Vietnam and Ethiopia Golden Opportunity for Economic Cooperation

VCCI Vice President Nguyen Quang Vinh receives the Ethiopian business delegation

VCCI Vice President Nguyen Quang Vinh warmly welcomed the Ethiopian delegation, led by Ambassador to South Korea (accredited to Vietnam) Negus Labada and Kenenissa Lemi, President of the Ethiopian Chamber of Commerce and Sectoral Associations. Vinh highlighted the event’s importance in opening new paths for cooperation, deepening economic, trade and investment ties, and reinforcing the long-standing friendship between the two nations.

He emphasized that Vietnam and Ethiopia established diplomatic relations on February 23, 1976. Over nearly half a century, the two countries had built a strong, traditional friendship and had consistently supported each other at international forums. He added that Ethiopia’s recognition of Vietnam’s market economy status in 2011 marked a pivotal milestone in their bilateral ties.

He noted that Vietnam is one of the most dynamic economies in the Asia-Pacific region. With a population of over 100 million, better infrastructure and an extensive global trade network, Vietnam has signed 17 free trade agreements (FTAs) with major global partners. In 2024, its total import-export turnover hit US$786.29 billion, up 15.4% from the previous year, with exports reaching US$25.35 billion, a 9.4% increase. The country’s GDP was close to US$500 billion, growing by over 7%, and per capita income reached US$4,700. Vietnam’s investment environment remains attractive for foreign investors.

He also highlighted Ethiopia as a rising economic star in Africa, with growth rates over 9% from 2010 to 2019, above 6% from 2020 to 2024, and a target of 8.1% for 2025. The country is pushing forward economic reforms, focusing on agriculture, manufacturing, ICT, mining, tourism, aviation and telecommunications. With a young population, large market, low electricity costs, open policies and a key position in the African Continental Free Trade Area (AfCFTA), Ethiopia is actively promoting foreign investment.

Ambassador Negus Labada said the event marked a key step forward in bilateral ties, showing strong political will and commitment to economic cooperation. He described Ethiopia as the “gateway to Africa” and Vietnam as a “strategic hub in Southeast Asia,” urging businesses to seize opportunities in sectors such as agro-processing, textiles, renewable energy, ICT, logistics, pharmaceuticals, mining, and industrial manufacturing. Ethiopia aims to boost exports of coffee, flowers, and spices to Asian markets while learning from Vietnam’s experience in agricultural and industrial development.

Despite their strengths, bilateral economic ties remain modest. Two-way trade has hovered between US$10-15 million in recent years, with Vietnam exporting machinery, equipment, and textile fibers, and importing textile raw materials, footwear, coffee, and agricultural products from Ethiopia. Investment is limited, with only one Ethiopian project in Vietnam, valued at US$0.1 million, indicating vast untapped potential.

Kenenissa Lemi outlined his organization’s role in representing over 400,000 businesses nationwide. The chamber focuses on fostering an open business environment, promoting public-private dialogue, facilitating international partnerships, supporting agreement signings, and providing legal advisory services. He extended a warm invitation to Vietnamese businesses to explore investment opportunities in Ethiopia, pledging robust support for all bilateral initiatives.

In an online presentation, Dr. Habtamu Simachew, Senior Advisor to the Ethiopian Investment Commission, outlined Ethiopia’s strong investment potential and appealing incentives. He highlighted priority sectors, including manufacturing, agriculture, ICT, mining, real estate, tourism, and renewable energy. Investors can benefit from income tax exemptions for 1 to 15 years, duty-free imports of machinery, exports of products, and a simplified “one-stop” licensing process through the Investment Commission. Ethiopian embassy and trade officials expressed optimism about collaboration prospects, emphasizing Ethiopia’s strategic location and unique market advantages.

Vietnamese businesses showed keen interest in Ethiopia’s market, focusing on issues such as licensing procedures for mining, opportunities for joint ventures with Ethiopian state-owned enterprises, access to the broader African market, minimum investment requirements, return on investment timelines, pharmaceutical export regulations, and growth potential in the textile sector. They also sought clarity on the long-term stability of 100% foreign ownership policies, land lease regulations, international payment mechanisms, and profit repatriation. Several companies expressed interest in partnering with Ethiopian counterparts to import rice, spices, cereals, and timber, establish representative offices, or supply goods to Ethiopian supermarket chains.

The Ethiopian delegation committed to facilitating business connections and providing detailed information to address inquiries. Vietnamese firms expressed optimism about increasing investments in Ethiopia soon, especially in sectors where both countries can capitalize on their complementary strengths.

VCCI Vice President Nguyen Quang Vinh reaffirmed VCCI’s dedication to fostering investment and trade ties with Ethiopia. He announced plans to sign a cooperation agreement with the Ethiopian Chamber of Commerce and Sectoral Associations, aimed at enhancing trade and investment promotion activities and organizing business networking events to create a conducive environment for sustained partnerships.