The following is a cross-post from Tradeology, the official blog of the International Trade Administration (ITA).
This is the first in a series of posts highlighting a four-nation President’s Advisory Council on Doing Business in Africa (PAC-DBIA) fact-finding mission led by U.S. Under Secretary of Commerce for International Trade Gilbert Kaplan. For more information on the PAC-DBIA visit https://www.trade.gov/dbia/ or follow the trip at #PACDBIA.
The initial stop of the PAC-DBIA fact-finding trip to Africa yielded wins for U.S. companies currently doing business in Ethiopia and greatly enhanced the potential for future trade opportunities for other firms in this critical market. Under Secretary of Commerce for International Trade Gil Kaplan and the delegation met with senior government officials and industry leaders to identify challenges and develop strategies to improve U.S.-Ethiopia commercial relations.
The visit was capped off with a new agreement between the U.S. and Ethiopian governments to support private investment and U.S. participation in key industry sectors. Under Secretary Kaplan met with Minister Abraham Tekeste, Ethiopian Minister of Finance and Economic Cooperation and signed a Memorandum of Understanding aimed at promoting trade and reducing trade barriers. The MOU commits the U.S. Government to work with U.S. businesses and the government of Ethiopia to encourage economic reforms to diversify Ethiopia’s economy and enhance its competitiveness.
There are promising signs of economic change in Ethiopia. On June 5, Ethiopia announced plans to partially privatize leading state-owned enterprises, including Ethiopian Airlines (EAL). EAL is the fastest growing and most profitable airline in Africa, registering an average growth of 25 percent in the past seven years. Following a meeting with Under Secretary Kaplan and the delegation, Ethiopian Airlines Group – parent company of EAL – Chief Executive Officer Tewolde Gebre Marian announced a deal with General Electric to procure 12 General Electric engines valued at $444 million, as well as a separate $473.5 million 10-year maintenance contract. Aviation is the top market in Ethiopia for U.S. companies, and as of 2016 the export of aircraft and aircraft parts represents 54 percent of the principal U.S. merchandise exports to Ethiopia.
A pair of procurement manuals announced during the visit will assist U.S. companies to better understand and successfully compete in Ethiopia’s formal procurement process. The Commercial Law Development Program created its new procurement handbook that highlights Ethiopia’s new Public Private Partnership law, which recognizes the essential role of the private sector to support economic growth and improve the quality of public services in the market. In addition, the U.S. Trade Development Agency capped its collaboration with the Ethiopian Electric Power (EEP) with the introduction of an EEP procurement manual for competitive tendering.
Several U.S companies have already taken advantage of the opportunities in the Ethiopian market, announcing new deals and agreements during the visit. In addition to General Electric:
- Honeywell International, Inc., of Morris Plains, New Jersey, announced a $10.2 million deal for the security system of the Bole Airport expansion, and a $7.2 million Auxiliary Power Unit service contract.
- TROY Group, Inc., from Wheeling, West Virginia, announced a preliminary agreement to provide the Vital Events Registration Agency of Ethiopia with 130 Secure UV printers, TROY’s SecureDocs Software and related licenses. The deal is valued at $750,000.
- BAK USA, from Buffalo, New York, recently won a tender, funded by the African Development Bank, for 4,000 tablet computers for Ethiopia’s Ministry of Water, Irrigation and Energy. The deal is valued at $2.1 million.
Ethiopia has the fifth-largest and fastest-growing economy in the Sub-Saharan Africa region, and has averaged more than 10 percent annual growth during the last decade. Both the government of Ethiopia and the United States have a desire for foreign direct investment and a more diversified economic relationship between the two nations. This fact-finding visit is a solid step forward to ensuring a bright future.