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Diaspora Engagement in The State of Oromia by Lalem Berhanu

This is a brief study conducted between February and April of 2010, with the support of the Ethiopian Ministry of Foreign Affairs and the International Organization for Migration. The main objective was to study the nature of Diaspora economic involvement in the State of Oromia, which is the most populous region in Ethiopia and covers the largest part of the country. The Ethiopian Diaspora has the following characteristics: Its gross income is roughly estimated to be around 10-20 billion USD per annum, and in the last decade, investments of the Diaspora have been around 10% of total ‘domestic’ investment in Ethiopia. Between 2007 – 2008, remittances have been around 1.8 billion USD to the home country, and 50% of investments have originated from Ethiopians residing in North America. In the years 1992 to mid-2009, the Ethiopian Investment Authority issued 1,805 investment licenses to members of the Diaspora, most of whom came from North America. The Oromia Investment Board is the highest authorized body, which decides on key policy and administrative issues regarding investment within the region The state of Oromia does not have an investment policy as such of its own for the Diaspora, but provides various types of tax incentives for members of the Diaspora possessing a license from the Ethiopian Investment Authority. The study has shown that local investors heavily favor engagement in agriculture and the hotel & tourism industries. This is important in that members of the Diaspora are also likely to favor these sectors, because they also enjoy the privileges of local investors.  The study also highlights some of the problems identified by the study, such as; the need to keep accurate data, problems in land allocation, and the urgent need to formulate specific policies to attract the significant economic and skilled manpower resources of the Ethiopian Diaspora.

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