Ethiopia and United Kingdom are soon to sign a Double Taxation Agreement (DTA) that aims to give further impetus to growing trade and investment relations between the two countries.
The signing of the DTA is expected to eliminate double taxation, until now a challenge for businesses operating between Ethiopia and the United Kingdom. According to Ethiopia’s Trade Ministry, the move is also meant to strengthen and boost trade and investments between the two countries.
The announcement follows a visit at the weekend by a delegation of more than ten British business missions, headed by London Chamber of Commerce and Industry (LCCI), to Ethiopia.
Chairman of LCCI, Subhash Tuakror, who led the business mission comprising of a wide range of sectors, including agriculture, laboratory equipment, power distribution, among others, signed a cooperation agreement with the Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA).
The agreement should help promote and strengthen the development of economic and trade relations and co-operation between member companies of both parties on the basis of equality and mutual benefit.
During the signing ceremony on Monday, March 28, Ayalew Zegeye, chairman of AACCSA, pointed out to his UK counterparts that there is immense investment opportunity in the areas of agriculture, manufacturing, construction, real estate, tourism and mining, among others, and invited them to invest freely in Ethiopia.
Tuakror on his part said he hoped the agreement would strengthen the existing trade relationships between the two countries and also bolster the enthusiasm of UK investors to invest in Ethiopia.
Bilateral trade between the two countries in the year 2005 fetched about 98 million pounds which more than doubled after four years, reaching 205 million pounds in 2009.
Power generating machinery and transport equipment are among the major exports of UK to Ethiopia which is currently undertaking massive works on large hydropower generation projects in order to satisfy a growing electric power demand not only in the country but the sub-region as well.
Ethiopia intends to generate foreign currency by exporting electricity to its neighbors, including Kenya, Sudan and Djibouti. So far, three countries have agreed to import power from Ethiopia upon completion of a number of hydro electric dams.
The Horn of Africa country’s economic progress and gradual development of massive power generation infrastructure have seen an annual average growth of exports, by UK companies, hit 22 per cent, reaching 120 million pounds in 2009 from 53 million pounds in 2005, according to statistics obtained from the British Embassy in Addis Ababa.
Apart from its main traditional export product, coffee, Ethiopia’s major agricultural exports include leather, oilseeds, sugar and gold production, which has grown in importance in recent years.