| Abstract: | Ethiopian Government has adapting different strategies and incentive packages to enhance its
foreign direct investment performance. The main aim of this paper is to identify challenges and
opportunities for foreign investors of Agro processing sector and Textile & Garment sector.
Political, economic, socio cultural, technological and legal variables are given much emphasis
in the study. To this end primary data are collected from 119 and 35 foreign investors Agro
processing sector and Textile &Garment sector respectively and employees of Ethiopian
Investment commission. Questionnaire and interview were the main data collection tools used in
collection of primary data. The study has found insufficient supply of foreign exchange, getting
financial loan, getting investment land, political instability, raw material supply and electricity
as the main challenges of foreign investors. On the other hand, law cost of labor, huge market
potentials, and encouraging investment proclamation are among the prospects foreign investors
can reap because of investing in Ethiopia. Finally, the study recommended formulating
harmonized national investment land giving procedure with some flexibility and increasing
EIC’s medium of communication that may enable to solve the observed problems and enhance
the efficiency of foreign investors. |
