THE IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON THE FUTURE SUSTAINABLE DEVELOPMENT OF ETHIOPIA
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In the light of recent strong global increases of Foreign Direct Investments (FDI), Ethiopia is
one of the developing countries having received high FDI inflows in its agribusiness sector
especially since 2006. As the agribusiness sector is the base of the Ethiopian economy these
increases may considerably influence the total economy. This study aims at giving a first
insight of possible midterm impacts of the FDI inflows on the sustainable development of
Ethiopia. By analysing former empirical studies, likely future trends of development are
derived. It is estimated that the high FDI inflows currently have and in the future continue to
have a positive impact on the economic growth and poverty reduction. However, scarcity of
agricultural land and water and corresponding environmental problems are bound to increase
if no new production technologies and sufficiently strong regulatory frameworks are
implemented.