This is what I have learned by talking to businesspeople in Ethiopia, both locals and foreigners.
Ethiopia has huge potential for growth, mainly thanks to a labour force that is trustworthy, smart and committed, and yes, for now at least, also very cheap, though the latter is the kind of advantage that will hopefully not last. Ethiopian Airlines provides a competitive edge for exports by air to the big markets of Europe and the Gulf.
To stimulate investment, the various mega projects are great and necessary, but that should only be the beginning. There must also be a friendlier climate towards small-scale entrepreneurs. The authorities need to listen more to producers’ concerns. This means stepping up the fight against corruption, cutting bureaucracy and ending the practice of a taxation regime that changes with the seasons. Many complain that the current system arbitrarily taxes turnover instead of profit. Fewer blackouts would also help, because diesel generators are a heavy cost. Security is a major issue, of course. And last but not least, the price of port access needs to come down. It costs more to get a container from the Red Sea to Addis Ababa than from China to the Red Sea.
Despite these problems, it is basically a rather attractive high-risks high-returns situation today.
Okay, so I listen to businesspeople, but I do not buy everything they tell me. They love competition among their suppliers, but not within their own field of production, because it is what cuts the most into their margins. But competition is the best mechanism to spread the benefits of progress. Politicians often prefer to let businesspeople reap monopoly earnings that can then be taxed and turned into handouts, because this is what buys popularity, dependence and hence political power, but the people are better off when there is competition for sales, competition for hiring, competition for everything.