the necessary steps undertaken to develop the manufacturing sector in the country are bearing fruits as more investors continue to swarm in the industry. The construction of industrial parks to accommodate manufacturing firms has drawn a significant amount of foreign investments necessary for economic development and improved performance.
German car manufacturer Volkswagen had hinted expansion plans in the East African region in September with a business prospect in Ethiopia, Africa’s fastest growing economy. Its presence in the region stiffens competition with other car dealers on the continent, which betters the business environment in Africa. Volkswagen seeks to open a manufacturing plant in the Horn of Africa.
The investment will not only increase the market for German goods but will also create employment opportunities for Ethiopians. With over a 100 million population, which is equivalent to 1.41% of the total world population yet remains one of the most under-developed nations in the world due to high poverty levels, there is an abundance of a labor force to be tapped.
Ethiopia imports cars from Japan to fulfill the market needs. Japan is a world-renowned exporter of vehicles due to the affordability of their merchandise. However, the introduction of VW in Ethiopia will edge the dominance of Japanese cars in the Ethiopian market. The moves could work in Germans favor as the government of Ethiopia has imposed heavy taxes on imported cars which gives the citizens small room for the purchase.
Following its launch in Rwanda and Kenya, VW is looking to serve the growing market in Ethiopia with the best well-oiled engines and affordable machines the buyers can enjoy.