The ratification by Ethiopia’s parliament in mid-December of a trade agreement with Pakistan is set to speed up the establishment of Pakistani companies in the African country. Pharmaceutical firms Sitara Chemicals Industries, D.Watson Pharmacy and Atco Laboratories have already begun registering with the Ethiopian Food and Drug Authority for permission to market their products. 

For the past year, the Ethiopian government has been wooing these companies, whose representatives were among a 70-strong delegation of Pakistani businesspeople that visited Ethiopia last March as part of a diplomatic rapprochement between the two states (AI, 08/06/23). The following month, Ethiopian Airlines‘ launched the first direct commercial flight from Addis to Karachi. Another Pakistani delegation is due to visit the Ethiopian capital in May.

Several Pakistani companies, particularly those active in agro-industry, have already expressed an interest in taking part in the trip. They see Ethiopia and its 120 million inhabitants as an economic opportunity and a gateway to the wider east African region. They are hoping that the success of the first delegation’s visit will open the door to favourable conditions.

Bulk imports

Almost a year after it was signed, the trade deal Pakistan and Ethiopia struck in February 2023 is beginning to bear fruit. The Ethiopian Investment Commission (EIC) is shortly expected to allocate an industrial park to Pakistani companies to enable them to develop their activities side by side.

This park should benefit the pharmaceutical sector as well as packaging companies such as Agrarian Technologies Private, Roshan Package and MacPac Films, which are also planning to set up shop in Ethiopia. Their aim is to import consumer products such as biscuits, crisps and chewing gum in bulk from Pakistan, sell them on the Ethiopian market and export them to other countries in the region.

In another sector, Power Cement also has its sights set on the Ethiopian market, despite competition from market leaders such as Nigeria’s Dangote Cement, Derba Midroc Cement and National Cement Co. Power Cement is counting on the recently ratified bilateral trade agreement to rapidly increase trade and hopes to set up a direct shipping line from the port of Karachi through the Arabian Sea and the Gulf of Aden to Djibouti.

Technology transfers

In addition to trade, the two countries signed a memorandum of understanding last May to share knowledge in the pharmaceutical, chemical and textile sectors. Ethiopian students will also be offered scholarships to study in Pakistan. A first cohort, which will undergo a selection process in March, is expected in Islamabad in August.

Pakistan’s proactive strategy towards its Ethiopian partner is focused on three areas: investment, exports and technology transfer. It is part of the “Engage Africa” policy launched in 2019, under which Islamabad has opened five new embassies on the continent: in Rwanda, Ivory Coast, Uganda, Djibouti and Ghana.

Pakistan has applied to become part of BRICS, a group of developing nations originally comprising Brazil, Russia, India, China and South Africa, which Ethiopia and Egypt joined on 1 January this year. Islamabad is counting on Russia and its main financial backer China to lobby its neighbour and rival India on its behalf.