The Ethiopian Investment Commission (EIC) and the Volkswagen Group on Tuesday, 29 January 2019, signed a memorandum of understanding (MoU) that enables Volkswagen to set up an automotive industry plant in Ethiopia.
A commissioner of Ethiopian Investment Commission, Abebe Abebayehu, and Thomas Schaefer, head of the Volkswagen Sub-Saharan Africa Region, signed the MoU in the presence of the visiting German President Frank-Walter Steinmeier and Ethiopia’s Minister of Finance, Ahmed Shide.
The signing ceremony sets a significant milestone for setting up a possible automotive plant in Ethiopia and attracting more investors from Germany. Ethiopia is a priority and focus country for Germany under the G20 Compact with Africa initiative, Schaefer said.
Volkswagen will focus on four key pillars: the establishment of a vehicle assembly facility; localization of automotive components; introduction of mobility concepts such as app-based car sharing and ride hailing; as well as the opening of a training centre.
As such, Volkswagen will work closely with Ethiopian higher education and training institutions for skills development and capacity building of local talent.
“As one of the fastest growing economies and with the second highest population in the continent, Ethiopia is an ideal country to advance our Sub-Saharan Africa development strategy. Additionally, Volkswagen intends on tapping into existing expertise and strategic resources in Ethiopian to help to establish a thriving automotive components industry,” Schaefer added.
Ethiopia becomes the third country in Sub-Saharan Africa to sign an MoU with Volkswagen. It follows Ghana and Nigeria, who both signed MoUs with Volkswagen in August 2018.
Volkswagen has been manufacturing vehicles in South Africa since 1951. In Africa, Volkswagen also has vehicle assembly operations in Algeria, Kenya and Rwanda.
During their meeting with Prime Minister Dr Abiy Ahmed last October in Addis Ababa, senior executives of Volkswagen (VW) expressed their keen interest to invest in Ethiopia.
Ahmed, at the time, assured VW that the government will do everything to help VW invest in the country.
The Volkswagen Group, with its headquarters in Wolfsburg, Germany, is one of the world’s leading manufacturers of automobiles and commercial vehicles.